5 - Conflict avoidance, management and dispute resolution procedures

Question 1

What is the RICS dispute resolution service and when would you use it ?

Answer 1

RICS Dispute Resolution Service (DRS) is the world’s oldest and largest provider of alternative dispute resolution (ADR) services in the land, property and construction industries

Question 2

What are the main forms of ADR ?

Answer 2

The most common types of ADR are mediation, conciliation, arbitration and adjudication.

Question 3

What are the main forms of dispute resolution in order ?

Answer 3

Mediation
Mediation involves an independent trained mediator who facilitates communication between the two parties having the dispute, with the aim of achieving a settlement or resolution. The mediator will discuss the issues and try to help the parties reach an agreement, but will generally not offer their own opinions or assessment.

Conciliation
Conciliation is generally used for employment situations rather than commercial disputes. Conciliation is a compulsory process before an individual wishes to bring a claim to the Employment Tribunal. The conciliator will discuss the issues and try to help the parties reach an agreement, often providing their own opinion after assessing the situation and the different arguments. Their opinion may help to form a settlement or achieve a conclusion to the dispute..

Arbitration
This is more formal than mediation, and involves a process in which the dispute is resolved by the decision of an arbitrator (a nominated third party who is qualified to handle arbitration). The arbitration process can be particularly useful in disputes which require an understanding of technical knowledge and where privacy is important (eg to avoid disclosure of commercially sensitive information) or if there is an international element (i.e. to avoid multiple legal jurisdictions). It runs as a tribunal process and decisions are binding. Many contracts will contain an arbitration clause, which requires arbitration to be used in the case of a dispute.

Adjudication
This form of ADR is generally reserved for disputes which arise out of construction contracts. It is a relatively formal process which involves: providing a written Notice of Adjudication which sets out the brief details of the dispute; appointment of an agreed adjudicator; serving a referral notice which sets out the dispute in detail by the aggrieved party; a response to this referral notice (essentially the defence); and finally a decision being reached by the adjudicator within 28 days of the referral notice. This decision is final and binding.

Question 4

Can you expand on what early warning systems are ?

Answer 4

Factors or red flags that illude to the requirement for dispute resolution at a later stage

Question 5

Why is it important to define the client objectives and your scope of works at an early stage ?

Answer 5

To ensure the client understand my involvement and fees in relation to the works.

Question 6

What did you learnt from reviewing the RCIS conflict of interest document ? What is the status of this document ? What doe this mean ?

Answer 6

I learned the types of conflicts of interest. The document is a Guidance note = Recommended best practice

Question 7

What check can you carry out for COI ?

Answer 7

We are an internal system to check property and client, we also verbally discuss new appointments between al the surveyors

Question 8

What are the timescales attached with adjudication ?

Answer 8

The adjudicator is required to reach his decision within 28 days of service of the referral notice. This period can be extended by a further 14 days (42 total) if the referring party agrees, or can be further extended if both parties agree.

Question 9

How do you appoint a Adjudicator ?

Answer 9

Though the nominating body - RICS as per the contract

Question 10

What is adjudication?

Answer 10

Adjudication
This form of ADR is generally reserved for disputes which arise out of construction contracts. It is a relatively formal process which involves: providing a written Notice of Adjudication which sets out the brief details of the dispute; appointment of an agreed adjudicator; serving a referral notice which sets out the dispute in detail by the aggrieved party; a response to this referral notice (essentially the defence); and finally a decision being reached by the adjudicator within 28 days of the referral notice. This decision is final and binding.

Question 11

Why might you pick mediation over adjudication?

Answer 11

Less formal
Cheaper
none binding
easier to run and quicker

Question 12

How can you avoid conflicts in the first place?

Answer 12

Good record keeping
defined contract document
early warning systems
regular site visits

Question 13

Why might you want to keep disputes out of the courts?

Answer 13

For costs and reputational damage

Question 14

Give me some examples of the requirements of the Housing Grants and Construction Regeneration Act.

Answer 14

The right to adjudication
The right to staged payments and dates
the ight to suspension for non payment

Question 15

What does this Act require in terms of certifying contractor’s requests for payment and invoices etc?

Answer 15

that is it processed within timescales (5 days for JCT MX form the due date) and that intention to ‘pay less’ is informed more than 5 days before the payment date

Question 16

What action would you take if a contractor submitted a claim for payment which was grossly over-valued?

Answer 16

I would review the progress on site to initially confirm, I would calculate the accurate payment total and issue this within the payment certificate for this periods

Question 17

What method of ADR is specified in the contracts you use and what are the benefits of this method?

Answer 17

Initially negotiations with the nominated parties in the contract, this can be escalated to adjudication and even arbitration (7.2)

Question 18

What is the difference between arbitration and adjudication?

Answer 18

Arbitration is a procedure in which both sides agree to let an impartial third party, the arbitrator, decide the case. The arbitrator may be a lawyer, or may be an expert in the field of the dispute, or in some cases, an arbitration panel. The arbitrators decision, known as an award, is legally binding and can be enforced through the courts. Normally, there is no appeal, however there are exceptions in which appeals may be accepted. In adjudication, the decision is the responsibility of a third party adjudicator selected by the parties to the dispute.

Adjudication decisions are binding unless and until they are revised by subsequent arbitration or litigation after practical completion, or by agreement between the parties (hence the term ‘pay now argue later’). There is no right of appeal and limited right to resist enforcement. Generally, adjudicators do not have the power to award costs (other than their own fees and expenses). Adjudication must adhere to strict timescales and typically takes up to 28 days.

Question 19

What are the benefits of clearly defining a client’s objectives?

Answer 19

That everyone has an understanding of what is expected from an early stage.

Question 20

What is a conflict of interest?

Answer 20

A conflict of interest is anything that impedes or might be perceived to impede an individuals or firm’s ability to act impartially and in the best interest of a client.