Legal Issues of ICT Use in the Construction Industry
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While in the 21st century the construction industry prefers to conduct business using the information and communication technologies (I&CT), the presence of legal issues pertaining to this mannerism of business cannot be ignored. The aim of this project is to provide a better understanding of these legal issues which are associated with their use. The objectives entailed to achieve this aim are to determine the existing legal issues and to estimate the awareness about them in the industry. The aim and objectives have been addressed by conducting two types of field investigations namely, questionnaires and interviews with lawyers, architects and engineers with different backgrounds. The project concludes with the identification of the legal issues present in the industry and an attempted comparison between the legal scenario in the U.K. and India.
1.1 Background and Scope of the Research
Almost a decade ago the information technology invaded our lives like never before. The advancement in information and communication technologies (I&CT) and their utilisation has been tremendous with the recent years witnessing the development of several IT-based technologies such as e-commerce.
Information technology solutions have paved a way to a new world of internet, business networking and e-banking, budding as a solution to reduce costs, change the sophisticated economic affairs to an easier, speedy, efficient, and time-saving method of transactions and exchange of information.
Though the internet has emerged as a boon for the present pace of life yet at the same time it has also resulted in posing various threats to the consumers and other institutions for which it has till now proven to be the most beneficial. Various criminals have been able to pave their way to interfere with the internet accounts through various techniques like hacking the Domain Name Server (DNS), Internet Provider's (IP) address, spoofing, phishing, internet phishing etc. and have been successful in gaining an unauthorised access to the users' computer system thereby gaining enormous profits from the stolen data.
These and other problems have forced the business community, the legal community and the law enforcers i.e. the government to look at the current legal scenario.
These problems, therefore, need to be studied in detail by investigating legal issues pertaining to the construction industry. This study is an attempt at understanding the legalities which are related to the mannerism of conducting business while using I&CT. As part of this study an effort will be directed towards comparing the legal stance of the United Kingdom and India.
1.2 Aim and Objectives
The aim of this project is to provide a better understanding of the legal issues involved while using information and communication technologies (I&CT) in the construction industry.
To achieve this aim, the following objectives should be fulfilled during the course of this project:-
- To study the legal issues pertaining to e-commerce (for e.g. electronic contracts, digital signatures, etc.).
- To assess the importance of jurisdiction issues in cyberspace (for e.g. engaging in e-commerce on World Wide Web may expose the company to the risk of being sued in any state or foreign country; law applicable to contractual obligations, etc.)
- To study the various legal problems that can arise out of miscommunication between the client, consultants and contractors (court actions, out-of-court settlements of disputes, etc.)
- To study and compare the legal stance of India and the United Kingdom, in using the information and communication technologies in the construction industry.
1.3 Justification for the Research
Computers and more importantly internet governs our lives to the kind of extent that we do not even realise its significance. Today companies, especially in the concerned area of construction, are conducting business by means of the latest advancements in information & communication technologies.
Bearing in mind the current flourishing e-commerce, it becomes quite easy to get embroiled in lawsuits. The reasons maybe several, for instance either there may be disputes between the client and the company; or there might be an issue with jurisdiction; or there may be concerns related to the security of level of exchange of information electronically. In most of the cases it can be assumed that there is a highlighted ignorance of the legal framework with respect to I&CT, and this ignorance may be a deterrent in the popularity of conducting business in this manner.
In lieu of these issues, I believe it becomes the need of the hour to undertake a study of this kind.
1.4 Methodology Outline
Owing to the nature of the research project and its data, the research approach adopted is mostly quantitative. However, some aspects of qualitative research have also been incorporated. Source of information will be taken from journals and books.
The method of collecting data for this research project has consisted of online questionnaires (surveys) and unstructured interviews. Case studies of previous lawsuits with respect to the topic have been studied.
1.5 Dissertation Contents
The research project includes a detailed study into the methodology to be followed and also provides the justifications for the chosen methodology.
The project also includes a literature review about the various legal issues which are related to the use of information & communication technologies for conducting business in the construction industry. It sheds light on the some of the legal terms associated with the legal framework of e-business.
The project report additionally contains with analysis and evaluation from the interviews conducted and the online questionnaire filled in by architects, engineers and lawyers.
It supplies information on the “legal future” of using the various existing and upcoming information & communication technologies in construction, providing an insight into the implications; the solutions available; the problems faced while conducting research; and manner in which I&CT can be utilised for the growth of the construction industry worldwide. It concludes with summarisation of the research and recommendations and scope for further study on this research subject in the construction industry.
2. LITERATURE REVIEW
The intentional use of information technology by cyber-terrorists or cyber-criminals for producing destructive and harmful effects to tangible and intangible property of others is addressed as ‘cyber crime'. Cyber crime is clearly an international problem with absolutely no national boundaries; hacking attacks can be launched from any corner of the world without even an iota of fear of being traced or prosecuted easily. A cyber-terrorist can collapse the economic structure of a country from a place where that country might not even have arrangements such as an extradition treaty to deal with that criminal. The only safeguards can be better technology; to combat such technology which is already well-known to the hackers; and to evolve stricter and tighter laws which can be accepted universally.
2.1.1 An introduction to the construction industry
A maxim in India states, to live a comfortable life all one needs is three basic essentials- food, clothes and a house. This has held true across all civilisations and centuries. Building a house was just a first step. The world has advanced much further constructing palaces, forts, dams, skyscrapers, factories, energy-efficient buildings and lots more.
In a world of today, the 21st century, the construction industry is an important sector of a nation's economy; providing employment to millions; employed by countries across the world as an economy regulator! In U.K. alone, construction industry had an output of £102.4 billion at current prices (2004); 8% of Gross Domestic Product (G.D.P.). In the European Union the construction sector accounts for 9.9% of G.D.P. and 50% of Gross Fixed Capital Formation (GFCF).
Considering the scope and importance which the construction sector enjoys worldwide, it becomes quite easy to understand that this industry functions at an incredible level and involves working with many organisations.
“The construction industry is frequently described as fragmented by its critics; however, disseminated would be a better description .For each construction project a whole new organization is created involving the client, designers, contractors, sub-contractors, material suppliers, plant hire companies, government, local authorities and agencies such as the environmental agency, Health and Safety Executive and many others. Each ‘new' and ‘transient' project organization is, in fact, a virtual organization or enterprise” (McCaffer, 2008).
Communication, thus, becomes an important aspect of conducting a successful business in construction ensuring successful collaboration between the various components of the industry.
2.1.2 An introduction to e-business/e-commerce and e-construction
With age & time the concept and means of communication have also evolved. Earlier communication meant travelling to places near and far, then the concept of letters came and with the advent of telephone postage lost some of its significance. The world was however still is in store for more inventions and the 1940's took the world by storm as the computers were born.
Computers and internet are a lethal combination, a form of communication which rules over our lives as much as eating food does. Every day, man makes new discoveries regarding these two, trying to find out how our day-to-day activities can be undertaken in an improved & efficient manner.
The term ‘electronic commerce' (e-commerce) was coined by Lawrence Livermore in 1989. E-commerce is a consolidation of people, technology, materials and “the processes on an electronic network for commercial transactions” (Johnston et al, 1997, p 37).
As specified by the European Commission (1997, cited in Bruin, 2002), electronic commerce is all about doing business electronically involving the electronic processing and transmission of data (which consists of data, text, sound and videos). It encompasses various activities consisting of electronic trading of goods and services, electronic share trading, on-line delivery of digital content, on-line sourcing, electronic fund transfers, direct consumer marketing, electronic bills of lading, commercial auctions, collaborative design and engineering, public procurement, and after-sales service (European Commission, 1997).
To be speaking strictly it's not really the electronic aspect of e-commerce but the digital part which imparts the revolutionary, efficient and versatile character to e-commerce (Johnston et al, 1997).
E-commerce involves both the services; e.g. financial, information and legal services); and the products; e.g. consumer goods, specialised mechanical equipment. It also constitutes the combination of traditional activities such as education and healthcare and new activities such as virtual malls (European Commission, 1997). This is also agreed with by Johnston et al, 1997 who state that e-commerce supports the selling, buying and distribution of services and goods.
Johnston et al (1997) while discussing the definition of electronic commerce noted that it involves the conduction of business electronically across the spectrum of inter-enterprise relationships.
E-commerce has the advantages of being a paperless economy, engaging in outsourcing and entails the convergence of all information in a single form (Johnston et al, 1997).
In this day and age e-business has emerged as a field of immense potential. The use of information and communication technologies to conduct business has gained momentum, and, like just about any other business the construction industry too has embraced the concept of e-business.
“Strong information technology (IT) capabilities have been a competitive necessity in nearly every industry sector. The post-Latham (1994 and Egan (1998) era has seen many construction firms investing in technology tools to improve business performance, which subsequently led to an increase in technology investments in construction firms” (Ruikar et al., 2008, p 23).
The use of information and communication technologies in construction, however, depends upon a number of factors such as the size of the construction firm, its position in the market, the markets that the company operates in etc.
2.1.3 Introduction to the legal problems in e-business
Before jumpstarting onto the e-business wagon, a company should have some reasonably placed apprehensions. The question in front of the management of a company should be: whether conducting business using information and communication technologies is legally safe or not? Other questions should follow as well, such as: what is an e-contract? will the company's information be secure when shared through I&CT? what are the liability issues? what are the jurisdiction issues? is a scanned document valid and legal? what is a digital signature, an e-signature?
Questions such as above are justified because in actuality the companies are unaware of the legal risks involved while conducting e-business, hampering the chances of fruitful commerce.
Sieber (2001) brings to light the need for new laws when he says that the increased significance of information and information technology is closely linked to increased potential dangers, and these dangers bring an increased necessity to reassess the existing information law regulations and to formulate new ones.
Sieber (2001, p8) further makes this statement to back up the formulation of new information law regulations, “It must encourage- in the interest of communal justice (iustitia commutativa) and as a contribution to distributive justice (iustitia distributia)-the creation of new “information” values (e.g. by means of economic incentives in copyright law), ensure a just distribution of the newly created goods (e.g. through the regulation of rights to particular information), reduce the number of new risks stemming from information technology (in particular, by provisions in the area of liability, administrative law and criminal law)and ensure a just compensation in cases where harm is caused”.
Exchange of information in construction and engineering based businesses is a universal occurrence but it is not accounted for by contractual practice. Insufficiently defined responsibilities, overlapping communication techniques and mistrust all hamper the fuller use of inter-enterprise I&CT (Hassan et al).
A major problem exists with the enforcement of electronic law. Particularly practical difficulties arise from the fact that data containing most of the information is available at the discretion of the recipient. As is the case electronic data is not actually visible and can be altered, deleted or hidden through manipulation of technology (Sieber, 2001). Data can also be encoded or encrypted by offenders to escape imprisonment. Several terrorist, bank robbers, paedophiles, etc have attempted to escape or have been able to escape by encrypting data. Encrypted data is data which has been converted into incomprehensible codes which can only be unlocked by using a key which only a holder of that matching key can reconvert them into plausible data.
All in all there is clearly an urgent need to study and understand the legal issues involved while using information and communication technologies for conducting business.
2.2 Legal Aspects of using I&CT
When the concept of e-commerce as introduced it was greeted with hysteria which has now been replaced by a concern voiced by many over the impact of using I&CT for business. The industry is now closely examining the after-effects of e-business business world (Ismail and Kamat, 2008).
Hurtado and O'Connor Jr (2009) deliberate on the contractual issues concerned with the use of construction Building Information Modeling. They explain that the legal community is struggling to help out in developing meaningful contract terms in relation to the use of BIM technology. In their paper for the Society of Construction Law, they have contemplated upon the issues to be considered when preparing contractual provisions, including the proposed use of the model; the mannerism of data transfer from one model into the other models; the deliverance schedule expected from the model; reliability of the modelled information; management of the modelling process; and usage of the model after the completion of construction.
Some of the legal issues and terminology pertaining to the use of I&CT for business purposes shall now be discussed.
2.2.1 Types of legal risks involved in e-business in construction
Every new day is coloured with a new discovery; this holds as much truth for I&CT as for any scientific discovery. The only drawback with I&CT is that a new discovery brings along with it a new set of legal issues. These legal issues are a drawback because they take time for implementation and regulation; sometimes damage has already been done before any sufficient action can be taken.
Ismail and Kamat (2008, p-212) correctly state, “The difference between the rates at which e-business technology develops to the rate at which legal framework and rules develop is substantial. Legal risks have not been studied in relation to construction e-business”.
The legal risks discussed include risks posed by web-based agencies, risks related to jurisdiction; contract formation; authentication; electronic privacy and risks associated with intellectual property. These legal risks inflicting e-construction have been discussed as below:
• Insecurity regarding electronic privacy
In the digital economy privacy claims have been of paramount concern. An issue forever causing concern amongst the construction and business community is the insecurity of their personal and private information which is exchanged and stored electronically.
A popular, efficient and inexpensive means of information exchange and data transfer is the electronic mail systems, popularly known e-mails. While emails now incorporate information in various forms which includes photographs, typed memos, video clips, spreadsheets and bar codes; they are deemed to be as insecure as a postcard if they are not protected by encryption and elaborate password systems (Johnston et al, 1997).
Construction companies involved in e-business will need to manage the risks associated with sharing private information; private information may refer to personal privacy concerns about their own firms (Ismail and Kamat, 2008, p214-215). “Online portals and marketplaces collect more information than is needed for legally authentically an e-contracting party” (Smith and Clarke, 2000).
The information thus collected may be in the form of registration forms, cookies, etc. Though the question remains as to who owns this information, the risk associated is with the privacy being challenged. In case of hacking or a virus, the information may end up being passed onto a third party.
• Risk posed by the web-based agents
Web-based agents are information brokers. A new brokerage model can substantially change the equilibrium and re-adjust the interests of existing stakeholders. Also, software agents pose the biggest and truly exclusive risk to the current legal system as pointed out by Ismail and Kamat (2008).
Agents control decisions and they learn and act upon their perception of the environment to make the maximum goals of its user or programmer (Dzeng and Lin, 2004; Lee, 2004; Ren and Anumba, 2004). Agents act on behalf of their owners to promote the owner's desires, unlike support software that supports the owner in making a decision but leave the decision for the owner to make (Schoop et al., 2003; Ren and Anumba, 2004).
• Risks related to electronic authentication
When doing business via the electronic networks, it become increasingly difficult to establish the other party's trustworthiness without having physically met them, in other words doubts about authenticity are raised (Bruin, 2002).
Smith & Clarke (2000 cited in Ismail & Kamat, 2008, p 216) debate authentication by stating, “The drive to authenticate e-business buyers and sellers and attribute contracting actions to the proper buyer and seller is in direct conflict with privacy laws”. Pacini et al (2002, quoted in Ismail and Kamat, 2008, p 216) support this statement when they say, “Attributing an electronic message for an offer or acceptance of an e-contract to the person who purports to send it is yet another risk”.
The Uniform Electronic Transaction Act (UETA) addresses this risk from a legal perspective by making it necessary that certain authentication levels are acquired and thus proper authentication and attribution is ensured and a protection is provided to the e-business participants from the attack of hackers (Belgum, 1999; Moreau, 1999; Thelen Reid & Priest LLP, 1999a; Pacini et al., 2002, cited in Ismail and Kamat, 2008).
• Risks inflicting electronic contracts
Consider this scenario. Two parties engage in a negotiation for the purchase of cement for the construction of an institutional building. The seller offers it at say £5 per kg and the buyer refuses and wants to buy it at say £4 per kg and also wants the seller to bear the shipping cost. The seller agrees, transaction is completed, cement is shipped and the buyer transfers money into the seller's account. This sounds like a simple business contract; however, the difference here is that this contract has been formulated and fulfilled electronically (Johnston et al, 1997).
In a commercial context, promises are exchanged in the form of an offer and an acceptance of the order. The offer and the acceptance supported with a valid consideration and mutual assent would, subject to certain limitations, constitute a valid contract.
Electronic Data Interchange (EDI) technology is an advanced form of cyber-contracting. EDI is conducted between trading partners who already have a negotiated agreement which rules the relationship. In this form of technology, the computers contact each other as well as negotiate (based on programmed instructions). If a reply which rejects the offer is received then a counter-offer is also made. This continues till an agreement is arrived at or one of the system stops the process (Johnston et al, 1997).
However, in the e-business transactions, it is not an easy job to distinguish between the offer make and the acceptor. This is considered critical because a contract is considered to be invalid until an offer has been made and the acceptor has accepted the offer and communicated the same to the offer maker (Ismail and Kamat, 2008, p 213).
Although the laws governing electronic contracts have improved significantly over the year, yet there is always scope for improvement because of the ever changing evolving nature of the communication technologies. Business risk and uncertainty are always on a high level in the electronic world. Legal difficulties in an e-contract arise when the parties' expectations are not met with or when a transaction does not progress as planned.
Bruin (2002, p 146) shed some light on TrustUK and explained that, “......in July 1999, the Department of Trade and Industry published its Consumer White Paper Modern markets: Confident consumers........The White paper among other things contained plans for the approval of on-line codes of conduct by a new body provisionally called TrustUK”.
Section 4 of TrustUK Code of Practice deals with the various aspects of e-contracts and its implications (liabilities included).
• Risks related to varying jurisdictions
Jurisdiction is a legal term describing which law is in effect at a given period of time and which court's decisions will be legally binding. Jurisdiction issues arise when parties dispute over a contract and want to settle as to which jurisdiction will decide over the issue (Ismail and Kamat, 2008).
The problem becomes more intimidating where the issue of e-commerce comes into picture. The internet simplifies the carrying out of business globally. But then different countries follow different laws, especially those with respect to construction and therefore, the risk of encountering lawsuits in foreign land increases.
In an electronic contract it should be very clear as to what law applies to the contractual obligations, what court of law will be presiding over to judge any dispute arising from the contract (Bruin, 2002).
As pointed out by Rowe (1998, cited in Ismail and Kamat, 2008) a dispute judged under varying set of regulations, laws and rules have as different judgement. “Although the laws regulating e-business vary, the general opinion of the courts implies that companies engaged in activities or online advertising may have to defend lawsuits in different jurisdictions if those activities violate the local laws”, Thelen & Priest (1997 quoted in Ismail and Kamat, 2008, 213).
The problem of jurisdiction exists becomes all the more relevant in the 21st century, now that there are so many countries existing worldwide and when global expansion has occurred in the business scenario with the arrival and explicit use of the information and communication technologies. However, there are quite a lot of countries which are at the moment unable to make any kind amendments in their legal framework on construction, especially where the amendments in law are concerned with e-construction. At the same time, it is good news that some governments are making changes to the construction law executed in their countries to make e-construction and e-business a more feasible and legally secure venture.
However, the point to be noted here is that despite all the positive proceedings in the respective field, the possibility of two countries sharing the same law on e-commerce and that too in the construction sector are negligible. In a scenario where the choice of law is absent, legal uncertainty may arise regarding the application of law to an electronic contract (Bruin, 2002). This information clearly implies that risk attributed to varying jurisdiction remains.
Bruin (2002, p42) clearly points out that in a specific case of “cross-border electronic consumer contracts, a court procedure may involve such difficulties that a contract term defining a foreign jurisdiction may de facto exclude or hinder the consumer to take legal action......”. As a result the service provider also ends up providing an unfair contractual term.
From the literature on jurisdiction which has been studied and mentioned here, it has been found that although there are quite a lot of provisions in legal frameworks of countries which address the jurisdiction issues, yet it would be beneficial to make changes and improvisations to these existing laws.
2 Brief description of some of the legal terms associated with the legal framework of e-business
To understand the legalities involved in using information and communication technologies for business, one needs to be aware of some terms associated with the legal framework of e-business. In this section these common yet important terms shall be discussed briefly.
Identification of the potential legal gaps and problems within the cluster projects - issue 2, a report on the findings of Hassan et al, forms the main basis for defining these terms.
The discussed terms are as follows:-
• Electronic / digital signatures
Electronic and digital signatures allow the recipient of a piece of information to know when the information has arrived, who has sent it, and to check whether the information has been changed or tampered with since it was sent.
Digital signatures are electronic codes specific to individual users, which can be used to identify the originator of a message or file, and to indicate approval of the transmitted information. There are different types of digital signatures available (i.e. public key infrastructure, asymmetric cryptography, account numbers and passwords), and the level of security that is required dictates the choice of method to be used. Digital signatures are easily to transport and all the more difficult to imitate by anyone else, and more importantly they can be automatically time-stamped. A digital signature is basically a unique ‘key' that provides, if anything, stronger authentication than any written signature (Wacks, 2001).
Asymmetric cryptosystem involves two keys, one public, the other private. Its main advantage is that if you are able to decrypt the message, you know that it could only have been created by the sender (Wacks, 2001)
The Electronic Transaction Act 1999 (in Australia) gives legal recognition to the use of electronic signatures and one may find them useful in executing electronic contracts on your website. The risk of e-businesses dealing with parties which might misuse digital signatures is similar to the commercial risk of fraud that arises through forgery of signature on a paper contract.
• Here is an example which depicts the working of a digital signature. Assume that man named A has to the draft of a contract to his lawyer who at present is in another town. A wants to assure his lawyer that the information sent across has not been tampered with and it really is what he had sent. To ensure that, here's what A has do:
• Copy-and-paste the contract into an e-mail.
• Using specialised software, A obtains a message hash (mathematical summary) of the contract.
• A then uses a private key that he had previously obtained from a public-private key authority to encrypt the hash.
• This encrypted hash becomes A's digital signature of the message. It is to be noted that the digital signature will be different each time a message has been sent.
Now, how will A's lawyer detect that this document is the same unchanged one that A had sent across to him? Here's what he will do:
• A's lawyer makes a hash of the received email to ensure that the document is intact and has been sent by A only.
• A's lawyer then makes use of A's public key to decrypt the message hash or summary.
• The received email (document in this case) is considered authentic and valid if the hashes match.
Thus we understand that using a digital signature is an easy and safe method to protect privacy of information.
A digital signature consists of the concerned person's public key, his/her name and e-mail address, the expiry date of the public key, name of the company, serial number of the digital ID, and digital signature of the certification authority (Magalhaes, 2003).
The fact that digital signature increase the security and ensure privacy is confirmed by Wacks (2001, p 80) when he states, “Blinding or blind and digital signature will significantly enhance the protection of privacy”.
• Digital notaries
Digital notaries provide a time stamping service, thereby proving the existence of a piece of information at a particular time. These are often used in conjunction with an electronic / digital signature. Timestamping can ensure non-repudiation. Indeed, a digital signature is only legally binding if it was made when the user's certificate was still valid, and a timestamp on a signature can prove this. Timestamping involves the following parties -client, timestamping authority (TSA) & a verifier.
Feather in 1999 expressed his opinion on digital notaries. He articulated that the purpose of a digital notary is to certify that a document as produced by a person is a true copy of that document and that the notary has cross-checked that the person is who they claim to be. “The only significant difference is that an electronic signature, once certified, can be securely attached to any document without the notary needing to see the process taking place. I do not disagree with the idea of a licensing process to ensure that such digital notaries are competent and also carry appropriate liability, but I do not see it as essential and it should be possible for any person to provide such a service without needing a licence”, concludes Feather (1999) in his paper.
• ICT contracts
Information and communication contracts describe usage of information and communication technologies and detail the supporting environment. All parties involved in a project must comply with the ICT contract to enable the effective use of the information and communication technologies.
• ASP contracts
ASP contracts are signed between an ASP and a client; and the ASP and other stakeholders involved within a project. The ASP sets up and manages services on behalf of the client, providing facilities and functionality for all project participants.
Shelbourn et al (2003) elaborating on this concept state that the contract can be formulated between the two electronically since the ASP has the requisite software. Negotiating virtually, the project stakeholders can, either accept & digitally sign the contract, or they can suggest amendments to formulate a new contract. “If for any reason whatsoever the email and attached contract document have not been digitally signed, then the ASP's transaction monitor will not allow the new contract to be posted to the room”, Shelbourn et al (2003) further clarify.
Each stakeholder is issued with an ‘end-user license' based upon their respective level of trust. This license determines the extent to which the stakeholders have rights to use ASP services (Shelbourn et al, 2003).
• End-user licences
End-user licenses are determined by the ASP based upon the respective trust level of the end users as determined by the ASP. An end-user license will normally include information on the method of granting access to services, IPR conditions, permitted use of the ASP's services by the end users, training for users, IPR and confidentiality conditions, and limits on liability (Shelbourn et al, 2003).
• IPR issues of information
Intellectual property is an area of law that is drawing maximum attention from the cyberspace. IP is the legal protection governing works which are a result of creative work processes (Johnston et al, 1997). Examples of IP are inclusive of patents, trade secrets, copyrights, etc.
The term IPR denotes Intellectual Property Rights and describes the rights to information contained within the project for the different stakeholders who are involved within the project. Many different levels of rights to access will exist that must be managed by the ICT contained within the project.
Trade secrets are used to protect valuable information and virtually any kind of information can be guarded as a trade secret. It enforces rights indefinitely, meaning that the rights are to be exercised as long as the information remains a secret (Bone, 2001).
However, there are legal limitations to the extent to which trade secret law is exercised. As described by Bone (2001), the two most important limitations on trade secret law are namely: the rule that allows reverse engineering and independent discovery; and the rule that excludes protection for ‘general knowledge and skill'.
Only wrongful means of appropriation are not given any rights under trade secret law, and neither independent discovery nor reverse engineering is considered to be wrongful enough.
An employee is permitted to use the general knowledge and skill that he has acquired at work even if it is at the expense of the employer.
Copyright is the set of rules which govern the right to copy a piece of work (Johnston et al, 1997). However, some interventions by regulations may be required as s second-degree enforcement control (Elkin-Koren & Salzberger, cited in Koren, 2001).
• AEC objects
The increased use of ‘object' technology within construction projects has raised a number of legal and contractual issues. These issues comprise of management of these objects, ownership issues, change of rights, and accessibility of these objects Shelbourn et al, 2003).
• Legal infrastructure
The legal and contractual issues highlighted in this literature review bring to front the actuality of the situation. Clearly there is a need for a legal infrastructure which will be used for framing regulations and laws to counter the risks associated with information and communication technologies.
Today nearly 60 billion e-mails are sent every day, and this figure is increasing with each passing day! Although half of these are unwanted spam, the rest are a mixture of formal & informal writings, all sent for different reasons and with different motives. In a business context, all e-mails, and any & all electronic records that somehow are a part of business activity, are a permanent record of events (Baillieu, 2008).
Recent changes and developments in law means that in 21st century's electronic and digital age, e-disclosure opens up all forms of electronic media and makes it available for scrutiny by the courts (Baillieu, 2008). This further has an impact in the sense that now, more than ever before, business managers need to focus on the management of their data and the access to that data (Baillieu, 2008).
Where earlier typed & handwritten letters were the norm, now documents created on PCs and laptops are considered to be the easiest form of storing and communicating information. More and more PC users are evolving into prolific writers. “As a result more documentary evidence exists today than ever before, albeit only in electronically stored formats”, as stated by Trevelyan (2009).
This new method of storing data implies that law firms have to deal with and understand a totally new way of conducting the disclosure process (Trevelyan, 2009). E-disclosure is a process of restoring, searching, capturing, manipulating and collecting electronic documents as a part of the system of disclosure in civil litigation. To put it in simpler words; electronic disclosure or e-disclosure is now the norm (Trevelyan, 2009).
Baillieu (2008) explains that in court proceedings in England, “.....the duty of disclosure even applies to documents that no longer exist, privileged and confidential documents, and documents found or which come into existence during the court proceedings”.
In case of disputes litigation support software tools are employed to search and dissect the databases including erased e-mails, discarded and hidden data, so that the foot-print is always there to be found (Baillieu, 2008). Trevelyan (2009) shares her opinion on the kind of technology available to tackle the multitude of information which is made available through e-disclosers. According to her, there is technology available to help search & sift through electronic information electronically, and this technology includes software which allows for automated categorisation and clustering, and near-duplicate finding, conceptual and contextual searches, and email threading. Computer forensics experts are trained to break down encryption codes & passwords, and, also to investigate & analyse data for reproducing time critical events (Baillieu, 2008).
However, due to the amount of effort, time and money involved e-disclosure is not very popular amongst lawyers.
An extranet is essentially defined as a private network that uses internet protocols, public telecommunications and network connectivity to share data in a secure manner with partners, customers, vendors, and suppliers.
Ruikar et al (2005) have mentioned that project extranets have opened a new avenue of communication and collaboration during a construction project. They have further discussed the effect of web-based tools (such as project extranets) which are being made use of to manage construction projects.
Tools such as project extranets can be utilised to control, manipulate and store information on the project and also make it available to all participants of the construction supply chain (Alshawi and Ingirige, 2002, cited in Ruikar et al, 2005).
ITCBP Intelligence (2002, cited in Ruikar et al, 2005) lists some of the examples of web-based tools, namely: computer-mediated tendering system for services or contracts; purchase of materials electronically; project extranets for project management; and marketing of products online by a manufacturer.
An interesting point to note here is that the founder members of the UK vendors' trade association did not like the usage of the term extranets in construction and in 2003 changed it to Network for Collaborative Technology Providers (Wilkinson, 2008).
To summarise this section, the common terms and risks associated with the legal issues plaguing information and communication technologies, have been defined and discussed in a brief manner. The idea is to acquaint the reader with the terminology to be used as well as introduce him/her to the legalities which are a part and parcel of using ICT for conducting e-construction.
McCaffer (2008) states very categorically that e-business offers quite a lot to the construction industry; the reason being that it questions the issues which a scattered industry had to address, such as distributed collaboration, electronic sourcing and purchasing of products & services, requirement of an improved efficiency and delivery of products on time.
The flaws in the legal systems have further been strengthened by Johnston et al (1997) who say that law, being conservative as it is, has lagged in responding to the changes brought on by information and communication technologies.
One might question the inclusion of statements made nearly a decade ago. Well, the argument is that even after almost 10 years the scenario has not changed much.
The whole idea behind undertaking this literature review was to find out about the manner of research work undertaken regarding this field. Whether it was by referring books, e-journals or the internet, the data found may be considered substantial, although a need was felt to further understand the legal issues concerned with ICT and their affect on conducting daily business.
While referring to the book titled e-Business in Construction edited by Chimay J. Anumba and Kirti Ruikar, it was found that it touched a lot of topics, throwing light on the e-Business aspects of Construction as well as the legalities associated with it.
However, more relevant information was garnered from the results of Identification of the potential legal gaps and problems within the cluster projects - issue 2, a paper on the findings of Hassan Tarek et al. The cluster projects mentioned in the title of this paper were European Union funded research projects addressing information and communication technologies (I&CT) in construction and the idea was to analyse them and identify the legal issues. This paper shows that there is a commercial product available for the use of electronic signatures, ICT contracts, or ASP contracts directly from the projects studied in this exercise.
The number of projects that carried out research into each of the legal and contractual issues differed significantly. For example the area of legal AEC objects although researched by all projects, does not have commercially available tools to use to overcome the legal barriers to the wider uptake of AEC objects [ICCI 2003]. However, it should be noted that even though there are commercial products available for all of the legal and contractual issues researched, the development of a complete legal framework to enable the use of ICT on construction projects has yet to be fully realised.
While undertaking the research on this topic, it was surprising to note that very little published material is available on the relevant topic. The facts established almost a decade ago have only been further strengthened, and there is still more scope for studies and research works to be taken up.
To conclude, one common factor that was arrived upon after the literature review was the problem of ignorance regarding the legal framework of using e-business tools. It was realised that there is a scope for more study in this field.
3. RESEARCH METHODOLOGY
The nature of variables and data which shall be analysed determines the design of a research strategy. The two types of research strategies are qualitative research and quantitative research. Their applicability depends on the purpose of the study and the type and availability of the information that is required (Naoum, 1998).
Naoum (2002) has stated that research design is similar to an action plan which can be used to getting from ‘here' to ‘there', wherein he defines ‘here' as the initial set of questions, and ‘there' he defines as a set of conclusions or answers received for these questions. In general, qualitative research implies a study of a subject without any prior formulation of the problem. Qualitative research involves data collection such that the theories and hypothesis will emerge (Fellows and Liu, 2003).
On the other hand, quantitative research is objective in nature and the data is firm and reliable (Naoum, 2002). In addition, quantitative research is based on testing a hypothesis through a number of measurement and logical measures (Naoum, 2002).
However, neither of the two methods described above are exclusive from each other. Triangulation is a third approach, which combines the two research methods. This approach is very powerful as it assists in making interferences and conclusions (Fellows and Liu, 2003).
Quantitative research is driven by the researchers' viewpoints, while qualitative research underlines the perception of the subjective (Uwe Flick, 2006).
It becomes highly relevant to understand the difference between the terms methods and methodology. According to Blaxter et al. (2001), a method is associated with the tools used to gather data while methodology is referred to the approach that underpins the research. In simpler words, methods are a part of methodology.
This chapter will explain and analyses the different types of research methodology. The aim is to analyse the different research methodologies and choose a suitable research method which shall be adopted for this research project.
3.1 Quantitative Research
Creswell (1994, quoted in Naoum, 2002, p 38) defines quantitative research as, “.......an inquiry into a social or human problem, based on testing a hypothesis or a theory composed of variables, measured with numbers, and analysed with statistical procedures, in order to determine whether the hypothesis or the theory hold true”.
A survey depicts quantitative research through the data collection of asking questions to people. Quantitative research is of two types: Objective measurement and Placement of theory (Naoum, 2002).
3.2 Qualitative Research
Qualitative research is more subjective in nature as compared to quantitative research (Naoum, 2002). It lays more stress on descriptions, meanings and experiences.
“Qualitative research is a lot about producing and analysing texts, such as transcripts of interviews or field notes and other analytical materials” (Uwe Flick, 2006).
The crucial features of qualitative research are the accurate choice of suitable methods and theories; the identification and analysis of various perspectives; the researchers' reflections on their research as part of the process of knowledge production; and the variety of approaches and methods (Uwe Flick, 2006).
Information collected in the qualitative research is classified under two categories: exploratory research and attitudinal research (Naoum, 2002).
The term exploratory research is used when the researcher has inadequate amount of knowledge on the topic (Naoum, 2002). The objectives of this type of research are to make a judgment of the situation, to screen the alternatives available and to discover new ideas (Naoum, 2002).
Attitudinal research is used to evaluate the perception of a specific group towards an issue (Naoum, 2002). This category of research is conducted through a structured survey where the questions are adjusted with the attitude of the person towards a particular topic.
Triangulation refers to the combination of two approaches to carry out research. As triangulation employs the work of two or more techniques, both qualitative and quantitative research methods may be used. This will allow these two approaches to overcome their individual disadvantages and capitalize on each other's advantages.
Triangulation has been divided into the following categories according to Easterby-Smith et al (2002):
• Theoretical triangulation
This involves the borrowing of models from one discipline and using them to explain the situations encountered in another discipline.
• Data triangulation
It is defined as the research method where different people collect data on the same situation, and then the results are compared.
• Methodological triangulation
This category uses both quantitative as well as qualitative methods of data collection such as questionnaire, interviews, telephone survey and filed study.
Triangulation has its own share of problems. Yin (2003) observed that there may be problems in implementing triangulation methods in any research. First of all the issue is with the expenses wherein the collection of data from multiple sources can turn out to be more expensive than if it were collected from only a single source. Secondly, every investigator is required to know how to carry out the various data collection techniques. If by any mistake any of the research technique is used in an improper or inefficient manner, then an opportunity to address a broader spectrum of issues or to conduct various inquiries may be lost.
3.4 Sources of Information
Sources of information for a research project include journals, text books, magazines, government papers, etc. However, here the information sources have been categorised as primary sources, secondary sources and reference sources.
3.4.1 Primary sources
For this research project the primary sources of information have been the journals available online; online journals have been classified as a primary source because they contain the most up to date the information.
Other materials such as previous dissertations and thesis have been referred for this dissertation. Previously completed dissertation reports and thesis act as a guide to frame the research methodology and also supply a list of references which can be used by the researcher to begin his/her research.
Additionally publications which have been published by professionals and papers presented in conferences have also been used a source of information for this research project. Papers presented in conferences are being considered valid for this research as these represent the outlook of professionals in practice. Publications which are written and published by professionals with respect to the topic can prove to be quite useful for research work.
3.4.2 Secondary sources
Books and magazines which have been used for gathering information are considered to be a secondary source of information.
Books are an excellent resource for obtaining knowledge on concepts and definitions. However, the issue with books is that they take some time to get published so the information contained in them may not be up to date by the time it is published and is available to the researcher.
Articles published in magazines may be ambiguous in nature, even though they may be carrying recent development in terms of the topic of research. The word ambiguous is used because these articles can e confused and may not be referenced in the correct manner.
Internet has been also regarded as a secondary source for gathering information on the topic. Websites of professional societies contain information but this information may not be up to date with the latest developments. Although vast amount of information is available on the internet, yet there will always be doubts raised over the quality, reliability and validity of the data.
It thus becomes very important for the researcher to study the various materials available online and then use the most convincing and authentic, with proper references, as a source of data.
3.4.3 Reference sources
The encyclopaedias and dictionaries, published and those available online, have been used for referencing. Although they have been used at a number of instances during this research project, yet they have neither been categorised under primary sources nor under secondary sources. The kind of information which is available through these sources is quite basic for research purpose.
3.5 Data Collection
The data collection is an extremely important element of any research project and this section will be throwing light on some of the data collection techniques to be used for follow a line of investigation work for this research project.
Before discussing the data collection techniques which have been made use of, it is becomes important to recognise difference between the sources which have been classified as one-way communications and two-way communications.
The one-way communication system requires the receiving the data as it is supplied. It is the researcher's prerogative to either use the data or to discard it. The two-way communications system involves the receivers' as well as the providers' responses; thus requiring a constant exchange of information between the two. It includes the enrichment of the attained data through an active process.
After the formulation of the research problem, it becomes evident as to what kind of data will be needed to study the problem, what is available and manner of analysing it. This is further determined by the nature of what the researcher wants to explore and the specific characteristics of the problem (Walliman, 2006).
Once the type of data to be collected and the research approach has been decided upon, the next step is to finalise the techniques to be used for collecting data (Naoum, 2002).
Qualitative research is associated with two kinds of data collection techniques, namely: interviews and observations (which may also be recorded from the literature review).
Quantitative research on the other hand entails the use of the following techniques for data collection: surveys and experiments.
In this research project both the qualitative and quantitative research methodologies have been combined. To collect data I have employed the use of interviews and questionnaires (which are a form of surveys). The chosen methods of data collection are further elaborated.
Interviews are considered to be a very powerful tool to gather the opinion of people. Also, asking questions is covered under both qualitative and quantitative methods of collecting data. In fact although interviews are regarded to be suitable for quantitative data collection, yet they are most useful when they are used for qualitative research (Walliman, 2006).
Tashakkori and Teddlie (1998) consider interviews as a more common method of collecting data in qualitative research than in quantitative research.
“No amount of sophisticated scale-building or statistical analysis can rescue a research project in which the conceptualization and instrumentation have been built on poorly conducted exploratory interviews” (Oppenheim, 2005, p65).
Nachmais and Nachmais (1996 quoted in Naoum, 2002, p56), “the questions, their wording and their sequence define the structure of the interview”. While in qualitative interviews the questions are non-descriptive and quite general; e.g. “Tell us about your workplace”; in the quantitative interviews, the questions tend to be more closed-ended and more structured; e.g. “Which of the following options will you choose to describe the quality of food in the university cafeteria: very good, good, bad, or very bad?”; (Tashakkori and Teddlie, 1998).
When information is not readily available for traditional quantitative research, the open-ended interviews are used for early research.
Interviews can further be grouped into 3 categories: unstructured interviews, structured interviews and semi-structured interviews (Naoum 2002).
• Unstructured interviews:
These kinds of interviews are ‘open-ended', are generally meant to be of a general level and are usually conducted with qualitative research (Naoum, 2002). These can be conducted at the beginning of the research as well. However, as Naoum clarifies, one needs to have a “clear research outline that you are familiar enough with” (2002, p56) to conduct this interview.
Walliman (2006, p 285) puts forth his opinion on unstructured interviews, “....if you need to explore a situation and wish to get information which you cannot predict, a very open and unstructured form of interview is appropriate”.
An unstructured interview concludes with a list of answers which are examined by the researcher for analysis.
• Structured interviews:
In a structured interview the questions presented to all the interviewees are the same. With the questions famed in a ‘closed-ended' format, these interviews resemble surveys. The structured interview allows the researcher to gain more in-depth information. The main advantage of a structured interview is that along with a relatively higher rate of response, the answers tend to be more accurate (Naoum, 2002).
• Semi-structured interviews:
These are more formal in comparison to unstructured interviews. Here, both ‘open-ended' and ‘close-ended' questions are used for conducting the interviews. The entire idea is to get as much information regarding the topic as possible (Naoum, 2002). The advantage of this type of interviews is that the interviewer is permitted a lot of freedom in asking questions and to raise specific questions (Naoum, 2002).
For this research purpose telephonic interviews were conducted to save time and expenditure. Lawyers from the United Kingdom and India were interviewed for research purpose.
“It has been estimated that face-to-face interviews spend only about one-third of their time in conducting interviews, the remainder of their time being taken up by travel and by locating respondents” (Oppenheim, 2005, p 97). However, there is a small disadvantage. Even though it is widely considered that data recorded during a telephonic interview prevents loss of data, actually some data may already have been lost as the response of the interviewee can also be judged through his facial expression which is unavailable in this case.
This disadvantage, however is not a huge problem and keeping this viewpoint in kind, it is regarded that telephonic interviews are the best option from the cost perspective, hence the choice. The interviewees who were interviewed for this research project were also equally comfortable while giving out interviews over the telephone and also agreed for the recording of interviews (to be referred to later t overrule any ambiguity).
Questionnaires can be also be categorised under both qualitative research methods and quantitative research methods. Questionnaire, as a method of collecting data, is quite flexible and has to be used carefully so that the requirements of a specific topic of research are fulfilled (Walliman, 2006).
“A questionnaire is not some sort of official form, nor is it a set of questions which have been casually jotted down without much thought. We should think of the questionnaire as an important instrument of research, a tool for data collection. The questionnaire has a job to do: its function is measurement” (Oppenheim, 2005, p 100).
While describing what a questionnaire entails, Tashakkori and Teddlie (1998, p 95) say, “In a more commonly used approach, you might have predetermined response options for questions, followed by and “other” response option with a blank space. The respondents are encouraged to write additional comments or provide additional data by writing them in that space”.
Questionnaires have their own advantages. They do not have any geographical limitations and also prove to be economically viable. A questionnaire gives you an opportunity to arrange questions and collect questions without requiring to personally talking to the respondent (Walliman, 2006).
However, there are two major disadvantage with questionnaires. Some people just do not fill them up depsite repeated reminders. This can porve to be quite a hindrance.Another disadvantage is the problem of missed questions. Sometimes the reposndents do not fill in all the questions causing missed data. Ideally, everyone wants to collect data in compete form but we have to ensure that our statistical software package can cope with varying case numbers (Oppenheim, 2005).
Questionnaires can be delivered by two means: personally or through post (in the case of this research project the questionnaires have been sent for responses by emails).
While postal questionnaire has the advantage of a low cost of data collection and processing, it also has the disadvantage of encountering obstacles like illiteracy and lesser number of responses (Oppenheim, 2005).
Personal questionnaires prove to be an expensive option. The interview may not take as a much time as the amount of time and money spent in commuting (Oppenheim, 2005).
The questions used in a questionnaire can be open-ended and closed-ended. Majority of the postal questionnaires consist of closed-ended questions; such as questions which require a particular response, more like either ‘yes' or ‘no' kind or the ones which involve a ranking (Naoum, 2002).
Open-ended questions can prove to be quite difficult to analyse even though they provide the respondent with an opportunity to express their views on the subject (Naoum, 2002). On the other hand despite the fact that the respondents are given a set of responses to choose from in closed-ended questions, they prove to be easier to analyse.
Questions may be factual or opinion based, depending on the sort of information which they are designed to gather. Naoum (2002, p 88) differentiates between the two, “Factual questions are designed to obtain objective data while opinion questions are designed to elicit subjective information”. The most common formats for questions are scales, checklists, grids, ranking and rating.
It is vital for the researcher to ensure that the questions are not ambiguous. It is necessary that the researcher has enough information on the topic under research to formulate a set of responses for the respondent to choose from (Naoum, 2002).
For this research study postal questionnaires have been preferred over personal questionnaires. Personal questionnaires would have meant increased expenditure and the responses would not have been generated f
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