Identifying focus areas to decode the decision to litigate contractual disputes in construction

Jagannathan, Murali; Delhi, Venkata Santosh Kumar

doi:10.1108/ecam-01-2021-0014

Cited by 10 publications

(17 citation statements)

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“…The individual and project-level “focus areas” (frame-influencers) influencing the TTL have been identified by Marzouk et al. (2011) and Jagannathan and Delhi (2022). Therefore, there is a need to develop a larger unified model to understand the TTL.…”

Section: Discussionmentioning

confidence: 99%

“…However, when an amicable settlement fails, the tendency to litigate (TTL) surfaces (Jagannathan and Delhi, 2020). Once the litigation worthiness of the dispute is evaluated at the individual and project levels (Jagannathan and Delhi, 2022), the decision to litigate rests with the organisation. While the litigation tendencies take shape, progressing from an individual level to a project level and finally reaching the organisation level, in this study, the scope is limited to identifying an organisation's financial conditions influencing litigation motives.…”

Section: Introductionmentioning

confidence: 99%

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Decoding a construction organisation's tendency to litigate: an understanding through financial statements

Jagannathan¹,

Delhi

2023

BEPAM

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PurposeDespite the availability of amicable means to resolve construction disputes, litigation remains a mainstream dispute resolution process in some countries. This tendency to litigate (TTL) calls for research to develop appropriate precautions to encourage stakeholders to resolve most commercial disputes through alternate dispute resolution (ADR) techniques. While a claimant's TTL arise from the individual, project and organisation preferences, this study, which can benefit both potential claimants and employers by saving time and money on litigation, identifies a bidder's financial parameters that may increase its litigation propensities, as a first step towards aiding employers to incorporate precautions to discourage such tendencies.Design/methodology/approachAfter the literature review, the theoretical construct proposed by Rachlinski's “framing theory of litigation” (based on Kahneman and Tversky's Prospects Theory) is used to explain organisation-level litigation decision-making. The study sources data from the financial statements of Indian construction/real estate firms, followed by panel regression analysis to test the theoretical construct's validity.FindingsThe results show that the TTL (risk-seeking behaviour) generally increases with a lower value of sales, higher assets and profitability. Interestingly, organisation-level cash flow shows an insignificant influence on litigation tendencies.Practical implicationsKnowing which financial parameters may increase litigation tendencies could help employers evaluate a bidder's propensity to litigate project disputes.Originality/valueResearchers use financial statements to explore correlations among financial variables. However, in the construction context, there are no empirical studies with data from construction firms to understand potential litigation expenses compared to specific financial ratios.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Decoding a construction organisation's tendency to litigate: an understanding through financial statements

Jagannathan¹,

Delhi

2023

BEPAM

Self Cite

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“…Per the FTL framework, a dispute with risks but higher returns (compared to the settlement offer) increases the claimant's tendency to litigate. The extent of risk and return, in turn, depends on the contractual and legal merit of the dispute (Jagannathan and Delhi, 2022). Thus, the decision to proceed further on the litigation path is influenced by the complexity of the dispute, and the same requires empirical testing (Rachlinski, 1996).…”

Section: Literature Review To Identify the Frame Influencersmentioning

confidence: 99%

“…In the construction context, researchers identify factors leading to litigation of contractual disputes (Almutairi et al, 2015;Jagannathan and Delhi, 2022;Marzouk et al, 2011). In general, it is observed that litigation is imminent if attempts to resolve disputes through alternate dispute resolution (ADR) mechanisms fail (Sambasivan and Soon, 2007).…”

Section: Introductionmentioning

confidence: 99%

Paths leading contractual disputes to litigation

Jagannathan¹,

Delhi

2023

BEPAM

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PurposeJudiciary plays a pivotal role in the overall development of a nation's economy and its involvement assures process transparency and impartiality. However, litigation is often expensive, uncertain and prone to delays. Notwithstanding such inherent challenges associated with litigation, it is observed that parties in construction disputes do resort to litigation. This study attempts to understand the potential paths triggering litigation of contractual disputes in construction. While extant researchers have identified focus areas or factors influencing litigation, the underlying paths connecting these focus areas, leading parties to litigation, is explored in this study.Design/methodology/approachConsidering the framework of Rachlinski's “framing theory of litigation” and the mixed-methods approach (qualitative and quantitative approaches), this study proposes and validates a model that identifies the paths to litigation of contractual disputes in construction.FindingsThe results of in-depth interviews, followed by validation through structural equation modelling (SEM), reveal four critical paths, namely positional focus (PF) – contract and dispute characteristics (CDC) – decision to litigate (DTL), milieu influence (MI) – CDC – DTL, MI-PF-DTL and CDC-DTL.Practical implicationsThe identified paths highlight the areas policymakers can consider while developing policy interventions to mitigate litigation.Originality/valueResearchers have identified factors causing litigation in construction. However, attempts to examine the existence of multi-factor “paths” on the decision to litigate (DTL) have hitherto received a muted response, so this study focuses on identifying the project-level path(s) leading to the litigation of contractual disputes in construction.

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“…A construction organization is different and often marred by uncertainties and risks of a higher degree when compared to other organizations (Das, 2018). The uniqueness of the construction sector (Jagannathan and Delhi, 2022) demands a more detailed factor-wise view of various aspects that may impact the functioning of a construction organization. In fact, researchers recommend considering a special focus (Chan, 2020) on the construction sector, given its diverse yet interconnected features.…”

Section: Introductionmentioning

confidence: 99%

Identification and assessment of risks related to digitalization in Indian construction: a quantitative approach

Bajpai

Misra

Kim

2023

BPMJ

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PurposeThe purpose of this research article is to investigate the critical risk factors associated with the digitalization impact on the Indian construction industry, as these firm plans to implement digitalization in order to improve their construction management processes.Design/methodology/approachIn this research article, risk factors and dimensions are taken from diverse industries and validated in the construction domain by industry and academic experts. Further, multi-criteria decision-making techniques are employed to assess the Indian construction sector scenario quantitatively. The interrelationship and weightage of risk factors and dimensions are determined by the Fuzzy Decision-making Trial and Evaluation Laboratory Analytic Network Process (DANP) method. However, the method Grey Technique for the Order of Prioritization by Similarity to Ideal Solution (TOPSIS) is used to determine the ranking of each risk factor.FindingsThis study finds 14 critical risk factors along with four risk dimensions. Operational and financial dimensions are significant risk dimensions. Whereas the threat of high outlay and low yield is a significant risk factor in construction. Besides that, the interrelationship among risk factors, the weightage of each factor and the ranking of critical risk factors are also identified.Research limitations/implicationsThis research article uses Fuzzy DANP and Grey TOPSIS techniques as exploratory research methods with a limited group of construction professionals from a leading Indian construction firm. Furthermore, comprehensive confirmatory research can also be performed with a large group of construction experts using advanced analytical techniques to validate the ranking of critical risk factors.Practical implicationsThe findings of this study provide insight into the knowledge of construction firms by emphasizing significant risk factors related to digitalization in construction operations. Another finding of this study shows that the risks associated with digitalization in construction are similar to those in manufacturing, where high outlay and low yield hold a significant role in the transformation process.Originality/valueThe research is unique since there have only been limited studies in the Indian construction scenario to analyze the significant risks associated with digitalization. Furthermore, this study demonstrates that the combination of Fuzzy DANP and Grey TOPSIS techniques may be used successfully to prioritize risks in construction digitalization, which is still in its early phases.

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Identifying focus areas to decode the decision to litigate contractual disputes in construction

Cited by 10 publications

References 100 publications

Decoding a construction organisation's tendency to litigate: an understanding through financial statements

Decoding a construction organisation's tendency to litigate: an understanding through financial statements

Paths leading contractual disputes to litigation

Identification and assessment of risks related to digitalization in Indian construction: a quantitative approach

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