Alternative Dispute Resolution System †MyAssignmenthelp.com

Question: Discuss about the Alternative Dispute Resolution System. Answer: Introduction: In any organisation, it is important that the management comprehends and foresee the risks that are associated with the business carried out by the organisation. In general, risks imply loss and if an organisation were capable of turning the loss into a chance, it would be able to avert or diminish such risks completely (Glendon, Clarke and McKenna 2016). In order to diminish or avoid the risks that are associated with any business, it is imperative that the organisation adopts a risk management process. Risk management process requires that while carrying out the business, the management must consider and cautiously assess the situations and the scenarios that may and/or is likely to occur in the future. The risk management process of any organisation enables the management to recognise the risks associated with the nature of business operations carried out by the organisation and provides opportunity to reduce or evade the negative impact of such risks upon the organisation. In the given scenario, in order to enable the business to run smoothly during the project, the entire work has been divided into pre-construction stage and construction stage. The scope of the project during the pre-construction stage includes setting up works related to documentation that include grants and endorsements; scheduling and planning number of exercises. The scope further includes protecting any work related to pounding and digging and a guarantee of employing experienced staffs. During the construction stage, the scope of the project includes extension of the existing building for upgrading the same; to develop the building in a sheltered way and build the structure according to the plan. The scope further includes that the development of the building must be completed within stipulated time and the development is executed under safe condition as per the planned contract. As mentioned earlier, risk management is an essential element in any organisation and identification of risk is considered one of the most crucial procedures in risk management. In the event, the management of the organisation is unable to recognise the risks associated with the business, it would not be easy for the organisation to mitigate or evade such risks. The identification or recognition of business risks is fundamental, as unidentified risks cannot be treated in a rational manner (McGregor and Smit 2017). The construction industry includes various sources of risks such as availability, quality and expenses of the labour, subcontractors; construction delay, cash flow condition of the contractors and external influences. The construction industry includes certain inherent risks, which may arise owing to the unforeseeable nature of the industry. In the given case, the inherent risks that are likely to arise from both the pre-construction and the construction phase of the project are relatrred to the enumerated factors: Workers Engineering Statutory legislations Construction or development plan Development schedule Business operations Workers- the contractor is responsible to deal with or avoid any form of risks that may likely arise with respect to the workers engaged in the development project. The contractor is under statutory obligation to employ such workers who have adequate skills and suffuicient experience in the nature of work for which they have been employed in the construction project. The contractor must ensure that there is an effective collective bargaining between the workers and the contractors relating to their wage and the nature of work that is expected of them to do (Grey 2014). An ineffective collective bargaining may give rise to ethical issues as the workers may declare strikes or stoppage of work and cause unnecessary disruption (Sadgrove 2016). The workers may stop working owing to their discontentment regarding the progress of the project. If the workers are contented with the wage rate and the nature of work, they may cause disruption. Hence, the contractors are best able to handle such a situation and so the contractor must deal with such issues wisely and cautiously. Engineering- the engineer and the architect are responsible to prepare an effective development plan based on which the construction project is carried out. The developer of the construction project must exercise reasonable standard of care while working on the project. The must be cautious about any flaw in the construction plan and in the event any such shortcoming is detected, it is expected from the engineers and the architects to analyse the defect and deal with it effectively by exhibiting their skill and diligence (McNeil, Frey and Embrechts 2015). The inherent risk associated with this factor that there is a probability that the engineers and the architects may get involved in some malpractices and cause damage or loss to the construction project on the ground that they are entitled to relatively petite share of a project with an unlimited liability. Therefore, the owner of the project must ensure that the participants of the construction project are financially protected and may prepare some mutual indemnification for the participants. Statutory legislation- the construction project is regulated by the following relevant legislations: Building Act 1993; Competition and Consumer Act 2010; Corporation Act 2000; Planning and Environmental Act 1987; Building and construction Industry Security of Payment Act 2002; Victorian Civil and Administrative Tribunal Act 1998; Information Act 2000 and Goods and Service Tax Act 1999 The risks that are associated with the pre-construction and the construction stage of the project phase may be related to the inconsistency with the statutes that regulates the project. The engineer is responsible to ensure that the development project is being carried out in accordance to the relevant legislations. Construction or development plan- the contractor is accountable for any risks that are connected with the development plan. The contractor is best able to deal with the risks that may likely arise out of the construction plan structured by the engineer and the architect. The decisions with respect to the methods of implementing the construction plan are left to the contractor of the construction plan (Ball 2014). Therefore, before engaging the contractor with tye development plan, the management must ensure to distinguish between the risks that are possible for the contractor to handle and those risks, which are beyond the control of the contractors. Development schedule- the scope of the project at the construction stage includes that the project must be completed within stipulated time. The participants of the construction project are statutorily obligated to complete the project within the stipulated schedule. The contractor must ensure that the work is completed as per the schedule and the project is handled in a cost-effective manner. The inherent risks related to the construction projects shall result in purchasing of poor quality products and the architects and engineers will have to rush into the construction, which might give rise to deficiency in the construction project. Therefore a reasonable and an adequate schedule must be framed in order to complete the project appropriately. Business Operations- the nature of the construction industry is very complex and it easily becomes subject to unnecessary disputes. The inherent risks included in the business operations may take place from the very inception of the construction project. The site of the project may be different from the site that was imagined. It is highly imperative that the management identifies the risk and deal with the same effectively in order to enable the participants to complete the construction in accordance with the construction plan and within stipulated time (Taroun 2014). In addition to the above-mentioned inherent risks, the construction industry is prone to another vital risk that is, issues related to safety and health environment in the workplace. The contractors, being accountable for the workers engaged in the construction work, must ensure that the workers are aware of the safety rules and are acting in compliance of the safety rules applicable in the workplace. Dispute Resolution Since the nature of the construction industry is fragment and complicated, in case of disputes arising from the project, the parties to the dispute may resort to litigation. However, it is a well-known fact that litigation process is not only time consuming but it also involves huge amount of expenses (Fiadjoe 2013). Consequently, a number of dispute resolution processes have been introduced in the construction industry to relive the parties to the dispute from the lengthy and expensive court proceedings. The different forms of alternative dispute resolution processes include mediation, arbitration, expert determination and conciliation. Mediation is the process where a third party shall be appointed who would address the issues between the parties to the dispute and act as a mediator to resolve the dispute. However, either parties to the dispute may or may not agree with the mediators decision. In this case, the expert determination process may be used as a dispute resolution process to address the issues and resolve the same. This process may used to deal with the inherent risks that may arise during the pre construction and the construction stage (Menkel 2015). The expert determination process is usually used to resolve issues that are related to valuation. In th even of any dispute arising out of valuation with respect to the construction, the expert may determine the same and the decision of the expert shall be binding upon the parties to the dispute. However, this dispute process is economic but the decision of eth expert cannot be enforced without further court proceedings. In the given context, I would prefer the arbitration process of dispute resolution. Arbitration is the process where the parties to the dispute may consensually appoint an arbitrator to resolve the dispute (Pryor 2016). The parties are at liberty to select an arbitrator who is not only qualified but also adequately experienced in the field of arbitration. The arbitrator shall resolve the issues based on the legal principles and material facts of the matter in dipute. Further, this process in economic and less time consuming, thus it would enable to resolve the issues more quickly as compared to the litigation process. Further, the decision of the arbitrator shall be unbiased and impartial by nature, which implies that issues shall be dealt with on fair terms. Furthermore, the decision of the arbitrator shall be binding and enforceable at law and it ensures legal compliance with the statutes as the decision is based on the relevant legal principles. Reference List Ball, M., 2014.Rebuilding Construction (Routledge Revivals): Economic Change in the British Construction Industry. Routledge. Fiadjoe, A., 2013.Alternative dispute resolution: a developing world perspective. Routledge. Glendon, A.I., Clarke, S. and McKenna, E., 2016.Human safety and risk management. Crc Press. Grey, S., 2014. Risk management deficiencies in the engineering sector (1048). InMastering Complex Projects Conference 2014(p. 473). Engineers Australia. McGregor, A. and Smit, J., 2017. Risk management: Human rights due diligence in corporate global supply chains.Governance Directions,69(1), p.16. McNeil, A.J., Frey, R. and Embrechts, P., 2015.Quantitative risk management: Concepts, techniques and tools. Princeton university press. Menkel-Meadow, C., 2015. Mediation, arbitration, and alternative dispute resolution (ADR). Pryor, W., 2016. Alternative Dispute Resolution.SMU L. Rev.,2, pp.3-517. Resolution, A.D., Making, A.D., Policy, C., Cooperation, C., Infrastructure, I.P., Platforms, M.S., Treaties, W.A., Magazine, W.I.P.O., by Unit, A., Reporting, F. and des Colombettes, C., 2013. Alternative dispute resolution. Sadgrove, K., 2016.The complete guide to business risk management. Routledge. Spencer, D. and Hardy, S., 2014.Dispute Resolution in Australia: cases, commentary and materials. Thomson Reuters. Taroun, A., 2014. Towards a better modelling and assessment of construction risk: Insights from a literature review.International Journal of Project Management,32(1), pp.101-115.