1

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 I am Muhammad Sajjad Akbar

I am here to present my Research.

___________________________________

Reg. No : NDU/F-15/LMS/MSPM-067

Department : Leadership and Management

Studies

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First of all, I convey my sincere
thanks and regards to all
respected teachers
ALTERNATE DISPUTE RESOLUTION; ANALYZING THE
EFFECTS OF LITIGATION ON TIME AND COST OF
PROJECTS.

DEPARTMENT OF LEADERSHIP AND MANAGEMENT

SCIENCES FACULTY OF CONTEMPORARY STUDIES

NATIONAL DEFENCE UNIVERSITY,ISLAM ABAD

 SCHEME OF PRESENTATION
Abstract

Introduction

Problem Statement

Research Gap

Research Question

Research Objective

Significant of Study

Literature Review

Theoretical Framework

Hypotheses of the study

 Research Methodology

Reliability Test

Validity Test

Analysis

Assumptions of Regression Analysis

Results of CLRM

Hypotheses Testing

Discussion

Contribution

Conclusion

Future Direction
 ABSTRACT
 The Contractual stipulations regarding time and cost are the two criterions for
determining the success of project.

 In Pakistan, most of the construction projects face time and cost overruns,
mainly due to disputes amongst the stakeholders. Disputes are directly
proportionate to time and cost overrun. This is a global phenomenon in the
construction industry, to which Pakistan is not an exception.

 Historically, disputes resulted in formal litigation; however, over time alternate

dispute resolution has become a norm.

 Earlier studies in this regard have focused upon the respective effects of
litigation and alternate dispute resolution, independently.

 The instant study aims to investigate the success of both procedures, jointly.
Moreover, the role of contract management has also been investigated as
moderator.
 Primary data was collected from professionals / experts conversant with the
litigation; non-probability, convenience, snow ball, and random sampling
techniques were adopted.

 A structured questionnaire survey was carried out to solicit the required

information about variables under study. 240 questionnaires were distributed to
the targeted population; 210 duly filed questionnaires were received back,
indicating a response rate of 87.5%.

 Primary data was analyzed using spearman’s correlation, descriptive and

quantitative statistical techniques.

 The findings of study revealed that disputes are positively associated with the
time and cost overrun (β = 1.129, P-value < 0.01);settlement through litigation
has an adverse impact (β=0.228, P-value <0.01); whereas, alternate dispute
resolution reduces the time and cost overrun (β=-0.066, P-value <0.05). The
contract management plays a vital role in both situations.
 On the basis of results, study recommends the use of alternate dispute
resolution technique for dispute settlement for success of project rather
traditional formal method of litigation.

 The scope of the study is limited to the construction projects.

 INTRODUCTION

 Introduction of Variables
 Introduction of Topic
Introduction of Variables
 The term Alternate dispute resolution (ADR) includes within its domain multiple informal
procedures for resolution of disputes among parties to contract. This is a process of dispute
resolution other than traditional formal process through courts.

Mediation Dispute
& Resolution
Negotiations Conciliation Board Arbitration

Process of voluntarily Board are constituted by

Process of settlement of Under this mechanism,
and consensually parties in advance. They
disputes involving disputes are referred to
attempt to resolve are authorized to deal
assisted negotiations. arbitrators for decision.
difference by with disputes which may
Independent neutral Arbitrators have judicial
understanding each arise in future. Their
individual assists in semi-binding powers but
other point of view and decisions are binding and
reaching a consensual protocols are informal,
reach to an acceptable some times, non-binding
resolution. Mediator or flexible and convenient to
solution. depending upon the
conciliator do not have parties.
authority to decide but authority defined in
only to assist in contract.
reaching a settlement.
 Litigation

 It is the process of resolving disputes through presentation before court of law of legal
jurisdiction. This is the most formal mechanism with pre-defined protocols and time lines.
The presentation can not be made with out legal counsel. This is a constitutional protected
method of dispute settlement.
 Time & Cost overrun

 Project time refers to the time lines agreed between parties for completion /
closing. Cost represents the amount /money for executing a certain projects.
The completion of project beyond contract stipulated time line is called time
overrun and cot spent in access of assigned amount is cost overrun.
 Introduction of Topic
• The dispute are inevitable in the construction industry world wide to which

Pakistan is not an exception. There are multiple reasons mainly; because of

the complexity of the modern construction projects, built in gaps in contract

documents, unrealistic time line, inappropriate cost, inability of parties to

understand and comprehend the differences towards eventual outcome and

poor knowledge of contract management.

• Due to above and other reasons, disputes are bound to occur. As a result of

disputes, project completion period extends and also the cost at completion

exceeds the estimated cost. Parties in contract attempt to resolve the disputes
 in interest of project and for ensuring project success. Rather parties in

dispute attempt to curtail time and cost overrun for their mutual benefit.

• Due to the complexity of nature of disputes and ambiguities in contract

documents, parties enter into litigation for the resolution of disputes.

Because heavy financial implications are always associated with the disputes

and litigation is only binding remedy available.

• There is consensus among the professionals that litigation is a lengthy,

cumbersome and costly process of resolution. Moreover, it is also agreed that

litigation further adds to time & cost overrun. That is litigation renders the

project unsuccessful. Industry professionals are focusing on a type of

Alternate method of resolving dispute for saving the project.

 But due to non-binding nature of all these techniques, disputes eventually
enters into arbitration and the Arbitral awards are almost always challenged
before the courts of law.

 Consequently due to huge delays and hiking costs, most of the projects either
become financially unviable or are abandoned by the parties.
 Problem Statement

 Resolution of Critical and complex disputes through traditional method of

litigation , being the lengthy and cumbersome process affects the project
success negatively.
 Research Gap
 There exists a gap in the literature for estimating the affect of ADR and
litigation JOINTLY on the time & cost overrun of the project.

 A lot of research has been conducted for understanding the affect of disputes,
ADR and litigation on time & cost overrun INDEPENDENTLY.

 Thus, there exists a huge gap in the industry, necessitating development of an

Alternate Dispute Resolution mechanism, which may practically facilitate in
the settlement of disputes.
 Research Questions
 What are the causes that convert into critical disputes which renders time &
cost overrun?

 What are the consequences if alternate dispute resolution mechanism is

adopted on time & cost overrun?

 What are effects of the litigation on Time & cost overrun?

 Whether ADR results into less time & cost overrun than the litigation.

 How Contract Management effects on Time and Cost overrun when disputes
are resolved through litigation?

 How contract management affects the project success when disputes are settled
through ADR.
 Research Objectives

 To understand critical causes of disputes.

 To investigate the impact of Alternate Dispute resolution on Time and Cost.

 To analyze the impact of Litigation on Time and Cost.

 To determine the moderating role of Contract in all of the above three

situations
 Significance of the Study;
 The aim of this study is to analyze, evolve and propose the relative importance
of innovative procedures and mechanisms of dispute resolution having binding
effect between parties to dispute, so as to save time and cost while reaching to a
settlement.

 It is aimed that by proposing innovative mechanisms of ADR that may be

neutral and acceptable to all the parties to dispute, this study will help in
proposing mechanisms for saving the projects which either become unviable or
are abandoned due to lengthy, difficult and highly technical
arbitration/litigation procedures.
 LITERATURE REVIEW
 The construction industry has been a leader in both dispute occurrence and
resolution system. ADR, to some extent, was found effective in dispute
resolution than litigation in Ethiopian Somali Region. ( Getahurn, Macarubbo
& Mossia, 2016).

 Arbitration is the ideal tool for resolution of construction disputes in

Swaziland. Although arbitration is ranked at top in dispute resolution but the
research highlighted gaps regarding use of ADR. Emphasis was given to the
use of ADR. (Gad, Monoh, Esmaili & Gransberg, 2015).
 A diverse range of dispute resolution methods short of litigation, commonly
known as Alternate Dispute resolution (ADR) has gained world wide
recognition. It was concluded that increased representation of ADR enhances the
probability of successful settlement. (Ayol & Pessy, 2014).
 ADR approaches, such as arbitration, are frequently used instead of litigation.
Arbitration may be adopted instead of conventional litigation process of dispute
resolution (Gill, Gray, Skitmore & Callagham, 2015).
 Delay in construction projects, cost overruns have long been common in
construction sector (Larsen, Shen, Linhard & Brunoe, 2015).
 Dispute in construction projects are quite common and very hard to be avoided.
The projects with built in DRB (ADR) face less time & cost overrun. (Agdas &
Ellis, 2013)
 Study established that requirement of ADR is the need of time for successful
completion of project (Cheng & yeung, 2013).
 Time and cost increases Seems to be a global phenomenon with no reduction in
last 70 years and an average overrun of 28%. (Flyvbjerg et al, 2003).
 Most of the construction projects in Logos Metropolis experienced an average
time overrun of 51% (Odusami and Ohsany, 2000).
 Time and cost overrun are the greater collective outcome of delay in construction
projects (Obodh & Obodoh, 2016).
 Disputes are common in international development because of inherent, cultural
factors. The decision as to the choice of most suitable dispute resolution method is
a difficult one. Project success is dependent on the selection of dispute resolution
system ( Chas, Suen & Chan, 2006).
 A unique feature of the construction industry is that disputes are bound to arise.
Thus Risk of time and cost overrun are inevitably involved in construction
projects of Rawanda. (Amandin & Kude, 2016).
 Time and cost overrun, coupled with disputes were identified as main outcome of
delays in construction projects (Aranter, Silva & Cesur, 2015).
 Construction development throughout the world are prone to time and cost
overrun because of different identified delay reasons. (Ahmed, Dlask & Hasan,
2014).
 The longer the delays in construction projects, the higher would be the cost
overrun. (Amandin & Kude, 2016).
 Interpretations and cost overruns have the effect of increasing implementation
period (Senouci, Ismail & Eldin, 2016).
 Delay in construction projects are bound to result in negative effects on the
project success (Senouci, Ismail & Eldin , 2016)
 Delay significantly lead to time, cost overrun litigation and even complete
abandonment of projects (Haq, Rashid & Aslam , 2014).
 The entire process of litigation involves stages and consequences which extends
beyond the actual litigation and results in extended costs. (Morgan & Baldrige,
2015).
 Research found that use of proper approaches of ADR to resolve disputes would
not postpone the time of completion. (Macarubbo & Mossia, 2016.
 Summary of Literature Review

 Disputes are bound to arise and risk of time &

cost overrun are inevitably involved.
 Time & cost overruns, coupled with disputes
were identified as main outcome of delays.
 (Amandin & Kule , 2016), Aranter, Silva & Ceser (2015), Ahmed, Dlask &
Hassan , 2014), Senouci, Ismail & Eldin, 2016, Odeh, Battainch(2002), Al-
monami(2000), Faridi, El-Sayegh(2006), Koursh , Al –Rashida,
Kartam(2005), Assaf, Al-Hejji (2006), S.Meeanmpol, and s.o. Ogunlana
(2006), Lo, Fung and Tung(2006), Alaghbari M.R kadir, A.Salim (2007),M.
Sambasivan and y.k soon(2007), Le- Hoai and J.Y Lee (2008), Gkritza and S.
Labi (2008), E.A El-Razek, and A Bassion (2008),A. Enshassi, Al-Najjar and
M. Kummaraswamy( 2009), G.Swies, R. Sweis, Abu Hammad, & A. Shaboul,
2007), Anika Gill, 2015).

Disputes Time & Cost Overrun

  ADR, to some extent, was found effective in dispute resolution than
litigation. Increased representation of ADR enhances probability of
success of project. Adaptation of ADR in dispute resolution faces less
time & cost overrun.
 Getahurn, Macarrabbo, & Moisia, (2016), Gad, Monoh, Esmaili &
Gransberg, (2015), Ayol & pessy, (2014), Gil .Gray, Skitnore &
Callagham ,(2015), Larsen, Shen, Linhard & Brunoe, (2015), Agdes &
Ellis, (2013).

Alternate dispute resolution Time & Cost Overrun

Litigation Time & Cost Overrun

 Poor communication or improper contract management may lead to
conflicts which eventually cause disputes. Disputes damage the
performance of contracts.
 Less information in the contract documents is the main causes of delays
which results into disputes.

Contract Management

Disputes Time & Cost Overrun

The model derived from the secondary data extracted from
literature is depicted below.

CM
LT

CD TC

ADR
 HYPOTHESES OF THE STUDY
Hypothesis 1: Causes of delay and time & cost overrun are positively associated.

Hypothesis 2: Litigation is positively related with time & cost overrun.

Hypothesis 3: Alternate dispute resolution and Time & cost overrun associated.

Hypothesis 4: Litigation mediate the relationship between causes of disputes and time &
cost overrun.

Hypothesis 5: Alternate dispute resolution mediates between Causes of delay and time
& cost overrun.

Hypothesis 6: Contract management affect the relationship between Causes of delay and
time & cost overrun.

Hypothesis 7: Contract management plays positive role among Causes of delay,

Litigation and time & cost overrun.

Hypothesis 8: Contract Management moderates the relationship negatively among

Causes of delay, Alternate dispute resolution and Time & Cost overrun.
Type of Research Research Methodology
• Quantitative, cross-sectional and explanatory research has been conducted.

Time Horizon

• The study is cross-sectional as it is conducted in 6 months time horizon.

Also the data is collected on interval scale. So it is quantitative. Statistical
techniques are adopted.
Population

• Construction manager, project managers, architect, legal professionals

working with Government, Semi- Government or private companies
constitutes the population of the study.
Target Population

• Target population consists of construction managers, project managers,

Architects, Civil Engineers, legal professionals having knowledge and
experience of disputes and litigation in the construction industry of Pakistan
due to special nature of the research.
Sample

• The elements of the targets population who are willing and voluntarily
available to participate in the study constitute the sample.

Sampling Technique.

• Non- probability, convenience, snow ball sampling technique.

• The data is collected through friends and referral networks. And from the
professionals who were voluntarily ready to submit their responses. Among
volunteers, we selected randomly who were conversant with the topic.
Sample Size.

• The rule of ROSCOE (1975) is followed for determing sample size,

S = 30 time number of variables when data collected is broken into

male/females, juniors /seniors.
 S= 10 times number of variables for multi variate research.
Alreek & Settle (1995)

S= 30-500 generally and shall be at least 10% of the population.

Gohar & Gohar

S=10 times number of variables for relationship studies

S=50 + 8n „ „ „ „ „ „ „ „ „ „ „ „ „ „ „ „ „ „.
S =30 for each variable for differential studies.

For Pilot Study.

• We adopted ROSCOE (1995) formula of 10n for multi variant study. So a

sample of 60 professionals were selected instead of 50.
For main Research.

• We decided to adopte sample size requirement of 150 (30x5).

• 240 were circulated and received back 210 (87.5%). Hence confident to
proceed further.

• Preliminary pilot study has been conducted by administering on open end

questionnaire for the development of the instrument.

• Pilot study has been conducted with structured questionnaire for verifying
the reliability and validity of the instrument through Chronbach Alpha (α)
and factor analysis. Also through relative importance index (RII) and
ranking (R) of the statement.

• Construction industry professionals (Project Managers, Construction

Managers, Civil Engineers, Legal expert) Constituted the unit of analysis.
• Primary data has been collected on Five point likert scale, through
questionnaire survey.

• Data collected is coded by assigning a number to each of the

response of the respondents.

• Data is then entered into the Microsoft Excel sheets.

• The primary data collected above is then checked for outlier and
normality.

• The analysis is carried out by computer software SPSS v16 for

frequency distribution and descriptive study.

• The analysis is made with computer software Eviews 9 for

correlational and regressional study
 Measures & Scales

• 5 Points likert scale has been adopted. (Interval Scale).

Following measures are adopted and tailored for the instrument for
research by deleting and adding statements.

• Litigation – (Anika Gill, Jason Gray, 2015)

• Alternate dispute resolution (ADR)- (Anika Gill, Jason 2015)

• Contract Management – (Jade Hall, 2014)

• Causes of delay – (G.Sweis, R. Sweis, 2007)

• Time & Cost overrun – (Bench mark study Dubai)

 Reliability Test
 Chronbach Alpha Test
 Normality Test

Results of Pilot Study Results of main research

Items Alpha value Items Alpha value
Causes of delay 37 0.74 10 0.73
Litigation 12 0.873
10 0.87
Time & Cost overrun 30 0.826
12 0.74
Alternate dispute 5 0.840
resolution 5 0.83
Contract 10 0.870
5 0.86
management
94 42 0.89

• The value of Chrombach Alpha both for pilot and main research are
found above 0.7.

• The results suggests that data is good enough for analysis and
conclusion therefore.
 Normality of Variables
Statistics

CD LT TC ADR CM

Valid 210 210 210 210 210

N
Missing 0 0 0 0 0

Std. Deviation .604 .70437 .54995 .91537 .73067

Variance .420 .496 .302 .838 .534

Skewness -.523 -.800 -1.185 -.993 -1.450

Std. Error of Skewness .168 .168 .168 .168 .168

Kurtosis .495 .586 1.772 .834 1.375

Std. Error of Kurtosis .334 .334 .334 .334 .334

Minimum 1.35 1.38 1.33 1.00 1.00

• Results of table shows that values of Skewness and Kurtosis lies

within the cut off range of -2 to +2. therefore results dictates that the
data for all of the variables is normally distributed.
• Each item / statement data is also tested for normality. The results
values of Skewness and Kurtosis for disputes is also displayed for
reference.

CD1 CD2 CD3 CD4 CD5 CD6 CD7 CD8 CD9 CD10

N Valid 210 210 210 210 210 210 210 210 210 210

0 0 0 0 0 0 0 0 0 0
Missing

Skewness -1.995 -1.040 -1.472 -1.219 -1.061 -1.536 -1.016 -1.041 -.815 -.335

.168 .168 .168 .168 .168 .168 .168 .168 .168 .168
Std. Error of Skewness

Kurtosis 0.994 1.330 1.447 1.353 1.182 0.109 -.096 0.276 .267 -1.163

.334 .334 .334 .334 .334 .334 .334 .334 .334 .334
Std. Error of Kurtosis
 Content Validity Validity
 Convergent Validity
 Discriminate Validity

Content Validity
The content validity is ascertained by the discussion with field professional
in preliminary pilot study. Each construct of a measure is discussed in detail
regarding the ease and proper understanding of the respondents. Moreover,
Internationally published instrument are taken as reference.
• Litigation – Measure by (Anika Gill, Jason Gray, 2015)
• Alternate dispute resolution (ADR)- Measure by (Anika Gill, Jason 2015)
• Contract Management –Measure by (Jade Hall, 2014)
• Causes of delay – Measure by (G.Sweis, R. Sweis, 2007)
• Time & Cost overrun –Measure by (Bench mark study Dubai)
 Validity
Convergent Validity.

• That all of the statements converge to measure the same concept.

• Factor analysis was carried out.
• Factor loading test facilitated the reduction of data. Factors with eign
value greater than 1 are retained for further analysis.
• Nunnlay (1967) recommends that factors beyond 0.635 are considered
to be sufficient for exploratory studies. Dimovsi (1994) recommends
a range of 0.5 – 0.6 are good to be taken in further analysis.
• On the basis of results of factor loading test for validity, the most
relevant items are retained.
• The same was tested through descriptive test ( Relative importance
index & Ranking).
• Before factor analysis, its underlying assumption of KMO measure
of sampling adequacy and Barletts test of spherity were checked.
Variables KMO Bartlett's Test

Approx df Sig.

Causes of Delay (CD) 0.802 246.788 6 0.000

Litigation (LT) 0.822 406.547 15 0.000

Alternate dispute resolution (ADR) 0.901 828.376 28 0.000

Contract Management (CM) 0.854 298.95 10 0.000

Time & cost overrun (TC) 0.754 216.461 15 0

The KMO values for all variables are found greater than 0.75 and
Barletts test was significant at 1% probability.
• After reliability test, the data was then subjected factor loading test.
• Factor loading test facilitated the reduction of data. Factors with eign
value greater than 1 are retained for further analysis.
• Nunnlay (1967) recommends that factors beyond 0.635 are considered
to be sufficient for exploratory studies. Dimovsi (1994) recommends
a range of 0.5 – 0.6 are good to be taken in further analysis.
• On the basis of results of factor loading test for validity, the most
relevant items are retained.
• The same was tested through descriptive test ( Relative importance
index & Ranking).
 No of items before factor No of items after factor
loading loading
Causes of delay 37 10

Litigation 12 10

Time & Cost overrun 30 12

Alternate dispute 5 5
resolution
Contract management 10 5

94 42

• After factor loading, the structured questionnaire was administered

for main research.
 Discriminate Validity

• Each of the dimension of a measure shall be different from the other

dimension with in the concept.
• Pairwise correlation test was performed.
• Each of the dimension of a measure shall be distinctly different from
the other dimension with in the concept. That is each dimension
shall hold its independent identity. For ascertaining that each
dimension is independently measuring the concept, pairwise
correlation test is conducted. The value of pairs are found correlated
at r= 0.5 – r = 0.6 significant at p-value (1%).
the results establish the discriminate Validity.
 Demographic Analysis ANALYSIS
 Descriptive Analysis
 Correlation
 Regression Analysis Demographic Analysis
Frequency Distribution of Frequency Distribution of Frequency Distribution of Role Frequency Distribution of Education
Others
Age Gender 6%
Between
Female Senior Others Bachelor
25-40 Managers
Above 40 25.24 % Executive 28.10% 33.81%
years 23.34%
years (32.86%) 35.71%
67.14% Males
74.76 % M.Phil
Executives 18.57% Masters
40.95% 19.52%

74.76% are males and
67.14% of the respondents
25.24% are females. It
were above the age of 40
represents the realistcity of
years. It means data has
data as most of the
been collected from mature
professionals conversant
respondents.
with litigation are males.
40.95% of the respondents
are executives. 76.76% are
middle above level
managers and 23-34% are
low level managers. It again
dictates that data can be
reliably used for study as
the respondents are senior
level professionals.
71.9% of the respondents
were having qualification of
BS and Mphil. 28.18%
were legal professionals and
above. The data was again
highly relevant as the topic
is related to theoretical
knowledge.
 Descriptive Analysis
Variables Mean Standard Deviation

Causes of Delays 4.14 0.45

Litigation 4.23 0.79

Time and Cost overrun 4.19 0.63

Alternate dispute resolution 3.84 0.78

Contract Management 4.36 0.74

• The results revealed that respondents generally Agree to the

dimension of each measure. Because the respondents response lies
between 3-5. That is between Neutral – Strongly Agree.
 Correlation Analysis
Time & cost Litigation Cause of Delay Alternate
overrun dispute
resolution

TC 1.000 0.763 0.850 0.228

LT 0.763 1.000 0.635 -0.131
CD 0.850 0.635 1.000 0.343
ADR 0.228 -0.131 0.343 1.000

• Results above demonstrates that all of the IV’s and DV are

statistically associated. It is also found that the associated is strong
among all other variables ( r ≥ 0.5). Some of the researchers take 0.3
as the measure of good relationship. But the association between
ADR and litigation is poor. It is understandable, as both are the
independent dispute settlement techniques but are poorly
associated. Because some of the terms can be common. Statistical
relationship could be studied.
 REGRESSION ANALYSIS

• Underlying Assumption Tests.

• CLRM Analysis
 Underlying Assumptions of Regression Analysis
• Tests of Multi-co-linearity
• Tests of Normality of Residuals.
• Tests of Homeosekadasticity (White test)
• Test of independence of data (Durbin Watson)
• Test of Correlation.
Test of Multi co-linearity.

Coefficients

Model Co-linearity Statistics

Tolerance VIF

LIM .479 2.087

ADRM .669 1.495

1
CMM .410 2.436

CDM .283 3.533

a. Dependent Variable: TCM

• The table suggests that there is no issue of multi-co-linearity as all of

VIF (Variance Inflation Factor) ≤ 5 and tolerance Tτ > 0.2.
Test of Normality of Residuals.

• The plots shows that the spread of residuals is normal.

• That is spread is evenly distributed along the regression line.

Test of Homeosekadasticity (White test).

• This test is performed individually for each model.

• The results of heterosekadasticity test for Disputes and Time & cost
overrun is as under.
Heteroskedasticity Test: (White test)

F-statistic 12.13656 Prob. F(2,207) 0.0000

Obs*R-squared 22.04041 Prob. Chi-Square(2) 0.0000

Scaled explained SS 62.43465 Prob. Chi-Square(2) 0.0000

• Value of F-stat 12.14 > F-critical = +3.0 and P-value < 0.01 suggests
that there is no issue of hetersekadacity.
Test of Independence of data (Durbin Watson)

Durbin –Watson Values

Causes of delay 1.73

Litigation 2.48

Alternate dispute resolution 1.72

Contract Management 1.71

• All of the DW values are with in the range of 1.5 – 2.5.

• Hence it is concluded that observations are independent.

Test of Correlation

TC CD LT ADR CM

TC 1.00 0.75 0.76 0.22 0.78

CD 0.75 1.00 0.63 0.34 0.70

LT 0.76 0.63 1.00 -0.13 0.57

ADR 0.22 0.34 -0.13 1.00 0.23

CM 0.78 0.70 0.57 0.23 1.00

• The above table dictates that all of the variables are statistically
associated. It was therefore considered adequate to perform
regression analysis.
 RESULTS OF CLRM

TC = -0.683 + 1.129 CD
TC = -1.69 + 0.543 LT
TC = -3.36 + 0.163 ADR
TC = 0.591+ 0.875 CD + 0.228 LT
TC = -0.594 + 1.169 CD -0.066 ADR
TC = 0.049 + 0.753 CD – 0.045 X1
TC = -0.131 + 0.652 CD + 0.211 LT +0.028 X2
TC = 0.041+0.818 CD – 0.047 ADR - 0.043 X3
 Hypotheses Testing
Hypothesis No. Independent Variables Dependent Variables Regression Co-efficient Decision

H -1 Causes of Delay Time & cost overrun 1.129*** Accepted

H -2 Litigation Time & cost overrun 0.543*** Accepted

H -3 Alternate dispute resolution Time & cost overrun Accepted

0.163**

H -4 Causes of Delay Time & cost overrun 0.875*** Accepted

Litigation 0.228***
H -5 Causes of delay Time & cost overrun -0.066** Accepted

Alternate dispute resolution

1.169***

H -6 Causes of delay Time & cost overrun 0.753*** Accepted

Contract management
-0.045***

H -7 Causes of delay Time & cost overrun 0.652*** Accepted

Litigation 0.211***
Contract Management
0.028***

H -8 Causes of delay Time & cost overrun 0.818*** Accepted

Alternate dispute resolution

-0.047**

Contract Management
-0.043***
 Discussion
• Disputes are positively associated with time and cost overrun.
• The critical causes which converts into disputes are extracted as
under.
Progress payment

Discrepancies in documents
Modifications due to poor document
Change orders
Finance Related

Ambiguities in documents
Change in specifications

Financial difficulties Poor qualification of consultants

Delay in settlement of claims

Lack of co-ordination
Disputes

Work suspension by owner

• Resolution of disputes through litigation further adds to time & cost
overrun.
• As these disputes involve heavy financial impacts to both of the
parties to a contact agreement, the parties 'agree to enter to a finally
binding mechanism of resolution of litigation.
• Although both of the parties understands the lengthy and
cumbersome process of litigation and subsequent substantial time &
cost overrun but they are left with no other choice.
• Especially party who finds himself defaulted prefer to enter into
litigation to delay the conclusion
• Resolution through ADR results in less time & cost overrun as
compared to litigation.
 Cheaper.
 Convenient.
 Controlled.
 Non –Binding.
• Due to non. Binding nature, party in dispute who feels himself at
fault avoids…………………………… ………………… ….
 Contribution

• Comparative analysis of litigation and ADR

through statistical techniques.
 Conclusion
• Disputes results in time & cost overrun in the construction industry
of Pakistan. Adaptation of litigation as dispute resolution mechanism
results in further increase in the time & cost overrun. Alternate
method of resolving disputes is the better option, as it results in less
time & cost overrun. Contract management plays vital role which
matters in disputes are attempted to be resolved. Contract
management contributes negatively when disputes are resolved
through litigation. And the role of contract management in case of
ADR is otherwise.
 Limitation

• The study is limited to the construction industry

of Pakistan.
 Future Direction

• It would be of interest to conduct another survey for the purpose of

development of the instrument only in context of the topic of the

study. It would also be interesting to replicate this study in other

economic and culture contexts. Finally, another future important

study could be the development of alternate dispute resolution

document to be implemented or adopted.

THANKS!
Any questions?

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