Considerable concern has been expressed in recent years regarding the dramatic increase in conflicts and disputes in the construction industry in many countries including Australia. These conflicts and disputes resulted in a high cost to the industry both in terms of direct costs (lawyers, claims consultants, management time, delays to projects completions) and indirect costs (degeneration of working relationships, consequences of mistrust between participants and lack of teamwork). The nature of the construction disputes is complex, dynamic and multi-faceted. In addition, it is not only confined to disputes between the client and main contractor, but it occurs between the prime contractor, sub-contractors, consultants and designer. The alternative dispute resolution (ADR) is any procedure or combination of procedures, conducted in a controlled structured manner, which is entered into voluntarily by the parties to a dispute, as opposed to one using the other publicly in an open court. This research reviewed the literature to provide a comprehensive discussion and analysis on the root causes of disputes in the construction industry. The relationships between the parties involved in a construction project are also defined along with the potential of disputes in each relationship. Furthermore, the paper comprehensively explained how BIM could be used as an ADR in construction project phases including tender, engineering, procurement and construction.