All parties to disputes undertake their own assessment of how important their dispute is to them. There will often be significant personal investments on both sides of the project. Disputes can therefore give rise to issues of principle, pride, embarrassment, self-justification, anger and animosity.
Parties should look at their disputes in colder, more detached terms. At the least, it is important to consider how the other parties involved, and third parties such as the Court, may assess the importance of their dispute. This can apply at a number of levels:
The fact that the parties are in a dispute means that the contractor and/or the employer will need to find additional money to complete the project that may not have been budgeted for. This involves considerations of:
- immediate cash flow, as the project needs to continue to be funded in the short term unless and until the dispute can be resolved;
- consequential effects, as the dispute might have knock-on effects for the projects and the parties, particularly in respect of timing; and
- overall outcomes, and whether the employer or contractor thinks they will ultimately be the paying party in the particular dispute.
Disputes require effort to resolve, and this will divert the parties’ attention and resources away from their other responsibilities and activities. This will mean that the parties will need to consider their need for additional:
- individual time, as disputes are very time-consuming for the individuals who need to respond to the dispute;
- expertise, as there may be technical and/or legal issues in the dispute that require third party input; and
- resources, as a financial investment will be required where the dispute is going to be progressed.
Disputes often cause the parties’ attention to narrow to the issues between them. It is however essential for parties to also keep in mind the bigger picture, both for the particular project and wider position. This involves parties considering:
- commercial relationships, as both the dispute and the parties’ response to it will influence their future interactions for the rest of the project and beyond;
- completing the project, and how the prospects of this being achieved with the existing contractor will be affected; and
- securing a replacement, and the ease with which the employer can secure a new contractor and the likely effects of this.