Mastering Claims Resolution Timing A Strategic Approach

1. Introduction

In the fast-paced and dynamic world of construction projects, the ability to effectively manage and resolve claims can be a defining factor in determining project success. Claims, whether initiated by the contractor or the owner, can arise from a variety of sources, including changes in project scope, delays, unforeseen site conditions, or disagreements over contract interpretations. When these disputes are left unresolved, they can escalate into costly and time-consuming legal battles, eroding project budgets, timelines, and professional relationships.

The strategic timing of claims resolution is a critical consideration for both contractors and project owners, as it can significantly impact the project's overall outcome. Two primary approaches exist: early resolution and end-of-project settlement. Each approach offers distinct advantages and potential drawbacks, making it essential to carefully evaluate project-specific factors to determine the most appropriate strategy.

Early claims resolution, when executed effectively, can prevent disputes from escalating, reducing the time and cost associated with prolonged conflicts. It fosters a cooperative environment, maintaining positive relationships among project participants, and allowing for more accessible and fresh information, which can lead to more accurate and fair settlements. However, this approach may also result in less favorable terms for the party resolving the claim early, as they may be negotiating from a weaker position, or lead to rushed or incomplete documentation.

Alternatively, end-of-project claims settlement allows for the accumulation of all claims and the resolution of disputes once the project is complete. This approach can provide owners with stronger negotiation leverage, having completed the project and holding the finished facility. It also enables the parties to formally close out the project and move on to new endeavors without lingering disputes. However, end-of-project settlements may strain relationships due to accumulated grievances, increase complexity and costs, and rely on less accessible or vague information over time.

To navigate this critical decision, construction contract and law professionals must carefully evaluate the project's unique circumstances, including the complexity of the disputes, the impact on the project's schedule and budget, the availability of information and evidence, and the potential risks and costs associated with litigation. By understanding the strategic considerations for both early resolution and end-of-project settlement, project stakeholders can make informed decisions that prioritize the project's success and the preservation of professional relationships.

2. Factors Influencing Claims Resolution Timing

When deciding between pursuing early claims resolution or waiting until the end of a construction project to settle claims, there are several key factors that construction professionals should consider. The optimal approach depends on the specific circumstances of the project and the potential impact of each strategy.

Cost Implications

One crucial factor is the potential cost implications of each approach. Early claims resolution can help prevent disputes from escalating, reducing the time and expenses associated with prolonged conflicts. By addressing issues promptly, project teams can avoid the accumulation of costs that often accompany end-of-project settlements. However, early resolution may also result in less favorable terms for one party if they negotiate from a weaker position or lack complete information.

Relationship Management

Relationship management is another essential consideration. Early claims resolution can foster a cooperative environment and maintain positive working relationships among project participants. By addressing grievances promptly, teams can prevent tensions from building up over time. Conversely, end-of-project settlements may strain relationships due to the accumulation of unresolved issues throughout the project's lifecycle.

Information Availability

The availability and accessibility of information also play a role in the decision. Early resolution allows for more accessible and fresh information, which can lead to more accurate and fair settlements. End-of-project settlements may rely on less accessible or vague information, as evidence and facts can become harder to substantiate over time.

Negotiation Leverage

Negotiation leverage is another factor to consider. End-of-project settlements may provide owners with stronger negotiating positions, having completed the project and holding the finished facility. On the other hand, early resolution may benefit contractors by addressing issues while the work is still ongoing and facts are more clear.

Dispute Complexity

The complexity of the dispute itself should also be evaluated. Simpler issues may be more effectively resolved early, while more complex disputes might benefit from being addressed at the end of the project when all information is available.

Project Impacts

Construction professionals should consider the potential impact of the dispute on the project's schedule, budget, and quality. Early resolution can help mitigate these impacts, preventing delays and cost overruns, while end-of-project settlements may allow these issues to compound over time.

Alternative Dispute Resolution

It's also essential to explore alternative dispute resolution (ADR) methods, such as mediation or arbitration. These methods can be more efficient and less adversarial than litigation, potentially making them more suitable for early claims resolution.

Litigation Risks

Finally, construction teams should weigh the risks and costs associated with litigation, which can be lengthy, expensive, and may not result in a favorable outcome. Early resolution can help avoid these risks, while end-of-project settlements may increase the likelihood of legal action if disputes remain unresolved.

Construction projects frequently encounter claims and disputes – from change orders and delays to contract scope disagreements. How and when these claims are resolved can significantly impact project cost, schedule, and relationships. This report provides an international analysis of two contrasting strategies for resolving construction claims: resolving disputes early resolution (during the project) versus waiting for an *end-of-project settlement(Post-Project)**. It compares the approaches, discusses when each is appropriate, examines real-world case studies across regions and project types, and reviews legal/contractual frameworks. The report concludes with best practices and recommendations for optimizing claims resolution timing in construction.

3. Comparison of Approaches: Early Resolution vs. End-of-Project Settlement

Early Resolution refers to addressing and settling claims as they arise during the course of a project, rather than deferring them. This might involve prompt negotiation of change orders, on-the-spot settlements, or use of interim dispute resolution mechanisms (such as adjudication, mediation or dispute boards) while work is ongoing. In contrast, an End-of-Project Settlement approach postpones the resolution of claims until project completion (or near the end), often bundling multiple issues into final negotiations or formal disputes (arbitration/litigation) after work is done.

The table below summarizes key differences between the two approaches:

Aspect	Early Resolution (During the Project)	End-of-Project Settlement (Post-Project)
Timing	Disputes addressed contemporaneously – as soon as they arise during construction.	Disputes deferred to project close-out or after completion.
Typical Process	Informal negotiations, change order agreements, interim ADR (adjudication, mediation, Dispute Boards) to resolve issues promptly.	Accumulation of claims for final account negotiation, or formal arbitration/litigation at the end.
Benefits	– Minimizes escalation: prevents claims from compounding. <br> – Cost control: avoids prolonged disruptions and interest/build-up on claims. <br> – Preserves relationships: collaborative problem-solving can maintain trust during the project. <br> – Improved cashflow: contractor can receive compensation sooner if entitlement is agreed early.	– Focus on delivery: parties can concentrate on finishing the project without ongoing dispute distractions. <br> – Holistic settlement: all issues dealt with in one package (potential for trade-offs among claims). <br> – Time to assess impacts: full knowledge of project outcomes may clarify the merits and values of claims.
Risks & Challenges	– Inconvenience: can divert time/attention during construction to negotiate/argue claims. <br> – Incomplete information: some impacts (e.g. total delay) may not be fully known early. <br> – Temporary compromise: interim resolutions might need later adjustments if circumstances change. <br> – Legal complexity: repeated ADR processes or adjudications require resources (though usually less than formal litigation).	– Escalation of conflict: unresolved issues can fester, becoming larger disputes <br> – Higher cost & time: disputes “do not get better or less expensive with age” – legal fees and interest accumulate over time. <br> – Strained relationships: end-of-project claims often turn adversarial, harming long-term partnerships. <br> – Cashflow/financial risk: contractors carry costs of claims until resolution, which can threaten project finances.

Early resolution strategies often involve proactive contract administration – timely notices of claim, frequent dialogue, and use of contract mechanisms to settle issues. For example, the FIDIC 2017 contract forms introduced standing Dispute Avoidance/Adjudication Boards (DAAB) available throughout the project, specifically intended “to avoid claims accumulation” by addressing disputes as they arise. By contrast, end-of-project settlements may occur through final account negotiations or arbitration after project handover. This approach sometimes stems from a desire to avoid conflict during execution, pushing contentious discussions to a later phase. In some cases, parties adopt a “wait and see” posture – tolerating issues in the short term and resolving all claims in one go at the end. This can be common where contracts lack interim dispute resolution clauses or in environments where the prevailing practice is to settle at project closure.

Benefits and Risks of Each Approach

Each approach carries distinct benefits and risks. Early resolution can keep projects on track by quickly putting disputes to rest. Settling a claim mid-project can inject clarity – for instance, granting a time extension early can help rebaseline the schedule and reduce further delay damages. It also reduces uncertainty for all parties. Indeed, industry experts note that any claim or dispute that can be settled early, while construction is ongoing, is usually “a better all-around solution” than letting it drag on post-completion. Early settlements often involve some compromise, but they avert the scenario of a protracted legal fight later. They also preserve working relationships – resolving issues together can build trust and communication channels. On the downside, mid-project dispute resolution might be challenging if the full consequences of a problem are not yet known, or if parties are too busy with project delivery to engage in negotiations. There is also the risk that frequent claims negotiations could sour the team atmosphere or cause short-term disruptions (meetings, expert analyses, etc.). However, modern contracts and project management practices encourage dealing with issues promptly, precisely to avoid a large overhang of disputes at the end.

End-of-project settlements, in turn, delay conflict resolution. This can be beneficial where parties want to maintain a cooperative facade during construction and not “rock the boat” with claims – effectively kicking the can down the road. It can also make sense if multiple small claims might offset each other, allowing a netting-off in final negotiations. In some complex projects, certain claims truly cannot be quantified until the work is finished (for example, the total cumulative impact of multiple changes on productivity). An end-of-project approach gives a broader view of entitlements. The risks, however, are significant. Unresolved claims can snowball – by project’s end, positions may harden and the sheer volume of accumulated issues can lead to lengthy dispute proceedings. It is widely observed that disputes grow more costly over time; as one construction disputes report quips, “unlike fine wine, disputes do not get better or less expensive with age.”. Postponing claims often means higher legal and expert costs later, and potentially paying for disruption that could have been avoided by an earlier solution. Additionally, a large unresolved claim liability can strain a contractor’s cashflow and even jeopardize project delivery if the contractor is banking on recovery of that claim to fund ongoing work.

Key Factors Influencing the Choice

Key factors influencing the choice of resolution timing include:

Contractual Mechanisms: Contract terms largely shape the strategy. If the contract mandates timely claim submission and provides interim dispute resolution steps (e.g. adjudication, dispute boards, or required mediation), parties are more likely to pursue early resolution. In contrast, if a contract simply defers disputes to a final arbitration, the project may lean toward end-of-project settlement. The FIDIC forms, for instance, require notice and referral of disputes to a DAB/DAAB as they arise, and ignoring these procedures can forfeit rights; as a result, conscientious contractors will bring up issues early to preserve claims. On the other hand, some bespoke contracts or less formal agreements might lack clear interim dispute clauses, leading parties to default to resolving everything at the end.
Project Complexity & Duration: In very complex, long-term projects, letting disputes accumulate can be especially risky – a lot can go wrong over time, and disputes may compound. Thus, large infrastructure and engineering projects often implement dispute boards or stepped dispute resolution clauses to handle conflicts along the way. Simpler or shorter projects might be able to address all issues in one final settlement if parties prefer.
Dispute Severity and Impact: If a claim is severe (high value or critical to cashflow), there is strong incentive to resolve it early – otherwise the contractor may struggle to continue work. For example, a significant payment dispute or a major unforeseen condition claim might need an early decision so that work isn’t disrupted. Conversely, very minor issues might be parked until later to avoid continually reopening the contract.
Cost Implications: Parties will weigh the cost of engaging in resolution now versus later. Early resolution might incur some negotiation or expert costs, but these are typically minor compared to a full-blown arbitration at the end. Moreover, settling early can save on financing costs – the longer a claim is unresolved, the more interest or financing charges (and legal fees) pile up. From a cost-risk perspective, early resolution often pays off by limiting the period of uncertainty and avoiding compounded claims ().
Relationship and Reputational Factors: A collaborative project environment will favor early issue resolution – project partners who see each other as long-term collaborators will want to fix problems quickly to preserve goodwill. If the relationship is more adversarial or arms-length, parties might be content to duke it out at the end. Additionally, owners concerned about their reputation for fairness may push to resolve contractor grievances early, whereas those who worry about “setting a precedent” for claims might resist early settlements.
External Constraints: Sometimes insurance, financing, or regulatory factors influence timing. For instance, if an insurer is involved in a claim (like a major site accident or defect), the resolution might occur after project completion when insurance negotiations conclude. Or a public agency might prefer end-of-project audits and settlements due to budget processes. These external factors can override the internal project preference.

In summary, early resolution and end-of-project settlement represent two ends of a spectrum. Many projects use a hybrid approach – resolving straightforward issues early and deferring only truly contentious or complex matters. The general industry trend, however, has been to encourage more proactive resolution. Standard contracts and best practices now emphasize dealing with claims sooner rather than later to avoid the multitude of problems that come with deferred disputes.

4. Situational Appropriateness of Timing

The optimal timing for resolving a claim depends on the situation. Some guiding criteria can help determine when early resolution is most advantageous versus when waiting until the end might be justified.

When is Early Resolution Advantageous?

Early claim resolution is typically beneficial under the following conditions or criteria:

Clear Liability or Entitlement: If it’s relatively clear which party is responsible for an issue (or a contract mechanism exists to decide it quickly), settling it early avoids unnecessary delay. For example, if a design change by the owner is unquestionably a compensable change, it’s better to issue a change order promptly than to argue about it for months.
Urgency for Project Continuity: When a dispute, if left unresolved, could hinder progress or stop work, an early resolution is critical. A prime example is a payment dispute – a contractor who is not paid may slow down work or demobilize. Resolving such claims early (via negotiation or adjudication) keeps the project on track.
Significant Cost/Schedule Impact Accruing: The longer a claim-related issue remains unresolved, the more it might cost. If a delay is ongoing, providing a time extension early can prevent stacking of delay penalties. As one industry source notes, addressing portions of a dispute “as early as possible” is wise because disputes only get more expensive with time. Early resolution can cap the costs (both in direct impact and indirect management/legal costs).
Preservation of Relationship: In collaborative delivery models or partnering arrangements, there is a mutual interest in nipping disputes in the bud to maintain a good working relationship. Settling claims through amicable discussion or mediation during the job can reinforce trust. Parties that expect to work together again (or that prioritize jobsite harmony) will lean toward early, amicable settlements.
Contractual Time Bars: If contracts have strict notification and claim submission deadlines (common in international contracts), raising and dealing with the claim early is not just advantageous but often necessary. Ignoring or postponing claims can lead to losing rights – and even if not lost, it “will add to delays and costs later”. Thus, compliance with contract notice provisions naturally leads to earlier resolution attempts.
Availability of Dispute Resolution Forums: When efficient interim dispute resolution methods are available (like adjudication, dispute boards, or expert determination), it makes sense to use them rather than wait. For instance, in the UK any party to a construction contract has a statutory right to adjudication – a 28-day binding decision process – which provides a quick way to resolve issues and allow work to continue. In such contexts, it is usually advantageous to refer disputes as they arise, get a decision, and move on (even though the decision can be reviewed later). Many projects worldwide now employ Dispute Review Boards (DRBs) or DAABs during construction; these panels have proven effective in resolving issues contemporaneously so that no disputes remain at completion. Projects that set up these mechanisms expect to settle matters early by design.

Early resolution is favored when it can prevent problem escalation and there is a viable path to settle the issue fairly at that moment. Even if it requires compromise, an early settlement can be “a better all-around solution for both parties” than a protracted fight. Parties should particularly consider early resolution if the dispute is affecting ongoing work or if delaying would significantly increase costs or risks.

Conditions Favoring End-of-Project Settlement

In some cases, deferring claim resolution until the end of the project is either necessary or potentially beneficial:

Uncertain or Evolving Impacts: Certain issues may need the fullness of time to reveal their true impact. For example, consider a series of design changes and delays – the cumulative schedule impact might not be fully measurable until the project is complete. Parties might choose to wait and see how much delay in total occurred before negotiating an extension and associated costs. Settling too early, in this case, could under- or over-compensate if based on incomplete data.
Multiple Interrelated Claims: When there are many minor claims or cross-cutting issues, it can be efficient to bundle them into one global settlement. For instance, a contractor might have some claims for extra work, while the owner has counterclaims for liquidated damages. Rather than settling each item separately during construction, the parties might negotiate a single net payment at the end, balancing all entitlements. This can simplify matters – but it requires trust that both sides will negotiate in good faith later.
Avoiding Distraction and Conflict During Execution: Some project teams consciously agree to “park” disputes to maintain focus on construction. High-profile projects may adopt a dispute moratorium during critical phases, pushing all claims to be discussed at project close-out. The reasoning is that fighting during the job could delay decisions or distract key personnel. By postponing disputes, they hope to finish faster (albeit with a pile of claims to resolve later). This approach is risky, but in certain tight schedule scenarios, management might accept it to keep everyone moving forward with minimal conflict.
Contractual or Legal Strategy: Occasionally, parties may wait because the contract dictates a particular process (e.g. a final claim submission at project end) or because they prefer a single arbitration covering all issues (for efficiency or tactical reasons). For example, if a dispute involves a novel legal issue, a party might prefer to have it all resolved in one go by an arbitration tribunal rather than piecemeal decisions. Additionally, in some jurisdictions or contracts, interim decisions might be non-binding, so a party might calculate that it’s better to resolve everything in a binding forum at the end.
Leadership and Change in Relationship at End: At project close-out, senior executives often get involved to settle accounts. Sometimes a fresh set of eyes (who were not entrenched in day-to-day conflicts) can facilitate a settlement that project-level staff couldn’t reach. In such cases, waiting until completion, when top management meets to reconcile, could yield a more pragmatic settlement (often termed a “business settlement”). This can work if both parties are willing to compromise once the dust has settled and the project is delivered. (It’s worth noting, however, that this strategy gambles on goodwill at the end – which may or may not exist.)
Severity of Dispute Requires Formal Resolution: If a dispute is extremely large or contentious (e.g. hundreds of millions in claims), the reality might be that it will end up in arbitration or court no matter what. In such situations, parties might continue working and let their legal teams handle the fight in parallel or afterwards. For instance, on a megaproject where the contractor and owner are at odds on fundamental issues, they may simply agree to disagree and finish the work, then head to arbitration post-completion. End-of-project settlement in this context might actually mean no amicable settlement – just a final legal adjudication.

Even when choosing to settle at the end, it’s important that parties still follow contract requirements (like giving timely notice of claims) to preserve their positions. Deferring resolution does not mean ignoring the dispute – it is more like an agreement to address it later. The risk, of course, is that unresolved issues can blow up. In general, consciously opting for end-of-project settlement should be done with caution. It may be more suitable in environments where it’s culturally expected (some regions traditionally negotiate everything at the end) or when interim resolution avenues truly do not exist. Even then, parties must manage the impact of this timing choice.

Impact of Timing on Project Outcomes

The timing of claims resolution can materially affect project costs, relationships, and legal exposure. Disputes are inevitable in construction projects, but when they’re resolved can shape outcomes far beyond the immediate issue. Here’s how timing influences cost, collaboration, and legal risks:

Project Costs: A Race Against the Clock
Early resolution is a financial safeguard. Addressing disputes in real-time prevents costs from snowballing:

Avoiding Delay Costs: Quick decisions—like approving an extension of time or resequencing work—keep projects moving. Delays paused early minimize ripple effects on schedules and budgets.
Capping Claim Growth: Unresolved claims accrue interest, inflation adjustments, or financing charges. Settling early limits these additions.
Reducing Overhead: A global study found disputes take an average of 15 months to resolve, with legal fees, expert costs, and personnel hours adding up. Resolving an issue in 2 months instead slashes these expenses.
In short, faster resolution = lower friction costs.

Relationships and Team Morale: Trust vs. Tension
Timing shapes the project’s human dynamics:

Building Trust: Early resolution requires collaboration. Parties working together to solve problems reinforce mutual commitment to fairness and project success. This strengthens owner-contractor trust.
Preventing Resentment: Letting disputes linger fosters a “fight later” mindset. Teams grow guarded, and minor issues escalate into adversarial standoffs. By project end, relationships can fracture entirely.
Broader Stakeholder Impact: Subcontractors, suppliers, and funders also feel the strain of uncertainty. Open communication preserves alignment across all parties.
A cooperative atmosphere hinges on addressing issues before they calcify.

Legal Exposure: Mitigating Risk Through Speed
Early action limits legal pitfalls:

Informal Methods Work: Negotiation or mediation keeps disputes out of court. Settlements are confidential and avoid setting unfavorable precedents.
Deadlines Matter: Postponing resolution risks missing contractual or statutory deadlines (e.g., claim notice windows). Early action ensures compliance.
Evidence Stays Fresh: Memories fade, documents get lost, and timelines blur over months. Resolving disputes early preserves clear evidence.
Jurisdictional Nuances: Some regions, like the UK, mandate interim resolution (e.g., adjudication). Ignoring these frameworks can have legal consequences.
Procrastination increases the likelihood of costly, public legal battles.

The Bottom Line
Timing isn’t just a detail—it’s a strategic lever. Addressing disputes early curtails costs, sustains collaboration, and reduces legal vulnerabilities. For projects aiming to finish on budget and with relationships intact, proactive resolution isn’t optional; it’s essential.

In essence, the earlier a claim is resolved, the more likely the project will avoid the worst outcomes of disputes (cost overruns, destroyed relationships, and drawn-out litigation). That said, each claim must be evaluated on its own merits to decide the optimal timing – which is why many contracts give a structured timeline (initial discussions, then interim adjudication or mediation, then final arbitration if needed).

5. Legal and Contractual Considerations

The timing of claims resolution in construction is heavily influenced by legal frameworks and contractual dispute resolution clauses. Different countries and standard contracts provide various mechanisms – from mandatory ADR before litigation to timeline requirements – that affect whether disputes get resolved early or late. This section provides an overview of international practices, including the role of Alternative Dispute Resolution (ADR) methods (mediation, arbitration, adjudication, etc.) and relevant legal standards.

Contractual Frameworks and International Standards

Construction contracts are more than legal documents—they’re roadmaps for resolving conflicts. Standard form construction contracts often include multi-tiered dispute resolution clauses that encourage early settlement efforts before invoking formal proceedings. The structure of these agreements often dictates when and how disputes get addressed, directly impacting project timelines and outcomes. Let’s explore how such frameworks—FIDIC and bespoke contracts—prioritize (or hinder) early resolution. For instance:

FIDIC Contracts: A Global Standard for Proactive Resolution
Widely used in international infrastructure projects, FIDIC contracts embed dispute resolution into the project lifecycle:

Staged Escalation: Disputes first go to the engineer for determination. If unresolved, they escalate to a Dispute Adjudication Board (DAB) or Dispute Avoidance/Adjudication Board (DAAB) for rapid adjudication. Arbitration is a last resort.
Standing DAABs: The 2017 FIDIC update emphasizes continuous conflict management by mandating standing DAABs. These boards engage throughout the project, addressing issues early rather than letting them accumulate .
Cooling-Off Periods: After a DAAB decision, parties must attempt an “amicable settlement” for 56 days before pursuing arbitration. This window encourages negotiated resolutions mid-project, reducing the need for drawn-out legal battles.
FIDIC’s framework ensures most disputes are resolved at earlier stages, with arbitration reserved only for the most intractable conflicts.

Bespoke Contracts: Flexibility with Risks
Custom contracts offer tailored terms but require careful navigation:

Stepped Negotiations: Many bespoke agreements mandate escalating talks—starting at the project manager level and moving to senior leadership—to foster early resolution. Some even require mediation before arbitration.
Time-Bar Clauses: Certain terms, like requiring claims to be submitted within 30 days of an incident, force timely action. While these clauses prevent last-minute disputes, they can backfire if teams overlook deadlines, risking claim waiver.
Double-Edged Flexibility: Poorly drafted clauses might discourage early resolution—e.g., vague notice requirements or excessive bureaucratic hurdles. Conversely, well-structured terms can mirror FIDIC’s proactive approach, streamlining dispute management.
Understanding bespoke contracts is critical: their terms can either accelerate resolution or unintentionally incentivize delays.

Contract frameworks are powerful tools for shaping dispute outcomes. FIDIC’s staged process and standing DAABs exemplify how structured timelines promote early resolution, curbing costs and preserving relationships. Bespoke contracts, while flexible, demand vigilance to avoid pitfalls like hidden time bars or procedural delays.

Whether using standardized or custom agreements, the lesson is clear: timely dispute resolution hinges on contract design. Proactive frameworks not only minimize legal risks but also keep projects—and teams—moving forward.

6. Best Practices and Recommendations

Effective claims management in construction means not only resolving disputes when they occur, but also taking steps to avoid them or minimize their impact. Based on the analysis above, here are best practices and practical recommendations for construction professionals to optimize claims resolution timing and improve project outcomes:

1. Establish Clear Contractual Procedures:
Set clear dispute resolution steps in the contract from the start. Use standard or customized clauses to encourage early claim resolution. Ensure timelines for notices and submissions are followed to avoid complications later.
2. Implement Dispute Avoidance Measures:
Prevent disputes by using tools like risk registers, early warnings, and regular communication. Holding issue review meetings and involving neutral parties early helps avoid formal claims.
3. Address Claims Promptly and Fairly:
Respond quickly to claims during the project. Evaluate and resolve valid claims without delay. Early resolution avoids escalation and builds trust. Escalate unresolved issues to senior levels without waiting for project close.
4. Utilize ADR Early and Wisely:
Use mediation or adjudication early when negotiations stall. ADR methods like mediation or dispute boards are faster and cheaper than litigation, and often lead to quick settlements.
5. Maintain Accurate Documentation & Analysis:
Keep detailed records throughout the project to support or defend claims. Use software to track delays and changes. Timely, evidence-based analysis supports faster resolution and builds transparency.
6. Foster a Cooperative Project Environment:
Encourage teamwork and open communication. Promote a culture where problems are addressed together. Partnering agreements and collaborative setups help surface and solve issues early.
7. Know When to Escalate vs. Settle:
Not all claims need immediate action; prioritize based on impact. Use a resolution ladder to escalate unresolved issues step by step. Settle what you can early and document clearly to avoid future confusion.
8. Preserve Relationships (Don’t “Win the Battle, Lose the War”):
Avoid aggressive negotiation tactics. Focus on fair, practical outcomes. Maintain good relationships for current and future projects. A cooperative mindset helps resolve disputes faster and more constructively.

7. Conclusion

In conclusion, the decision between pursuing early claims resolution or end-of-project settlement in construction projects is a complex one that requires careful evaluation of project-specific factors. Throughout this blog post, we've explored the potential benefits and drawbacks of each approach, providing practical insights to help construction professionals navigate this critical decision.

On one hand, early claims resolution offers the advantages of cost savings, time efficiency, and preservation of relationships among project stakeholders. By addressing disputes promptly, project teams can mitigate risks, improve communication, and maintain focus on project delivery. However, it's essential to weigh the potential drawbacks, such as setting precedents for future claims, incomplete documentation, and the risk of negotiating from a weaker position.

Conversely, end-of-project claims settlement allows for a comprehensive assessment of all issues, with the potential benefits of closing out the project cleanly, releasing retained earnings, and freeing up bonding limits for future endeavors. However, this approach also carries risks, including increased complexity, deterioration of relationships, potential for unfavorable settlements, and the possibility of litigation.

Ultimately, the decision should be guided by the specific indicators and triggers present in each project. Early communication of disputes, changes in project parameters, unresolved change orders, and disputes with a solid factual or contractual basis may favor early resolution strategies. Conversely, significant deviations from the original plan, changes in project timelines, and the cumulative impact of multiple issues may signal the need for end-of-project settlement.