Alliancing in Australia—No-Litigation Contracts: A Tautology?

Abstract

A project alliance is a business strategy whereby client and commercial participants’ objectives are aligned. This paper takes an alliance project between public and private organizations in Queensland, Australia as a case study and reports the critical factors identified that influence the success of the alliance project. Alliancing is a system that provides a collaborative environment and a framework to adapt behavior to project objectives. It is about sharing resources and experiences, exposing the “hidden” risks. The case study suggests that leadership has a strong influence on the alliance climate. Commitment and action by the Project Alliance Board (and, so, parent organizations) have a strong impact on the team and alliance culture, indicating alliancing has a high chance of failure when there is inadequate support from top management. Like all relational contracting approaches, trust between alliance partners is important. This case study project takes a further step toward reinforcing the trust element by placing a No-Dispute clause in the alliance agreement. A review of the effects of the no-litigation clause upon the project team is presented. The writers conclude that without a positive approach to relationship management, a No-Dispute approach is impossible. Hence, they postulate that a “no-litigation” alliancing contract is essentially tautological, and go on to argue that a no-litigation contract cannot exist without the help of a clear relational vision, that leads to both soft and hard infrastructure to assist in decision making and relationship building.