Cost Effective Construction Dispute Resolution

Cost Effective Construction Dispute Resolution

3 May 2017

Building disputes invariably revolve around four questions.

  • Are there defects in the building?
  • What is the cause of the defect(s)?
  • Who is responsible for the defects?
  • What will it cost to fix the defects?

There is plenty of case law involving statutory interpretation and the vagaries of contractual dealings, but building disputes predominantly concern defective workmanship.

In recognition of this truism, Acts of Parliament like the NSW Home Building Act and the Victorian Domestic Building Contracts Act were promulgated. Although these Acts of Parliament regulate the operation of residential building contracts, the legislature is very much preoccupied with the statutory warranties that stipulate that builders must build well.

But the existence of dedicated building lists in the tribunals like the VCAT and the NCAT reveal that there are a sufficiently large number of abodes that are not built well. If all buildings were well-built, there would be no need for tribunal divisions and building cases lists, which are devoted to the dispute resolution regarding domestic building issues. Nor for that matter would the discipline of construction law exist.

As the majority of residential building disputes concern construction defects, the role of the expert witness is not only important but also pivotal, and cannot be dispensed with. This gives rise to the practice where plaintiff and respondent teams vie for the most reputable technical experts.

A pattern seems to have emerged where the experts tend to be at odds with one another when they give evidence as to the existence of and diagnosis of the defect(s) and the cost of rectifying the defect(s).

One can also observe that some of the more experienced experts over time become ultra-conservative. This is probably a legacy of hundreds of hours of being subjected to the blowtorch of cross-examination. This is not surprising, as repeated doses of cross-examination can make even the most resilient of characters a little gun shy.

There are also some who underestimate or overestimate the magnitude of the problem and the cost of rectification of the problem.

It is this polarity of expert opinion dynamic that causes a huge blow out in dispute resolution costs. Although expert witnesses are not supposed to be adversaries as such, their divergence of opinion abets the adversarial dynamic.

If matters go to trial, days if not weeks can be absorbed in expert evidence as each lawyer tries to get the upper hand by discrediting the other side’s expert.

Sometimes, litigants are flanked by a number of experts, engineers, quantity surveyors, water proofing consultants and so forth. Costs compound and escalate by the day. To state the obvious, this tests the financial resolve of plaintiff and respondent alike.

Yet there is a very simple and effective way to at least halve the cost of the giving of expert witness evidence, greatly diminishing the time and expenditure associated with dispute resolution.
The solution would be for tribunals and building dispute resolution divisions to establish and accredit panels of expert witnesses. There would need to be a pre-qualification criteria to ensure that the most highly regarded experts obtain the accreditation. The development of that criteria would need very careful consideration.

Once the panel was up and running, instead of the parties retaining their own expert witnesses, tribunals would compel the parties to jointly retain a tribunal-nominated expert witness to diagnose the defect and the rectification methodology.

A separate costing expert may need to be retained to quantify the value of the defects but again that expert could be chosen from the panel of accredited experts.

Both parties would remunerate the expert on a 50/50 basis, and the expert would inspect, prepare the report and then table the report at a mediation or in hearing. The adversarial element of expert evidence would be expunged and the parties (and indeed the decision makers) would be afforded the benefit of non-contentious, impartial and objective expert witness testimony.

The cost savings that would flow from such improvisation would be likely immense and the time to resolve residential disputes would in all likelihood plummet. Furthermore, the removal of the contentious aspect of expert evidence would in all likelihood mean that fewer matters proceed to trial.


By Professor Kim Lovegrove MSE RML, Senior Lawyer, Lovegrove & Cotton – Construction and Planning Lawyers

This article is written for general information only and is not to be construed as a legal advice. If you require legal assistance, please contact Lovegrove & Cotton Lawyers and our experienced lawyers will assist you based on the facts and circumstances of your case.