The role of computer document management systems in construction projects and disputes

Document management systems

Nicholas Lane reviews the role of computer document management systems in construction projects and disputes

Construction projects by their nature invariably demand the creation and dissemination of vast amounts of documents. 50,000 documents for an average size project is not unusual. The use of computers in document management offers efficiency in terms of time, cost and accuracy. In the past, document management has been left to in-house legal departments or lawyers to deal with once a dispute has arisen. An ability to manage documents was largely dependent on a wish and a prayer. However, contractors and employers are increasingly realising the benefits in all sorts of situations of using computers, both as a means of generating, tracking and storing correspondence in the course of projects and as an aid to dispute resolution. Experts, for example, have for some time now been using computers to generate programmes which can be used in the proof of cause and effect in delay disputes, notably in critical path analysis. But with the advent of indexed and relational databases, document and, more fundamentally, information management systems have seen corresponding advances.

The importance of Document Management

The key areas in which document management is important include:

During the Project

• Keeping track of correspondence on a project;
• Recording information relating to a project to which access might become necessary;
• Providing a tool for instance for updating programmes during the life of a project, writing progress reports, making applications for extension of time and loss and expense, and making requests for information and instructions.

Where a Dispute Arises

• The initial assessment of the strength and/or value of a particular dispute by the contractor or employer and his professional advisors;
• The process of putting forward evidence in arbitration (and now adjudication) or discovery in litigation; and
• The selection and presentation of key evidence in the dispute resolution forum itself.

When documents are managed efficiently throughout a project disputes are less likely to arise because of uncertainty about the facts in dispute. Or, if a dispute does arise, it can be resolved more quickly.

What is available on the market?

There is on the market now a bewildering variety of integrated document management systems. These systems can be purchased off the shelf, created by internal IT departments or tailored to clients' needs by external consultancies. Prices vary wildly too - from £50 to £50,000 (and more).

The cost of a system will depend largely on the complexity of the search mechanisms, the overall document capacity and the relative amount of back-up that accompanies it. Although cost may be the primary consideration in choosing a system, other factors, such as the scale of the project in contemplation, the compatibility of the proposed system with other software, the cost of maintenance and service, and "upgradability", can also affect choice. What is important in choosing a system is that the persons likely to need to use it should have a say as to their personal requirements. Obviously, any new system necessitates a certain amount of investment, but the experience of those acquainted with the benefits of good document management systems is that such investment is usually well repaid.

Certain reservations about computer document management systems are voiced by some, primarily because it is still the case that many documents are stored on paper as opposed to electronically. However, scanning products which use OCR (Optical Character Recognition) recognition facilities coupled with OLE (Optical Linking and Embedding) linking together enabling paper documents to be "translated" into electronic documents, have improved vastly in recent years. A scanner (not, perhaps, of the heavy duty sort, but workable on smaller projects) can be purchased for less than £100. Where the documents are in a straightforward format, a secretary can input as many as 400 pages of information each day. It is therefore becoming increasingly cheap and easy to set up and maintain electronic information retrieval systems.

What will the Document Management System do?

Once, perhaps with the aid of secretaries or paralegals, a system is in place, 50,000 documents (in some cases more) can with ease:-

• be recorded (without recourse to paper)
• stored (for example, on a single 650 mega byte CD-ROM as many as 10,000 pages can be stored)
• and searched (by text, date, creator, recipient, and by means of word searches, fuzzy text searches or through systems using codification)

It is not necessarily only the larger project which will benefit from the use of such a system, particularly if the ultimate objective is the management of complex information. Smaller projects can benefit too, especially those which involve complex information. However, in general it makes less sense to go for an elaborate document management system the fewer the documents a project is likely to generate.

So, is what we are talking about the much admired, but rarely seen "paperless office"? To some extent yes, but it must always be possible to create an audit trail back to the originals of paper documents (located in the dusty store room at the end of the corridor), because recourse to originals, for instance in the process of discovery, is essential.

Access to Information

Where a document management system is used on either an inter or intranet network, documents can be whizzed around in cyberspace, making them accessible to anyone at any time in any place (the "Martini" phenomenon). Clients and their professional teams can all access, if allowed, the information they want when they want it. Through the use of E-mail, documents stored on a database are mailed instantaneously to any site, contract administrator's office, law firm, or adjudicator anywhere in the world. Also, with the enhanced memory capacities of modern day laptops the information on a moderate sized database can be downloaded onto a laptop and accessed anywhere. Ultimately, such technology will be used in courts and that will entail all litigants and litigators getting "wired up".

Specific Construction Applications

In the light of the rediscovered primacy of the as-built record in retrospective delay analysis the availability of an efficient document management system with a powerful search mechanism on complicated construction projects is the only sure fire means of establishing that record. Where contractors and employers have had access to and used such a system during the course of the project itself the benefits will be even more tangible.

Another area in which computerised document management systems will help greatly is in adjudication to which, under the Housing Grants, Construction and Regeneration Act 1996, most "construction" contracts entered into after 1 May 1998 are subject, as the first port of call, to dispute resolution. Section 108(2)(c) of the Act requires the adjudicator to come to a decision within 28 days of a dispute being referred to him.

Given the number of documents potentially involved and the tight timetable, the facilities offered by such systems, particularly where the project has been document managed by computer throughout, will offer parties the best chance of putting forward the best case in the available time.