Due to the influence of the construction industry on the country’s economy, resolution of disputes is very important. The Arbitration Act 1996 was passed to remedy the complaints that had made arbitration unpopular. Comments from academics and practitioners indicated that construction arbitration remained unpopular and procedural innovation anticipated had not materialised. This study considers arbitration in the construction industry in England and Wales and evaluates its use and role since the passing of the Arbitration Act 1996. It also explores the potential use of arbitration against the use of litigation, statutory adjudication, mediation and expert determination having regard to variables of size of claim and dispute. A pragmatic theoretical perspective was followed, using a survey strategy. Initially a quantitative methodology was used, with structured questionnaires sent to users of arbitration, their legal advisers and construction arbitrators. To provide extension and clarification of matters revealed from questionnaires, interviews were conducted with construction arbitrators and construction lawyers, thereby incorporating a qualitative methodology. The study shows a significant decline in the use of construction arbitration, but comparing the two periods investigated, there was less of a decline for the more recent period, compared to the earlier period. As a dispute resolution method, arbitration was considered neutral, being neither poor, nor excellent. Arbitration’s standing, overall, is poor; however, for claims between £1 million and £10 million it is similar to the other methods referred to above. Positive influences towards choosing arbitration are that arbitration is private, providing fairness, allowing control of the process with an award that is final. Negative influences are that arbitration is costly, complex with procedures styled on litigation, subject to delays and confidence issues with arbitrators’ decisions. Cost and duration of arbitration remain the most problematic features, however the investigation suggests that users and particularly their lawyer advisers are reluctant to implement cost saving procedures.

The properties of Construction Engineering include: (1) high building cost, (2) unpredictability of construction risk because of the fact that the period of executing the contract is long and the external environment is easy to change, (3) the phenomena that disputes and conflicts happen easily since a construction project normally requires a large number of constructing units, each of which owns their complicated construction technology and expertise. As the process of the construction project involves various risks, the awareness of these risks and the method of diversifying the risks become important. This dissertation focuses on study of the legal aspects of the construction contact; It first tries to analyze the properties of the construction contract, its related properties which cause higher risks than contract with consideration, and different types of disputes and conflicts in common dispute decision and arbitration judgment in construction projects. Then it studies the commitment resulting from the disputes, and the comments on disputes of same kind in the real cases. Further it makes a basic proposition to the comments. Finally it examines the feasibility of the proposition through interviewing with some experts (adopting the method of Delphi). Meanwhile it modifies the proposition and adds more comments onto it proposition, in the hope that both of the owner and the contractor can prevent the disputes at the time of making contract.¡@ In most of the real case, the owners normally transfer the risks they should have taken to the contractors. This way of distributing risks may not either bring efficiency or benefits to the contract; instead it brings more losses to both sides. There are no many clauses in the section Hire of Work in Civil Code regarding distribution of risks. Those clauses leave incomplete resolution of various risks likely to happen in the contract. Therefore it is necessary to emphasize the principles of risk distribution in the construction contract¡Gmainly the just and reasonable principle, principle of change of circumstances, and principle of good faith, etc. The construction conventions can be referred too, such as convention of project fact, and the commom law which ie formed of the opiom by the court¡Barbitration judgment¡Bmediation¡C