Are Construction Disputes Inevitable?

456 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 Are Construction Disputes Inevitable? Sai On Cheung and Tak Wing Yiu Abstract—Many construction projects are of long-duration and high value and foreseeing and planning for every eventuality may be impossible. Engineers and managers are expected to solve problems surfacing during the execution stage. Moreover, problems blended with conflict are damaging and manifest as disputes. The authors suggested that construction dispute can be conceptualized as having three basic components: contract provisions, triggering events and conflict. This conceptualization fits nicely with fault tree (FT) framework that is used to evaluate system failures. Furthermore, through the use of a hypothetical case, a fuzzy FT model was employed to analyze the likelihood of construction dispute. This research suggested that complex project delivered in the traditional design then build approach, construction dispute are bound to appear. Index Terms—Construction disputes, fault tree model. I. INTRODUCTION EALING with dispute is part of portfolio of engineering managers. In construction, due to the quantum involved and disruption so caused, several industry reviews have raised concern over the dispute “epidemic.” The voluminous publication on construction dispute is a good evidence of its significance. Newey [1] provided the invaluable data illustrating the rising number of construction dispute reaching the court in the United Kingdom. He advocated that prevention is better than cure. Prevention of dispute can be achieved through cogent management such as prudent staffing policy, vigorous quality assurance plan, and realistic tender preparation and separating duties of design from contract administration. Engineers and managers can expect problems regularly in construction operations. In fact, problem solving skill is one of the core skills required of engineers and managers. Technical problems may be complex but usually manageable. Disputes are different because of the legal ramifications and personalities involved. As such, managing construction dispute is akin to conflict resolution. Despite its wide publicity, construction disputes are seldom defined, possibly because of its complex nature and intertwinted underlying causes. This paper describes a conceptual model to identify construction dispute. This conceptualization nicely fits in a fault tree (FT) framework, an instrumental tool to analyze system failure. Through the use of a hypothetical case, the likelihood of dispute occurrence is assessed. D II. IDENTIFICATION OF CONSTRUCTION DISPUTES Dispute in construction can be attributed to the conflicting interest of the large number of participants. A more generalized Manuscript received May 1, 2005; revised August 1, 2005. Review of this manuscript was arranged by Department Editor J. K. Pinto. This work was supported by the City University of Hong Kong Research Grant (Project No. 7001686). The authors are with the Construction Dispute Resolution Research Unit, Department of Building and Construction, City University of Hong Kong, Kowloon, Hong Kong (e-mail: [email protected]). Digital Object Identifier 10.1109/TEM.2006.877445 treatment was forwarded by Diekmann [2] who suggested that people, process and product are the main sources of construction disputes. Rhys Jones [3] further identified ten main sources: 1) management; 2) culture; 3) communications; 4) design; 5) economics; 6) tendering pressure; 7) law; 8) unrealistic expectations; 9) contracts; 10) workmanship. Mururu [4] described that dispute is the formation of a position to maintain in conflict. Brown [5] suggested that dispute can be viewed as a class or kind of conflict that require resolution. Furthermore, according to Hellard [6], construction dispute is the opposition of interests, values or objectives. While Spittler [7] added that construction dispute is linked with difference in perspectives, interests, and agenda of human beings. Yate [8] examined construction process in the light of transaction cost economics with the aim to explain the high incidences of claims and dispute. He argued that complex contracts are invariably incomplete due to bounded rationality and uncertainty [9]. As a consequence of contractual incompleteness, whenever events/contingencies occur ex post which are not fully specified ex ante, one or both of the parties may behave opportunistically. Such behavior predictably results in conflict and disputes. Tillet [10] defined construction dispute as the incompatibility of two (or more) people’s (or groups’) interests, needs, or goals. As they seek to maximize fulfillment of their own interests, or needs, or achievement of their own bargaining or negotiating through compromise, one party may yield to the other on that which is less important. When this happens, the dispute is usually settled. This was consistent with the view of Fenn [11] who described that dispute requires resolution and is associated with distinct justifiable issues. Similar proposition is also suggested by Burton [12] who maintained that dispute is always negotiable. Bristow [13] and Sykes [14] are also concerned with personality and suggested that disputes are due to unrealistic expectation, lack of team spirit and misunderstandings. Apparently, these studies suggested that conflict is a prime driver of dispute. Another line of analysis points to the subject matters that are in dispute. Hewit [15] identified six types of construction dispute; change of scope, change conditions, delay, disruption, acceleration, and termination. Based on a review on the construction disputes that reached the Supreme Courts of New South Wales and Victoria, Australia, in 1989 and 1990, Watts and Scrivener [16] identified 59 categories of dispute with 117 sources. The 59 categories of dispute fall into the following generic types; 1) Determination of the agreement; 2) Payment related; 3) The site and execution of work; 4) Time related; 5) Final certificate and final payment; 6) Tort related. Through survey and case studies, Heath [17] identified seven main types of construction dispute: 1) contract terms; 2) payments; 3) variations; 4) extensions of time; 5) nomination; 6) re-nomination; 7) availability of information. Similarly, Conlin [18] identified payment, performance, delay, negligence, quality, and admin- 0018-9391/$20.00 © 2006 IEEE CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? istration as headings of construction disputes. Kumaraswamy [19] classified construction claims basing on their relative significance in terms of magnitude and frequency. As such he advocated that dispute causes were interwoven and could not be isolated and controlled. Based on a literature review, interviews and a questionnaire survey, the general types of construction dispute were categorized in the order of perceived significance as follows: 1) variation due to site conditions; 2) variations due to client changes; 3) variations due to design errors; 4) unforeseen ground conditions; 5) ambiguities in contract documents; 6) variations due to external events; 7) interferences with utility lines; 8) exceptional inclement weather; (9) delayed design information; 10) delayed site possession. On the other hand, Totterdill [20] focused specifically on the contractual basis under which claims are submitted. The types of technical, legal, and managerial dispute issues must have a contractual reference. Similarly, Semple [21] examined the types of construction disputes with specific reference to the construction contract. The findings of that study suggested that site overhead, loss of productivity, loss of revenue, and financing costs are the main types of construction dispute. Yate [8] pinpointed that the main types of construction dispute arising from the contract document include: 1) variations; 2) ambiguities in contract documents; 3) inclement weather; 4) late issue of design information/drawings; 5) delayed possession of site; 6) delay by other contractors employed by the client (e.g. utility companies); 7) postponement of part of the project. Moreover, the types of construction dispute source are also examined in specific areas such as adjudication and mediation. Sheridan [22] conducted a survey for the Adjudication Reporting Centre and categorizing dispute types settled by adjudication. The statistics showed that “valuation of variations,” “valuation of final account,” and “failure to comply with payment provisions” are the major subject matters of dispute in adjudication. Brooker [23] examined the types of disputes where mediation had been used. A total of 233 construction mediations in U.K. were reported. Disputes involving payment, delay, defect/quality and professional negligence occurred most often, which contributed 72% of the reported cases. A similar study on construction mediation conducted in Hong Kong also found that variation, delay in work progress, parties’ expectations and intraparties’ problem were the significant types of dispute source [24]. While Spittler [7] showed that ambiguous contract documents, competitive/adversarial attitude and dissimilar perceptions of fairness by the participants are the main sources of construction dispute, it is further suggested that if the interests of the participants can be satisfied, disputes can be resolved by managing the time, cost, and quality factors. Semple [21] suggested that contract provision is an ingredient of dispute. This study found that the most commonly encountered sources of construction contract dispute are increase in work scope, weather, restricted access, and acceleration. Furthermore, Sykes [14] identified that construction disputes originate from two main interrelated sources; construction contracts and unpredictable events. It is a fact that construction works are subject to many uncertainties. The daunting task in planning for these uncertainties within the contract laid the seeds for dispute. This may be the result of failing to address sources 457 of the uncertainties. More commonly though is the inclusion of contradicting provisions in an attempt to deal with them. Mitropoulos [25] developed a model to illustrate the development of disputes in construction industry. This model applied the framework of Williamson [26] which combined the effect of project uncertainty, contract, working relations and problem solving effectiveness on the development of disputes and explained how the combination of “environmental” and “behavioral” factors had led to contractual problem. Finally, the basic factors that drive the development of disputes are identified; these include: 1) project uncertainty; 2) contractual problems; 3) opportunistic behavior. Moreover, factors such as contractors’ financial position, cost of conflict, and culture are also identified as determining factors for dispute development. Table I summarizes the identification of construction dispute from literature as described. III. CONSTRUCTION DISPUTE: TOWARD A CONCEPTUALIZATION The above summarizes previous efforts in identifying construction disputes, moreover it is also noted that this is a lack of a conceptual framework to describe construction dispute. It is, therefore, proposed that construction dispute include three basic ingredients: 1) Contract Provisions, 2) Triggering Events, and 3) Conflict [57]. This is presented as a conceptual model called “dispute triangle” as shown in Fig. 1. The details of these three ingredients of construction disputes are described in the following sections. A. Relevant Contract Provision Defining dispute typically emphasizes the existence of incompatibilities of need and value. This formulation of position has to be somehow explicit and typically achieved by referencing to a provision in the contract (at least one). The existence of a dispute is often crystallized through invoking the contract machinery. Based on these theoretical definitions of construction dispute, its main source can broadly be regarded as the formation of clashes among the contractual parties. However, the issue of “when a dispute is crystallized” seems not to be being addressed. This can be recognized by referencing to the contract machinery. In most forms of contract commonly used in Hong Kong [27], [28], if the contractor is dissatisfied with the decision of the contract administrator, the contractor must convey his dissatisfaction and assert his case. The assertion serves as a declaration of a dispute in existence. Similarly in the U.K., under Clause 41 of the JCT 98 Conditions of Contract, a “dispute or difference” is triggered by serving a request for resolution by either one of the contractual parties. In Australia, the Australian Standard form AS4000 [29] requires similar notice of dispute under Clause 42.1: “If a difference or dispute (together called a “dispute”) between the parties arises in connection with the subject matter of the Contract, including a dispute concerning a Superintendent’s direction or a claim (in tort, under statue, for restitution based on unjust enrichment or other quantum meruit or for rectification or frustration) or like claim available under the law governing the Contract, then either party shall by hand or by certified mail, give the other and the Superintendent a written 458 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 TABLE I IDENTIFICATION OF CONSTRUCTION DISPUTES notice of dispute adequately identifying and provided details of the dispute.” Hence, a dispute is evidenced by such a request. B. Triggering Event A construction problem manifests itself when errors are revealed. Changes and ineffective communication create bottlenecks and thereby inefficiency. Claims are the inevitable and eventual outlet. The instigation of claims is typically upon certain happenings, called triggering events. The fundamental purpose of construction contract is to record a commercial agreement. This includes the delineation of the parties’ responsibility, risk ownership, the performance required, and the approval procedures. Provisions for making adjustments are now a standard feature in every construction contract, likewise, provisions for adjudication. CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? 459 Fig. 1. The conceptual model of construction disputes: the dispute triangle [57]. C. Sufficient Level of Conflict In construction, the words dispute and conflict have been used fairly loosely and almost as synonymous. However, as discussed in the previous section, conflict is in fact an underlying cause of dispute. In other words, dispute is the manifestation of the underlying conflict(s). People are the principal resource of all construction projects [30]. Construction professionals such as project managers, architects, engineers, and quantity surveyors and the like are the key participants of every construction project. They are typically drawn from different organizations to form a project team. Each project team is, thus, a mini-society with a complex set of interrelated relationships requiring cooperation and collaboration from conception to completion of the construction project. They have different goals and needs, and each expect to maximize their own benefits [31]–[33]. Because of these differences, an environment flooded with conflict becomes inevitable [34], [35]. Indeed, Conflict is a ubiquitous phenomenon, arising in all aspects of social life [3]. It refers to the existence of a clash of interests, values, actions, or direction [36], which arises when two people or groups perceive their values are incompatible. Tillet [10], in supporting this general depiction, relates conflicts to deep human needs and values. Sometimes they are expressed in problems or disputes, which may only be the superficial manifestation of a conflict. In addition, the potential for conflict is inherent in any contractual situation [37]. The use of standard forms of contract is often criticized. Since many construction projects are complex in nature, it is inevitable that contracts governing each project are also complicated. The distinction between conflict and dispute can also be discussed in the light of their resolution. Burton [12] describes dispute as situation where issues involved are negotiable, in which there can be compromise, and which, therefore, do not involve consideration of altered institutions and structures as in the case of conflict resolution. IV. OCCURRENCE OF DISPUTE AS A SYSTEM FAILURE Construction projects are highly complex, involving interrelated activities like planning site operations, control, safety, and management. Any major events or a series of minor events in the project operation may create problems that could become construction disputes. A construction project can be described as “in dispute” if a claim or assertion made by one party is rejected by the other and that rejection is not accepted [5], [38]. Occurrence of construction dispute can be identified as a fault in the construction process because it affects project performance. The adversarial atmosphere between the owner and the contractor Fig. 2. Illustration of an FT. [3], [18], [39]–[43], undermines the cooperative environment necessary for accomplishing project objectives [44]. It is a well accepted view that dispute is detrimental as it often leads to program delay, increased tension, and damaging long-term business relationships [45]. Resolving dispute through litigation is costly in terms of the consumption of valuable human and financial resources [46]. For example, professionally qualified staff will need to contribute their time for the preparation of supporting documents for the case. Such works may disrupt their normal schedule. Hence, the associated hidden or consequential costs will seriously disrupt the whole development project [47]. Notwithstanding that a number of studies reported [48]–[54] that the use of appropriate contractual method and equitable risk allocation can prevent the occurrence of costly disputes, the general consensus view remains that total elimination of dispute is virtually impossible [6], [30], [35], [45], [55]. In the Section V, the three ingredients of a construction dispute are presented in an FT framework, an evaluation of the fuzzy likelihood of construction dispute is also described. V. AN ASSESSMENT OF LIKELIHOOD: FT ANALYSIS (FTA) FTA is a technique developed in the early 1960s to analyze the safety of electro-mechanical system [56]. It is a “top-down” or “backward” approach of finding the causes of an undesired result. FT models can be graphically presented to show the parallel and sequential causes or events that contribute to a predefined top undesired event. FTA, thus, depicts the logical inter-relationships of basic events that lead to a hazard. In an FT model, a hazard is first specified, and the system is then analyzed in the context of its environment and operation to find credible sequences of events that can lead to this hazard. A simple diagram of an FT is shown in Fig. 2. In an FT, the failure event, the “top event” is decomposed into subevents that can further be decomposed if necessary until “basic events” are reached. “Basic events” are events that require no further development. The top or head event is the loss, 460 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 TABLE II COMMON SYMBOLS USED IN FTA [57] accident, or unwanted event, while the subevents are its contributors. The links in the FT identify the sequences that lead to the top events. The tree permits the thinking through of the possible causes of a loss and quantifies its probability of occurrence. The relationships between the events are represented by logic gates—OR gates for union and AND gates of intersecor can contribute tion. For example in Fig. 2, either event and must be present if to event , while both events is to occur. Basic events can further be subgrouped event into events that requires no further development; events that are evaluated separately and events that no further development is possible because of the necessary information is unavailable. Table II explains the common symbols used in an FTA. VI. AN FT MODEL FOR CONSTRUCTION DISPUTES Fig. 3. FT for occurrence of construction disputes [57]. In this paper, the top event is defined as construction dispute and three subtrees are Contract Provisions, Triggering Events, and Conflict, respectively. Fig. 3 shows the basic form of an FT model of construction disputes [57]. A. Contract Provisions Contract Provision is indicated as a basic event not to be developed further as almost all disputes have a contractual reference. Otherwise, the dispute resolution clause cannot be triggered. Triggering Events and Conflict are more complicated and warrant further analyses with each considered in a subtree. The event relationships of this FT model can be reduced to a logically equivalent form as follows: (1) where Construction Dispute is the intersection of Conflict, Contract Provisions, and Triggering Events. B. Triggering Events In the search for a list of Triggering Events that could be used in the FT model, review of the causes of disputes is a logical start. The studies by Heath [17], Conlin [18], and Rhys Jones [3] in United Kingdom, Diekmann [2] in the USA, Watts and Scrivener [16] in Australia, and Semple [21] in Canada had been instrumental. These studies provided excellent groundwork for the identification of Triggering Events for the present study. Through summarizing these inputs in a Hong Kong context, Kumaraswamy [19], [58] investigated the root causes of construction disputes based on data collected from 61 construction projects and 46 responses to a questionnaire survey administered by him. The relative significance of the dispute sources in Hong Kong was aligned accordingly. In addition, Kumaraswamy [59] extended his study by studying the causes and consequences of construction disputes. The study was based on an opinion survey with 88 responses in Hong Kong. In view of the comprehensiveness of the studies and the fact that CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? 461 TABLE III THE TRIGGERING EVENTS the evaluation of dispute likelihood planned for this study was to be done in Hong Kong, the list of dispute causes provided by Kumaraswamy [19], [58], [59] was used in the FT model. Notwithstanding, to improve the conceptual underpinnings of Kumaraswamy’s work, a structured framework suggested by Watts and Scrivener [16] was adopted. In their study, by reviewing the disputes in 56 cases, 59 different categories of dispute are recognized within a total of 117 sources of dispute. Kumaraswamy [19], [58], [59] further suggested that the most frequent sources of dispute were generally related to the nonperformance of contractual parties, payment and time. The list of dispute causes were grouped in these three main groups summarized in Table III. Its subtree is developed and presented in Fig. 4. Their relationships can also be reduced to the following mathematical format: (2) where Triggering Events are the union of Nonperformance, Payment, and Time. Similarly, the mathematical format of each of the three subtrees is as follows. 1) 2) 3) Fig. 4. Subtree of Triggering Events. where to (Table III). are the basic events of Triggering Events 462 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 TABLE IV THE CONFLICT C. Conflict People are the principal resources of all construction projects [30]. Construction project team members, typically drawn from different organizations, are likely to have different goals and needs respective to their own positions. The presence of conflicts is, therefore, not unusual in a project team. These conflicts may eventually be expressed in the form of problems or disputes. In construction industry, a dedicated study of causes of conflict can be found in the work of Gardiner [60]. In this study, data was collected from construction projects to investigate the causes, occurrence and effect of dysfunctional conflicts within construction projects. It was concluded that the role of people, rather than procedures or systems, is critical to the germination and manifestation of dysfunctional conflicts in construction projects. In sum, Gardiner [60] suggested that task interdependency, differentiations of organizational background and goals, communication obstacles, tensions, and personality traits are the most typical causes of conflict. With these five branches, the “Conflict” subtree was formed. Pretorius [61] also examined interpersonal and intrapersonal conflicts within construction industry. Different psychological coping techniques of professional personnel were available respective to the organization structure. Furthermore, the relationships between owners and contractors were examined by Harmon [44] who suggested that owners and contractors form a social group intertwisted with complex relationships, which require cooperation and collaboration to coordinate time, resources and communication. The existence of conflict will increase the adversarial atmosphere between them. Several intervention processes were proposed for breaking the conflict vicious cycle. The study of Walton and Mckersie [62] also provided valuable insight that helped to explain Personality Traits as a cause of conflict. In this study, a model of organizational conflict and its management that highlights the contextual determinants of organizational conflict is proposed. Similar concepts can also be found in the fields of sociology and social psychology. Walton and Mckersie [62] further suggested that certain personality attributes, such as high authoritarianism, high dogmatism and low self-esteem, can increase conflict behavior. Moreover, constructive handling of these attributes would increase job interest and reduce conflict level. Table IV consolidates these findings within the five subsubtree. Fig. 5 gives the subtree of Conflict. Their relationships can also be reduced to the following (3): (3) where Conflict is the union of Task Interdependency, Differentiations, Communication Obstacles, Tensions, and Personality Traits. Similarly, the mathematical format of each sub-subtree is as follows. 1) 2) 3) 4) 5) – are the basic events of Conflict (Table IV). VII. LIKELIHOOD OF CONSTRUCTION DISPUTES Disputes are inevitable in construction as many would agree [6], [30], [35], [45]. Proving this generally accepted view remains a challenge. The lack of data perhaps is the key stum- CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? 463 Fig. 5. Subtree of conflict. which corresponds to the membership function as follows: (5) (6) Fig. 6. Fuzzy probability—a trapezoidal representation. bling block. The FT model of construction dispute accorded an opportunity for a quantitative treatment on the likelihood of construction dispute. Once the probabilities of the events of the FT become available, the occurrence of the top event, i.e. construction disputes can be computed. Very often, these probabilities assessment can only be provided by project personnel and expressed in imprecise linguistic terms. The use of fuzzy sets evaluation in this study is, therefore, more amenable than discrete probabilities [63]. Fuzzy probability may be viewed as a fuzzy set defined on a probability space which expresses the subjective notion that the probability of occurrence of an event is approximately equal to certain value. The membership function is assumed to be a trapezium as shown in Fig. 6. Trapezoidal fuzzy sets are effective for modeling approximation concepts and facilitating the computation of fuzzy probabilities. Fuzzy probability attempts to capture the notion that the value assigned to a probability is a fuzzy number, expressed as a fuzzy set. A trapezoidal probability can be represented by (4) Tanaka [64] and Misra [65], [66] proposed the use of fuzzy sets to analyze an FT for handling various uncertainties in data. With respect to this concept, a degree of uncertainty can be allocated to each probability of failure. Similarly, the three ingredients of construction dispute, as analyzed in an FT model, can be expressed as a fuzzy likelihood based on the assessment of project participants. Correspondingly, the logic gates allow the computation of the fuzzy probability of dispute occurrence. Fuzzy Sets Theory offers a frame of analysis which could model imprecision in input failure probabilities to be used in an FTA. The estimation of top event probability (TEP) in fuzzy sets would be termed as fuzzy top event probability (FTEP) and such analysis would be termed as fuzzy FT analysis (FFTA) [67]. be the trapeTo assess the FTEP in the present study, let zoidal fuzzy probability. For an event being an output of AND gate, with inputs , the fuzzy probability of an event is given by (7) where is a multiplication operator. 464 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 Hence, the fuzzy probability for OR gate is (8) where VIII. FUZZY LIKELIHOOD OF CONSTRUCTION DISPUTE OCCURRENCE—AN ILLUSTRATION A hypothetical case was developed and based on which the fuzzy probabilities of occurrence of the basic events were solicited from construction professionals. The particulars of the case used are as follows. 1) Procurement method: Lump sum fixed price contract. 2) Conditions of Contract: form of contract for use in private developments in Hong Kong. 3) Project Duration: 28 mo. 4) Thirty-four storey commercial building with two levels of basement. 5) The building is in reinforced concrete structure. 6) External walls are curtain walling. 7) Roofs are covered with waterproofing lining and concrete tiling. 8) Internal wall finishes are generally cement/lime plaster with painting and reconstituted granite; floor finishes are generally of cement paving, granite, and mosaic tiling. 9) Building service installations are to be carried out by nominated subcontractors. 10) The design of the project had been completed sufficient for the preparation of tender documents. 11) The tender had been awarded and the Main Contractor shall be given possession of site in two weeks time. This hypothetical project is chosen to reflect the typical complex projects delivered in Hong Kong. To assess the likelihood of construction dispute, the respondents were asked to assess the fuzzy probabilities of occurrence of the basic events. For trapezoidal fuzzy sets as indicated in (4), four assessments on the probability of occurrence are required for each event. For ease of apprehension by the respondents, the probability assessments required are given as shown in Fig. 7. This figure was included in the questionnaire to improve clarity. Fig. 7 illustrates the four assessments required from each reand refer to the lowest and the highest probaspondent. bility that a particular basic event will occur, respectively. and are the most likely range of probability within which the particular basic event will occur. A total of 24 Triggering Events and 17 Conflict as shown in Tables III and IV were enlisted for the assessment of fuzzy probabilities. A total of 100 questionnaires were sent to construction professionals holding senior positions in Hong Kong. The list was compiled by identifying key personnel from the government and professional directories and web sites of companies. Fifty-six of them responded and returned the questionnaire. The response rate was 56%. Furthermore, 64% of the respondents have more than ten years experience in construction. As for employing organization, 40% of the respondents work for Clients while the other 60% are employees of contracting organizations. The average fuzzy probabilities of occurrence of Triggering Events and Conflict are presented in Tables V and VI. The Fig. 7. The probability assessment. next task is to calculate the FTEP of the construction dispute . Similar to (7), the FTEP for construction dispute is given by (9) where is a multiplication operator, where FTEP of Construction Dispute; FTEP of Triggering Events; FTEP of Conflict. To achieve this, the FTEP of Triggering Events and Conflict are firstly calculated. Following the concept indicated in (8), the equation is given by (10) where is a multiplication operator; and FTEP of Triggering Events; FTEP of “Nonperformance;” FTEP of “Payment;” FTEP of “Time;” – fuzzy probabilities of basic events of Triggering Events as described in Table III. CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? 465 TABLE V FUZZY PROBABILITIES OF OCCURRENCE OF TRIGGERING EVENTS With the fuzzy probabilities of occurrence obtained in Table V, the FTEP of the three basic events of Triggering Events can be calculated as follows: Hence (11) Based on the same concept, the equation for the calculation of FTEP of Conflict is given in similar manner (12) (13) (14) 466 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 TABLE VI FUZZY PROBABILITIES OF OCCURRENCE OF CONFLICT where is a multiplication operator; and FTEP of Conflict; FTEP of “Tensions;” FTEP of “Task Interdependency;” FTEP of “Personality Traits;” FTEP of “Differentiations;” FTEP of “Communication Obstacles;” to Fuzzy probabilities of basic events of Conflict as described in Table IV. CHEUNG AND YIU: ARE CONSTRUCTION DISPUTES INEVITABLE? 467 Fig. 8. Fuzzy probabilities of construction dispute occurrence. Based on Table VI, the FTEP of the five basic events of Conflict can be calculated in the similar manner (18) (15) (19) Hence (16) (17) Finally, the computational procedure for the top event in FFTA can be started. The fuzzy prob- 468 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 53, NO. 3, AUGUST 2006 abilities of the basic events, Triggering Events and Conflict are combined according to (9). The Personality Traits group appears t be an area that would cause more concern from an engineering management perspective. Personality Traits are inherent with the disputants and may not be moulded easily. Furthermore, this attitudinal dimension coupled with the divergence in interest can be damaging. As a matter of fact, research on attitudes in relation to conflict resolution has been topical [71]–[74]. X. CONCLUSION IX. DISCUSSION Based on the above calculations, the probability of occurrence of the top event, i.e., construction dispute, is between 0.997 and 1.000 with the most likely range as [1.000, 1.000]. This likelihood assessment is based on a hypothetical construction project that exemplifies the complex developments delivered in a traditional design then build approach in Hong Kong. Therefore, the finding that construction dispute is inevitable for complex construction project has to be read in the light of these assumptions. The literal interpretation of this finding is that construction dispute will inevitably occur in the project. In the beginning sections of this study, it is highlighted that although most participants in the construction industry share the view that construction disputes will occur in complex project [6], [30], [35], [45]. This study provides an ample empirical support that built on a well-established analytical framework, the FT model, to develop a widely accepted view. The inevitability of construction disputes is in fact gives a positive direction to construction practitioners. This suggests that they should be proactive in dispute management. Having an efficient dispute management approach is essential to prevent dispute from escalating. This study would provide the necessary theoretical basis for construction dispute studies. Practitioners and academics shall highlight the concept of “prevention is better than cure” in terms of two main issues: 1) The development of innovative dispute resolution mechanisms to be used to achieve effective settlement; 2) The use of appropriate contractual method and equitable risk allocation to prevent the occurrence of costly disputes. In addition, Fig. 8 presents the fuzzy probabilities of occurrence of the three groups of Triggering Events are all fairly high. Even the lowest probability of happening for all three groups is above 0.80. Nevertheless, an interesting observation is that Payment related Triggering Events give the highest probability of occurrence with “Argument on the prolongation costs claimed by main contractor” topped the contributor list (Table V). This is very true in Hong Kong and seemingly also common in other part of the world [59], [68]. The Conflict subtree also provided some inspiring research pointers. In this subtree, Differentiations and Personality Traits mark the highest fuzzy probabilities of occurrence. Differentiations highlight the divergence in interests of the project team members. To this ends, the construction industry has initiated the use of cooperative contracting such as partnering and strategic alliancing as means to align the interest of project team members. Some success stories have been reported in Hong Kong [69]–[71]. Researchers in construction dispute have largely focused on the legal dimension of the subject. In the study presented in this paper, an analytical approach was advocated for the conceptualization of construction disputes. Construction disputes are characterized by the co-existent of three ingredients; Contract Provision, Triggering Events, and Conflict. By considering the occurrence of construction dispute analogically as a system failure, the three dispute ingredients are framed in an FT model, with which a fuzzy probabilities evaluation of construction dispute occurrence was completed basing on a hypothetical project with features commonly founded in complex project delivered in a traditional design then build approach in Hong Kong. The results indicated that the occurrence likelihood of construction disputes lies within the range of 0.997 to 1.000. This result supports the general accepted views that in complex construction project, disputes are inevitable. This points to the need for construction professionals to exercise proactive dispute management. 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Ogunlana, “The effect of attitudinal differences on interface conflict on large construction projects the case of the Pak Mun Dam project,” Environ. Impact Assessment, vol. 22, no. 4, pp. 311–335, 2002. [74] T. W. Yiu and S. O. Cheung, “A catastrophe model of construction conflict behavior,” Building Environ., to be published. Sai On Cheung received the Ph.D. degree from the University of Wolverhampton, Wolverhampton, U.K., in 1998 He has extensive practical experience in handling contractual matters and claims. Building on these, he has been actively conducting research studies in construction contracting. These include: 1) investigating ways to avoid disputes; 2) evaluating project dispute status; 3) assessing dispute resolution satisfaction level of disputants; 4) assessing the project dispute resolution satisfaction level of disputants; View publication stats 5) designing dispute resolution processes; 6) developing selection models for dispute resolution process; 7) investigating the relationship between negotiation style and negotiation outcome; and 8) investigating the effectiveness of mediators’ tactics. He has published extensively, in the area of construction dispute resolution. Tak Wing Yiu received the Ph.D. degree from the City University of Hong Kong, Hong Kong, in 2005. He is actively involved in construction dispute resolution researches. His current research interests are construction negotiation and mediation. These includes: investigating the dynamic change in dispute resolution behavior; investigating the most common dispute resolution method—negotiation; developing models for construction mediation.