Effectiveness of Alternative Dispute Resolution Methods in the Rwandan Construction Industry

Abstract

The construction industry is laden with a lot of project performance issues which usually lead to disputes between the Employer and the Contractor. This study investigates the effectiveness of the alternative dispute resolution methods. The objective is to determine the causes of disputes, the level of application of dispute resolution methods, the effectiveness of the existing dispute resolution methods and the methods of evaluating and managing disputes in case of future projects. Quantitative and qualitative research methods were used in the study. The study population was the professionals in the built environment and the adjudicators/arbitrators. The study findings indicated that the main causes of dispute in construction projects in Rwanda are payment for variations, extension of time, cost escalation, retention money, wrongful termination of contract. loss of profits, delays in site possession, compensation for machinery and equipment confiscated by the employer, interest on delayed payments, return of the guarantee held by the employer, and costs related to the resolution of the dispute. Alternative dispute resolution methods are usually adopted on delay issues, poorly written specifications or lack of specifications, poor plan or drawings generally, poor level of workmanship, unauthorized works that are done by the contractor and defective works. The order of the effectiveness of the alternative dispute resolution methods is negotiation, mediation conciliation, facilitation, adjudication, dispute boards, arbitration, and arbitration-mediation. Based on the findings, the study concluded that the major causes of disputes need to be guarded against and in case disputes eventually occur, negotiation and conciliation methods should be given the first priorities. The study recommended that the government should put in place, strategies that are aimed at mitigating disputes on construction projects. Professional bodies should enlighten professionals to always be ethical in their discharge of duties.