Appropriateness of Commercial Mediation as an Alternative Dispute Resolution Method for Subcontractor Disputes in Sri Lanka

Abstract

Disputes in relation to construction sub-contractors are undeniable and quite diversified in common dispute arena with the legal concerns arising out of Doctrine of Privity of Contracts. Continuation of these disputes can adversely affect the cost, quality, and time metrics in a construction project. The merits of commercial mediation as an alternative dispute resolution method, in this regards Sri Lankan construction industry were less explored. Thus, the aim of this research is to determine the appropriateness of commercial mediation as an alternative dispute resolution method for subcontractor disputes. To achieve this aim, a mixed research approach was adopted. Qualitative data was collected through semi structured expert interviews. Then through a questionnaire survey, quantitative data has been gathered. While qualitative data were analyzed through content analysis, quantitative data were analyzed through relative importance index and descriptive analysis based on central tendency dispersion. Initially, both common attributes of commercial mediation and subcontractor disputes in construction industry were listed out. Then, the inter-relationship between two factors were observed. According to the findings, bespoke and incomplete contracts, subcontractor unawareness and lack of knowledge about contract details, liability and responsibility issues, failure to respond in time, interface issues and lack of coordination were identified as the most significant attributes of subcontractor disputes. Further, it was proven that except the attribute ‘having freedom to accept or reject the solution’, all the other attributes of commercial mediation were applicable in resolving subcontractor disputes. Hence, the commercial mediation was determined as an appropriate alternative dispute resolution method in resolving subcontractor disputes in construction projects. All the limitations and necessary recommendations for further studies are presented at the end of the study.