A decentralized structure to reduce and resolve construction disputes in a hybrid blockchain network

Disputes routinely arise in construction projects, and they have major cost and schedule impacts. Therefore, they need to be either prevented effectively by proper contract and payment execution or resolved efficiently with enhanced resolution processes regarding cost, duration, effort, and transparency. However, current practices are inadequate for both effectiveness and efficiency since they mainly depend on centralized authority. This paper is designed in two folds; first, a generic blockchain-based online dispute resolution platform is tested with two litigation cases collected in 1999 and 2009 to show the need for a construction-focused system. Then, a new construction-specific framework, Decentralized Construction Enabling Transparent Resolution (DCENTR), is proposed to address the unique nature of construction projects. Ultimately, it is shown that dispute likelihood can be minimized through reliable contract and payment execution, and if occurred, construction disputes can be resolved with higher transparency and dramatic savings in effort, time, and cost.

Automated summary

Disputes in construction projects have significant impacts on cost and schedule. Effective prevention and efficient resolution processes are needed. However, current practices relying on centralized authority are inadequate. This paper introduces a blockchain-based online dispute resolution platform and proposes a construction-specific framework (DCENTR) to address the unique nature of construction projects. The results show that reliable contract and payment execution can minimize dispute likelihood and lead to higher transparency and savings in effort, time, and cost.