The Cost of Conflict and Disputes: Towards a Predictive Model for Appropriate Dispute Resolution

Arbrix is an organisation which is independent of the RICSbut exists to provide continuing training to RICS appointeddispute resolvers in any type of property dispute. Arbrixcollaborated with the RICS Education Trust to make anaward in 2010 for research on alternative dispute resolutionin property disputes.The paper presents a proposal for research which ispragmatic, not idealistic, but still theoretical involvingconsiderations of the factors facilitating dispute resolution.The research is concerned with efficiency, economy,practicality and not least legal efficacy and these issues areparamount. What if disputes could be predicted? And ifthey could, is it further possible to predict which disputeresolution process would be most effective and efficientfor dispute resolution?Key Findings• The Dispute Resolution Service (DRS) at The RoyalInstitution of Chartered Surveyors (RICS) is the world’slargest provider of alternative dispute resolutionservices and offers many different techniques forresolving disputes (e.g. Adjudication, Arbitration,Expert Determination and Mediation). It is a smallstep from dispute resolution to dispute predictionand then prediction of effectiveness and efficiencyin dispute resolution.• The cost of conflict and dispute. There is considerableinterest in the cost of conflict from the cost to humanityin general to the cost of commercial disputes. Estimatesdo exist; for construction disputes alone this is putsomewhere around £1.5 billion in the UK alone.• This paper concludes that any money spent on disputesis dysfunctional and should be avoided. A modelwhich predicts disputes would be useful; disputes aredysfunctional conflict and should be avoided. If disputescan be predicted then it should be possible to predictthe optimum technique for dispute resolution.rics.org/research05This paper argues for predicting disputes so they can beavoided and predicting the dispute resolution processwhich would be most effective for dispute resolution ofthose disputes which cannot be avoided.The paper then proposes two predictive models: the first isused by chartered surveyors to predict, and therefore avoiddisputes; the second is used by the facilitator at DRS topredict which dispute resolution technique will provideeffective and efficient resolution for the unavoidable orinevitable which remain.Disputes are time consuming, expensive and unpleasant.They can destroy client/supplier relationships which havebeen painstakingly built up over long periods of time.Disputes can add substantially to the cost of a projecteven making a project unsuccessful, unfeasible or nullifyingany benefits. Disputes need to be avoided; if the disputecannot be avoided then they should be resolved asefficiently as possible.