The nature, size, and complexity of construction projects have a significant bearing on the issues that arise under different types of contracts. This is particularly so in relation to large‑scale infrastructure, energy, and mixed‑use developments, including design‑and‑build and EPC projects, where multi‑disciplinary interfaces, compressed programmes, and complex risk allocation significantly increase the potential for conflict.

These Projects bring together numerous stakeholders, intricate technical interfaces, evolving designs, and demanding requirements related to time, cost, and quality. Within this environment, disagreements are almost inevitable. However, while not all disputes can be avoided, many can be prevented or resolved efficiently through well‑structured contracts, disciplined project management, and effective dispute‑avoidance mechanisms.

This article explores practical, industry‑proven approaches to minimise conflict and prevent issues from escalating.

1. Understanding the Key Sources of Construction Disputes

Although disputes manifest in many ways, they typically stem from three interconnected areas: time, cost, and quality.

1.1 Time-related Disputes

Disputes relating to time often result from:

• Delay events (e.g., late approvals, design changes, unforeseen conditions)
• Insufficient float or unrealistic programmes
• Failure to comply with notice provisions
• Lack of contemporaneous records

The Contractor must demonstrate entitlement to an Extension of Time (EOT) through a critical‑path assessment.  At the same time, the Employer must issue prompt instructions and decisions. A breakdown in communication on either side may quickly lead to disputes.  

In practice, many time‑related disputes arise not from unforeseeable events, but from overly optimistic programming assumptions and insufficient allowance for design development, approvals, and interface risks at the outset.

1.2 Cost-related Disputes

Cost disputes generally relate to:

• Variations and scope changes
• Measurement disagreements
• Valuation of prolongation or disruption costs
• Inflation or market driven price changes
• Ambiguities in the contract sum, pricing assumptions, or risk allocation

Recent market volatility, supply‑chain disruption, and inflationary pressures have further amplified cost disputes, particularly where pricing mechanisms and risk allocation were not clearly aligned with prevailing commercial realities.

A well-drafted contract with clearly defined pricing mechanisms and a disciplined change‑control process is recommended to mitigate these issues.

1.3 Quality-related disputes

Quality disputes tend to surface when:

• Specifications are unclear or contradictory
• Workmanship or materials fall below the required standards
• Testing and commissioning regimes are poorly defined
• Responsibilities for design, interfaces, and approvals are not clearly allocated

Quality expectations must be clearly documented within the Employer’s Requirements, drawings, technical specifications, and standards; and then administered consistently.

2. Best Practices for Preventing Disputes Before They Arise

Effective dispute prevention begins well before work starts on site. The pre‑contract and early‑project phases are especially critical.

2.1 Clear and Comprehensive Contract Documentation

A well-prepared contract should:

• Clearly define scope, responsibilities, and deliverables
• Establish realistic time frames
• Detail the payment structure
• Identify applicable quality standards
• Allocate risks intentionally and transparently

Poor drafting and ambiguity remain among the leading causes of disputes across the industry.

2.2 Robust Precontract Engagement

Effective early engagement, through workshops, tender clarification meetings, and technical coordination sessions, ensures both parties share a common understanding of:

• Programme assumptions
• Design maturity
• Key risks and mitigation strategies
• Interface obligations

2.3 Establishing Project Governance

Effective governance is a cornerstone of dispute avoidance. This includes:

• Clear authority and decision-making structures
• Defined escalation pathways
• Transparent approval procedures
• Competent contract administration teams

Timely decisions are essential; delays or unclear instructions from the employer frequently lead to avoidable conflict.

3. Contract Administration and On-Site Controls

3.1 Early Warning and Risk Management

Standard form of contracts increasingly require early identification of risks, for example:

• FIDIC contracts require parties to notify each other of foreseeable problems, e.g., introduction of “early warning” provisions in 2017 editions.
• NEC contracts require the notification of foreseeable problems through the “early warning” process and collaborative risk management. Both Contractor and Project Manager must immediately notify the other of any matter that could increase costs, delay completion or impair performance.

Routine risk‑review sessions and regularly updated risk registers encourage proactive problem‑solving.

3.2 Notices and Records

Strict compliance with notice requirements is vital. Time‑bar provisions can extinguish entitlements entirely if not adhered to.

Accurate, contemporaneous records such as site diaries, correspondence, meeting minutes, inspection reports, and updated programmes form the backbone of dispute prevention and resolution.

Even where substantive entitlement exists, inadequate records or failure to comply with notice provisions frequently undermine otherwise legitimate claims and place parties at a significant evidential disadvantage. If notice provisions are a condition precedent under the contract, failing to follow them generally renders the claims time-barred.

3.3 Change Control

A structured variation process reduces potential conflicts over scope and valuation:

• Clear instructions
• Prompt pricing
• Transparency in cost build‑ups
• Agreement of change impacts contemporaneously

4. Early-Stage Dispute Avoidance and Resolution Mechanisms

Effective contracts include tiered mechanisms designed to resolve issues before they progress to formal proceedings.

4.1 Negotiation Clauses

Senior‑level negotiation is often the quickest and most cost‑effective route to resolution. A clear escalation process ensures issues reach the right stakeholders early.

4.2 Dispute Resolution Ladders

A dispute resolution ladder sets out defined steps for addressing issues. Typical stages include:

1. Project‑level discussion
2. Senior management escalation
3. Executive-level meeting
4. Formal dispute resolution mechanisms clauses within the contract

This staged approach ensures disputes are addressed at the appropriate level before becoming adversarial.

4.3 Dispute Avoidance/Adjudication Boards (DAABs)

Under FIDIC contracts (for example), DAABs can be standing or ad hoc. Standing boards are extremely effective, as they:

• Attend meetings and site visits on a regular basis
• Monitor project performance
• Issue informal opinions
• Provide quick, binding decisions (unless and until overturned)

DAABs are among one of the most successful dispute-avoidance tools globally. Their effectiveness lies not only in the speed of decision‑making, but in the board’s continuous familiarity with the project, the parties, and emerging risks, allowing issues to be addressed before positions become entrenched.

4.4 Mediation

Mediation involves a neutral facilitator assisting the parties in reaching a mutually acceptable agreement. While the process itself is nonbinding, the resulting settlement can become binding once formally agreed in writing and signed.

Mediation helps preserve relationships and ongoing commercial partnerships.

4.5 Adjudication

Adjudication provides a temporarily binding decision, typically within a short timeframe (often 28 days and can be extended up to 42 days, or by further agreement between the parties) to maintain cash flow and project momentum. While decisions can be revisited in arbitration or litigation, they remain enforceable in the interim.

4.6 Arbitration

Arbitration remains the most common final dispute resolution mechanism for international construction projects. Key features include:

• Neutral forum
• Specialised tribunals
• Procedural flexibility
• Final and binding awards

Common institutional rules include ICC, LCIA, DIAC, SCCA, SIAC and HKIAC.

5. Embedding Dispute Resolution Strategies into the Contract

To be effective, dispute avoidance mechanisms must be:

• Clearly drafted
• Integrated into the programme
• Administered consistently
• Supported by well-trained teams on both sides

A contract that merely lists dispute resolution processes without implementing them in practice will not prevent disputes.

6. Conclusion

Construction disputes are time-consuming, disruptive, costly, and can be damaging to ongoing commercial relationships. While disputes cannot always be eliminated, they can be significantly reduced and resolved efficiently, through:

• Clear contracts
• Strong governance
• Effective communication
• Proactive management
• Structured dispute avoidance mechanisms

Effective dispute avoidance is ultimately a commercial imperative, preserving cash flow, maintaining programme momentum, and protecting long‑term relationships on complex projects. By embedding best practice dispute avoidance and resolution strategies into the life cycle of a project, parties can manage risks effectively, maintain progress, and protect their commercial interests. The most successful projects are not those without disagreements, but those where disagreements are managed openly, professionally, and in a timely manner.

About the author

Hilal Itani is a Partner at HKA’s Riyadh office, Saudi Arabia, bringing over 24 years of specialized experience in claims preparation, defence, and alternative dispute resolution. Recognized as one of the few dual experts in the region with deep expertise in both delay and quantum assessments, Hilal is trusted to deliver strategic solutions for some of the most complex and high-stakes projects in the Kingdom. 

In his leadership role, Hilal ensures that the Riyadh office operates in full alignment with HKA’s global strategic objectives, while driving excellence in service delivery for major clients and critical accounts. He has an exceptional track record of managing disputes on multi-billion-dollar projects, where his ability to navigate intricate contractual frameworks and deliver robust delay and quantum analyses has been instrumental in achieving successful outcomes for stakeholders. 

Hilal is a certified Expert Witness by RICS and has provided expert testimony in cases across diverse sectors. His analytical rigor and structured methodologies have consistently resolved disputes involving large-scale projects and complex stakeholder environments, reinforcing his reputation as a trusted advisor for high-stakes matters. 

---

This article presents views, thoughts or opinions that are provided for general information purposes only. It does not represent the views of, or constitute advice of any form (legal, professional or otherwise) from, HKA or any of its affiliates. While HKA takes reasonable care to ensure the accuracy of its contents at the time of publication, the article does not deal with all aspects of the referenced subject matter and may not be relied upon as a substitute for professional judgement or independent analysis. Accordingly, neither HKA nor the author accepts liability for any use of, or reliance on, the information presented in the article. This article is protected by copyright © 2026 HKA Global, LLC/© 2026 HKA Global Ltd. All rights reserved.