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f Disputes Resolution

To resolve claims, conflicts and disputes, methods currently used in the Hong Kong industry include commercial settlement, negotiation, mediation, adjudication, arbitration and litigation. Among all the methods, negotiation is considered as the most effective method in respect of less time, low cost, satisfactory outcome, minimum further disputes, better communication and relationship (Turner, 1999).

Negotiation

Negotiation is a complex process that mainly used to resolve conflicts and disagreements. Negotiation is important to resolve claims, prevent disputes and maintain a good relationship between project participants (Ren et al., 2003). Smith (1992) believes that negotiating is a nontechnical ※survival§ skills for project participants. Although negotiation is the most common and cost effective way to resolve the claims and disputes (Turner, 1999; Ren et al. 2001; Aibinu et al., 2008), not every negotiation will be effective. Some constraints may limit or restrict negotiators to perform efficiently (Ren et al. 2001, 2002, 2003). Claims may be resolved inefficiently due to the constraints, and may end up with delay resolution, even expensive litigation. The inefficient negotiation may also lead to late settlement of claims in which cause conflicts, delays or low productivity of the project (Zack, 1994). Therefore, it is worth to study the constraints and to see how to improve negotiation performances, which will be investigated in this sub-section.

2.2.1 Definition

Gulliver (1979) defined negotiation as one type of problem-solving processes. People may have disagreement and conflict on matters of common concern. In negotiation process, they make an effort to reach a joint decision. Glaser (1991) defined negotiation as one form of communication in which people have mutual satisfaction.

2.2.2 Negotiation Constraints

The claims negotiations may be inefficient. It is because different intellectual background, many variable involved, complex interactions among construction participants and inadequate negotiation knowledge (Zack,1994). The constraints will be discussed in the following:

First of all, the construction project teams are composed from different organizations. Each participant represents their own organization. Since they have their own interests, they would like maximize their benefits during the negotiation process. However, any participants are legally bound and the negotiation should be conducted within the contracts. Most of construction claims should be settled in accordance with the contract terms and provisions. Otherwise, the failure of negotiation then will force the participants into arbitration or litigation that they will suffer a lot. Due to this reason, the negotiator may maximize their benefits as much as possible and they may try to prevent from a conflict outcome. It is difficult to persuade opponent to lower their benefits. Therefore, different self-interests of the participants in negotiation is one of the constraints of negotiation.

Secondly, difference in awareness and interpretation of standard contract terms and provisions is a major contributor to the problems in claims management (Ren, 2001; Keane, 1994). It is because the contractors, engineers and clients have difficult perspectives on a project and have different expertise. As a result, they may