Conflict therapy

Some people might say that avoiding conflict in a risk-prone and complex industry like m&e contracting is about as easy as crossing a motorway blindfolded. It certainly isn’t simple, but in ten years working for a major m&e contractor, then 16 years at Trett Consulting, I have come to realise that problems can be tackled at the front-end of the project.

Actively working to avoid disputes has become an important aspect at each stage of the process. It has become increasingly obvious to me that it is entirely feasible to anticipate and steer clear of many problems before they arise. It is about brainpower rather than slugging it out with litigation.

Confidence trick

Trett Consulting was recently commissioned by an international consortium undertaking a large, multi-million pound building project on a build-operate-transfer contract. The consortium included the civil and m&e contractor, plus a number of specialist firms.

Trett Consulting’s initial brief was to help the consortium’s commercial team with dispute and claims avoidance measures and proactive control. As we gained the confidence of the employer, our role has extended to independent project advisor.

The first task we set was to understand the contract into which the consortium had entered and prepare a commercial manual that set out in plain language what had to happen at the various stages of the project. Despite being detailed and legalistic, contracts do not deal with everything that can happen, so we sought to identify these gaps and propose routines to safeguard the consortium’s interests.

The manual was issued to the employer and frank discussions held. The purpose of this was to show that procedures were for risk-avoidance purposes, to record facts, notify events and deal with things when they arose, and not to store up problems by doing nothing. Often people react defensively to good commercial management, but in this case we were able to show that our aim was to better manage potential dispute situations, for the benefit of both parties.

We also set up the consortium’s master programme to ensure the right mechanisms were in place to monitor anything likely to impact adversely on the project. This covered design procedures, information schedules, interaction and interfaces between parties, procurement plans, key events and milestones and detailed trade programmes for each member of the consortium, including the commissioning and handover period. This early planning input has ensured that progress can be monitored in a sensible and detailed manner.

A common feature on projects is for plans to change quite dramatically. This can cause dispute management difficulties as the project advances, since progress information becomes inconsistent; it may not be possible to relate records at the early stages of the project with those maintained later.

It is feasible to anticipate and steer clear of many problems before they arise

On this scheme, the project was broken down into a series of manageable packages. This structure allowed elements of the programme to be expanded in a consistent way, rather than having to completely restructure it. Consequently, we can explain the history of the developing project in a clear and logical manner. This has reduced arguments over what happened, when and why, which are typical when dealing with delays and disruptions.

We provide monthly assessments of how all aspects of the project are progressing. These records are presented to the employer and consortium and we sit with both parties dealing with debatable issues until all are happy to sign off the monthly records.

Readers with experience of extension of time claims will appreciate that arguments about progress records are one of the major causes of these disputes escalating, preventing settlement at an early stage. Our actions on this project will work to avoid these types of disputes.

Another aspect of Trett Consulting’s role is our distance from the day-to-day running of the project, which means that we can be more objective. It is always difficult to be critical of your team’s performance, yet experience shows that in dispute resolution a critical attitude invariably leads to less conflict and stops disputes escalating.

Many disputes are prolonged because the employer’s or contractor’s site team try to push forward with a bad claim and this is backed up by head office management, who feel the need to support the people out in the field – they allow a poor claim to undermine relationships. In our role, we can give the consortium and employer an objective view of an issue and the likely range of outcomes when arguments arise. In addition, as we are monitoring events on a regular basis we can give advanced warning of any potential future problems. This can give the parties time to manage and minimise their effects.

Achieving the parties’ buy-in to the idea of dispute avoidance means that a lot of trust and confidence is required on their part to invest in something that is still quite unusual. You are acting for organisations that have the vision to avoid extra project cost rather than those who plan to make a claim after the event in order to recover programme/cost overruns.

Initial investment is required to employ firms such as Trett Consulting at the front-end, so it is a continual challenge to meet expectations. It is very much an integrity-based business.

Tony Farrow is executive director of Trett Consulting.