When construction disputes formalise, they ultimately focus on matters such as what the contract says, how notices were given, and whether the parties complied with their obligations. In practice, however, many disputes have far more to do with how people and teams interact during delivery. They can be traced back to behaviour, communication, and the way decisions are made under pressure well before any legal issue is raised. 

We examine these dynamics and outline practical steps project leaders can take to manage them. This article builds on themes from earlier articles in this series, particularly the importance of contract administration and early planning, and the aspect that even the best drafted contract cannot fully control the people factor.

Why the people factor matters

Every project relies on people making decisions, asking questions, raising issues, and communicating instructions. This means that even when a contract is clear, the behaviours around it can undermine its effectiveness. On most projects, these issues rarely present as a single moment but instead as a series of decisions or missed opportunities that compound over time. Communication gaps, differing interpretations of expectations, reluctance to escalate issues, overconfidence, positional behaviour, and inconsistent messaging across disciplines or organisations can all contribute to disputes. While these issues are inevitable even among capable teams, formal disputes arising from them are not. With good systems and awareness of this inevitability factor, project teams can manage these risks just as effectively as technical or contractual ones.

Communication breakdowns and how to prevent them

Communication issues are one of the most common contributors to disputes, but they can also be one of the most manageable. One effective step project leaders can take is to establish communication expectations early. This includes clarifying who can give (and receive) instructions, how those instructions are to be recorded, which channels should be used for formal versus informal updates, and how conflicting information will be resolved. 

This is particularly important in co-location settings where you have less experienced team members in an environment with savvy counterparties who give verbal instructions. Among other issues, this can lead to both scope creep through stealth and missed timeframes as workflows are disrupted and reprioritised. 

Addressing individual behavioural tendencies

Individual behaviour plays a significant role in how issues are created and handled. Overconfidence can lead someone to take a firm stance on a complex contractual interpretation point without the necessary understanding, setting the team down a path of non-compliance. Conversely, reluctance to escalate issues – especially early in a project – can deprive the project team of the chance to manage risk early and protect itself under the contract. This reluctance is driven by a desire to not rock the boat, be helpful or solve the problem quietly but the consequences can be significant. 

For example, doing something out of scope early in a project (even once), and not claiming a variation or extension of time can have a compounding impact. There is the direct cost to the business of doing the work at no charge, and significant indirect costs including the obvious one, delay to in scope work (leading to claims from your counterparty) and the less obvious but more impactful one, the creation of an argument that future related instructions are also within scope. This creates an immediate hurdle to future claims made by your team. 

Project leaders need to make it clear that raising issues early is non-negotiable. Creating an environment where escalation is expected and rewarded prevents issues from being concealed until they are harder to manage. Leaders also must be attentive to positional behaviour. When people dig into a view prematurely, especially on matters outside their expertise, the project can drift toward dispute simply because no one wants to lose face. 

Preventing bad habits under delivery pressure

Project culture shifts over time, particularly as the delivery phase becomes busy or difficult. Teams that begin with strong alignment may slowly adopt informal practices or shortcuts that undermine earlier discipline. Behaviours such as bypassing agreed processes, tolerating late reporting, or avoiding difficult conversations often arise gradually rather than suddenly. 

A shift in behaviour between contractual counterparties on the other hand can happen both gradually and suddenly. The stress of delivery pressure impacts everyone differently and leaders must always be alert to the possibility of a positional change from your contracting party. Good will and collaboration between parties can disappear in a moment when a major issue is uncovered. Each party should always be conscious of this risk, and ensure it is consistently taking every precaution to protect itself under the contract in case such an issue arises. 

Onboarding new personnel effectively is a related project hygiene imperative. It is crucial new personnel understand the scope, the key contractual obligations and claims processes, and the project delivery history including the relationship with the counterparty. New team members arriving mid project, and cultural norms need to be made explicit if they are expected to contribute constructively.

Making dispute-prone situations easier to navigate

Even with strong planning and good behaviour, disputes will arise. When they do, how people react under pressure can have more impact than the underlying technical issue. A common escalation pattern is the use of aggressive communication, emails drafted for leverage rather than clarity, adversarial language, or attempts to score points instead of solving problems. This rarely advances resolution; it entrenches positions and raises emotions.

Uncompromising stances are another accelerant. Teams may cling to early interpretations even when evidence indicates a more complex picture. This often includes selective presentation of facts, both externally and internally, which can leave senior leaders with a skewed understanding and reduce their ability to act strategically.

Prematurely initiating formal dispute resolution as a pressure tactic is another common mistake. When the counterparty stands firm, weaknesses in the initiating party’s position are exposed. A tactical threat can quickly become a prolonged, expensive, and reputation damaging process, especially when the contemporaneous record does not support the narrative initially advanced.

Project leaders can mitigate these risks by setting expectations for dispute conduct: objective assessment of the facts, measured communication, and a focus on understanding the underlying issue before adopting a position.

Practical steps for project leaders: A concise checklist

The themes above can be distilled into practical leadership habits:

• Set clear norms for communication, authority, escalation, and documentation.
• Make early escalation mandatory, framed as risk management rather than blame.
• Encourage contemporaneous recording of decisions, directions, events, and assumptions.
• Draw on multidisciplinary perspectives before forming a position.
• Watch for shortcuts and cultural drift as workloads increase.
• Approach disputes objectively, testing the strength of your internal position before escalating externally.

Conclusion

Construction disputes rarely hinge solely on the contract. More often, they emerge from the behaviours, assumptions, and communication patterns that shape day to day delivery. These human factor risks are predictable, and with deliberate leadership they are entirely manageable.

By setting expectations early, reinforcing discipline under pressure, and fostering objective, well informed decision making, project leaders can significantly reduce the likelihood of disputes escalating. The most effective teams are those that recognise the people factor not as a soft issue, but as a core project risk; one that requires the same rigour, attention, and governance as cost, time, and scope. When teams and leaders do this well, they create project environments where challenges are surfaced early, managed proactively, and resolved efficiently.

Drawing on real project experience, Inside Construction Delivery explores the patterns, behaviours, and challenges that shape major construction and infrastructure projects. The series highlights the issues that frequently cause cost escalation and conflict, and offers practical guidance to help teams identify problems early and deliver better outcomes.

Read more from the Inside Construction Delivery series