Reviewing the Possibility of Incorporation of Mediation Method for Settlement of Contractual Disputes in the Construction Industry of Sri Lanka

Abstract

It is crucial to have an effective Alternative Dispute Resolution (ADR) method in the construction sector since disputes adversely affect the performance of construction projects. Studies on ADR practices in Sri Lanka denote that negotiation and adjudication are the preferred and initial ADR methods. Previous studies indicate that arbitration is the most popular construction dispute resolution method despite its disadvantages. Research had a qualitative approach where data collection through 21 semi-structured, expert interviews was analysed via content analysis. The findings indicate that mediation is an effective ADR method because effective outcomes such as cost-effectiveness, time effectiveness, flexibility, and maintenance of relationships could be achieved. Hence mediation could be recommended as the most appropriate initiative as well as throughout ADR method to be attempted rather than adjudication or arbitration. Mediation is recommended here as the most desirable approach to resolve disputes without affecting the relationship between the parties. This study revealed that a limited awareness of mediation within the Sri Lankan construction industry has arisen due to lack of detailed knowledge among industry stakeholders. This was due to a lack of emphasis on construction contracts and the disputant parties' mentality. This had a considerable impact on the limited use of mediation in Sri Lanka. Researchers and practitioners can use the results of this study to understand mediation practices and make suggestions on how to overcome the issues to achieve effective mediation outcomes.