Ep 2 Rationale of using Negotiation and Mediation in Malaysian Construction Industry-Ms Rammit Kaur
Summary
TLDRThe video script discusses the importance of alternative dispute resolution methods like negotiation and mediation in the Malaysian construction industry. These methods are flexible, cost-effective, and maintain privacy and confidentiality, allowing parties to control the process and find mutually favorable solutions. They also help preserve business relationships and reputations, making them preferable to formal dispute resolution mechanisms.
Takeaways
- 🏗️ Disputes in the construction industry are common and must be resolved promptly to avoid irreparable damages and losses.
- 🔍 Alternative dispute resolution (ADR) is prevalent in the industry, with negotiation and mediation being particularly flexible and cost-effective.
- 🇲🇾 Negotiation and mediation in Malaysia are less formal and are still in a formative stage compared to other dispute resolution methods.
- 🤝 The process of negotiation and mediation is fluid and can be tailored to the parties' needs, without fixed procedures.
- 👥 Parties have autonomy in these processes, with the ability to control the manner and pace of dispute resolution.
- 💡 Negotiation is more subjective, driven by the parties involved, while mediation introduces an element of objectivity through a neutral third party.
- 🕒 The time taken for negotiation and mediation is typically shorter, as parties are already familiar with the dispute details.
- 💰 These methods are economically advantageous, requiring less financial outlay compared to adjudication and arbitration.
- 🔒 Privacy and confidentiality are maintained, which is beneficial for parties who wish to keep their disputes and business strategies undisclosed.
- 🤝 Negotiation and mediation are conducive to maintaining business relationships, as they promote amicable resolution and mutual agreement.
- 💡 The process encourages creative solutions and remedies that go beyond financial compensation, such as future contracts or added warranties.
- 🏢 The industry values entities that resolve disputes amicably, as it reflects positively on their business reputation and approach to conflict resolution.
- 🔑 Confidentiality in these processes also safeguards trade secrets and sensitive information, which is crucial for maintaining competitive advantage.
Q & A
Why are disputes in the construction industry considered inevitable?
-Disputes in the construction industry are inevitable due to the complex nature of projects, involving multiple stakeholders with different interests, which can lead to disagreements over various issues such as defects, delays, and performance standards.
What are the potential non-compensable damages and losses that can arise from unresolved disputes in construction projects?
-Unresolved disputes can lead to non-compensable damages and losses such as defects in the construction work, project delays, and damage to the business's reputation, which can affect its performance and standing in the industry.
Why is the use of alternative dispute resolution (ADR) common in the construction industry?
-ADR is common in the construction industry because it offers a more flexible, simple, fast, and economical approach to resolving disputes compared to formal legal processes.
How does the negotiation process in Malaysia differ from other forms of dispute resolution?
-Negotiation in Malaysia is less formal and more fluid, allowing parties to set their own process without fixed rules. It is driven by the subjectivity of the parties involved and does not necessarily require the involvement of external councils.
What is the role of a neutral third party in the mediation process?
-A neutral third party in mediation adds objectivity to the resolution mechanism, helping parties to express their concerns and understand the motivations behind the claims, without being restricted by technical contractual and legal arguments.
How does negotiation and mediation assure party autonomy in dispute resolution?
-Negotiation and mediation assure party autonomy by allowing parties to have total control over the process, not being restricted by procedural rules, and conducting the process as they deem fit according to their circumstances.
What are the cost benefits of using negotiation and mediation for dispute resolution in the construction industry?
-Negotiation and mediation are cost-effective as they rely mainly on internal resources for negotiations and have a lower course of proceedings compared to adjudication and arbitration. They also take less time, reducing overall costs for the parties involved.
Why is privacy and confidentiality an advantage in negotiation and mediation processes?
-Privacy and confidentiality are advantages because they allow parties to retain control over sensitive information and maintain the privacy of their dispute resolution process, which is crucial for preserving business relationships and trade secrets.
How does negotiation and mediation help in maintaining business relationships and reputation?
-Negotiation and mediation help maintain business relationships and reputation by allowing for amicable resolution of disputes, which is viewed positively in the industry. It also keeps sensitive business information confidential, protecting trade secrets and key personnel details.
What are some creative remedies that parties can consider in negotiation and mediation?
-Parties can consider creative remedies such as future contracts, added warranties, or the supply of additional space to compensate for damages or losses, rather than being limited to financial compensation.
Why is it important for parties to consider what would be a palatable resolution for the other party during negotiation and mediation?
-Considering a palatable resolution for the other party is important because it encourages a cooperative approach, where both parties are more likely to make concessions and reach an agreement that is favorable to both sides, thus resolving the dispute effectively.
Outlines
🏗️ Dispute Resolution in Construction: Benefits of Negotiation and Mediation
The script discusses the inevitability of disputes in the construction industry and the importance of resolving them through alternative dispute resolution methods like negotiation and mediation. It highlights that these methods are flexible, cost-effective, and maintain party autonomy, allowing for a more controlled and private process. The script emphasizes the benefits of these approaches, including the ability to maintain business relationships, protect confidentiality, and find creative solutions that are agreeable to all parties involved.
🤝 Preserving Business Relationships through Negotiation and Mediation
This paragraph focuses on the advantages of using negotiation and mediation in the construction industry to preserve business relationships and reputation. It points out that amicable dispute resolution can enhance a company's image and increase the likelihood of future business opportunities. The confidentiality of these processes safeguards trade secrets and sensitive information, which is crucial in the industry. The paragraph concludes by reiterating the overall benefits of negotiation and mediation in Malaysia's construction sector.
Mindmap
Keywords
💡disputes
💡alternative dispute resolution (ADR)
💡negotiation
💡mediation
💡formality
💡autonomy
💡cost-effectiveness
💡privacy and confidentiality
💡conciliation
💡business reputation
💡creative remedies
Highlights
Disputes in the construction industry must be resolved within a reasonable time to avoid irreparable damages and losses.
Alternative dispute resolution is a common practice in the construction industry.
Negotiation and mediation are flexible, simple, fast, and economical dispute resolution methods.
The practice of negotiation and mediation is formative in Malaysia and less formal compared to adjudication and arbitration.
Parties have control over the negotiation and mediation process, which is fluid and not fixed.
Negotiation is driven by the subjectivity of parties, while mediation adds objectivity with a neutral third party.
Negotiation and mediation allow parties to express themselves and understand the motivation for claims arising.
These processes assure party autonomy and do not restrict by procedural rules.
Negotiation and mediation are cost-effective and rely mainly on internal resources.
The time taken for negotiation and mediation is shorter due to parties' awareness of their disputes.
Privacy and confidentiality are maintained in less formal dispute resolution processes.
Early dispute resolution can help maintain business relationships and privacy.
Negotiation and mediation aim for a resolution favorable to both parties, encouraging concessions.
Parties are not restricted by technical, contractual, or legal arguments in negotiation and mediation.
Creative remedies, such as future contracts or added warranties, are possible in these processes.
Negotiation and mediation can help maintain business relationships, image, and reputation.
Confidentiality in proceedings protects trade secrets and sensitive information.
The benefits of using negotiation and mediation in Malaysia's construction industry include relationship preservation and cost-effectiveness.
Transcripts
[Music]
disputes are inevitable in the
construction industry which must be
resolved within reasonable time
if not it may cause damages and losses
that are not compensable such as defects
and delays which may affect project
performance and business repute
the use of alternative dis resolution in
the construction industry is a common
phenomenon
and is part of a long practice of all
the formal dispute resolution processes
negotiation and mediation are most
flexible
it is simple fast and economical
although negotiation and mediation is
effective means of resolution
and the practice of it has persistently
been integrated as part of the
construction industry the use of
negotiation and mediation is still
formative in malaysia
negotiation and mediation is less formal
in comparison to other forms of dispute
resolution such as adjudication and
arbitration
it is up to parties really how they set
out the process it is not fixed in any
manner and is fluid to the circumstances
it does not necessarily require the
involvement of councils negotiation is
driven by
more subjectivity of parties while the
mediation process adds in some
objectivity into the resolution
mechanism in view of the presence of a
neutral
in an escalated or stage dispute
resolution mechanism negotiation and
mediation process allows parties to
express
and parties in dispute are able to
benefit if not managed to resolve this
skill at least to understand the matter
and the motivation for the claims
arising
negotiation and mediation assures
party's autonomy
it gives the parties a total control in
the manner in which the process goes
parties are not restricted by rules of
procedure and may conduct as they seem
fit according to the circumstances
it is a cheaper means of resolution and
cost effective for parties in dispute
for negotiations parties rely on the
internal resources mainly and when it
comes to mediation the course of the
proceedings is way lesser than education
and arbitration
the time taken for negotiation and
mediation process is also much shorter
as the parties are fully aware of their
disputes and do not require the
additional time and effort to explain
etc to a third party
privacy and confidentiality is a great
advantage for parties in dispute less
formal processes such as negotiation and
mediation which are within the party's
control makes it much easier to retain
privacy and confidentiality
at early stages of dispute parties have
a higher chance of maintaining
relationship if the dispute is resolved
amicably
privacy and confidentiality certainly
enhances this chance
one of the greatest benefit of
negotiation and mediation
is that it is motivated towards
achieving a resolution that is favorable
to both parties when we
it forces parties to give a thought to
what would be palatable resolution for
the other
parties are aware that the process
requires a buy-in an agreement of both
and in order to maintain them parties
are more likely to make concessions
parties are also not restricted by
technical contractual and legal
arguments or principles in their
discourse parties are able to assess
practical scenarios limitations and
complications which some element of
empathy
in a more formal dispute resolution
mechanism
such as adjudication arbitration and
litigation the remedies that are
available to the parties are limited to
compensation
in negotiation and mediation parties
have varied options of remedies
they can come up with creative ways to
compensate for damages or losses by
way of future contracts added warranties
supply of additional space etc
negotiation and mediation also gives
party
an opportunity to maintain business
relationship
image reputation and style of doing
business is a factor that is assessed
carefully by parties in the industry
people are more likely to do business
with entities that are able to sit down
and try to resolve disputes amicably
and less likely to do business with
entities that are litigious in nature
confidentiality of the proceedings
allows for the safe keeping of trade
secrets and sensitive information such
as costing mechanism and key personnel
of experts involved there is therefore a
lot of benefit
of using negotiation and mediation in
the construction industry in malaysia
thank you
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