6 - Conflict Avoidance, Management and Dispute Resolution Procedures Flashcards
Conflict avoidance, management and dispute resolution procedures - Extract from Candidate Guide - Aug 2018 (updated Feb 2022)
How do you avoid conflict?
The best way is to keep communication clear and constant so that all parties understand what it is that is going on and when there is a dispute, it can be effectively addressed in a fair way.
What are the three pillars of negotiation? (NMA)
(NMA)
Negotiation – Problem solving between the parties
Mediation/Conciliation – Third party intervention which is not binding
Adjudication – Third party intervention which is binding
Name some conflict avoidance processes?
- Good Management
- Clear Contract Documentation
- Partnering and Alliancing
- Good Payment Practice
- Record Keeping
- Regular reporting and proactivity
What is a dispute?
Where two or more parties disagree on something.
What is the scheme for construction contracts?
It is secondary legislation that essentially provides adjudicative rights to parties of a contract that do not comply with the requirements of the construction act.
What are the different techniques of conflict avoidance?
- Confronting collaborative, confront the issue rather than each other
- Compromising give and take
- Smoothing more accommodating, involves sacrifice.
- Forcing force your view to complete disregard of the other view
- Avoiding postponing.
What is your for conflict avoidance style?
I generally confront the issue as I feel that this is the quickest and least adversarial way to avoid conflict, by dealing with the facts.
I would be forcing when I believe the position is clear cut in order to protect the client.
If you cannot resolve an issue during the meeting what would you do?
I would deal with a dispute by:
• Suggest that the issue be taken which is avoidance and postponing the conflict.
• This allows actions to be agreed to ensure that the information has been provided and digested by both parties.
• I would call each party separately and discuss their thoughts prior to arranging a follow up meeting.
• Sometimes it is not possible for everyone to be happy with a decision.
• I would speak to the unhappy party privately and seek commitment that their performance would not be affected.
How are disputes avoided?
- Robust tender and contract documentation.
- Controlled change.
- Informed procurement strategies.
- Sensible risk allocation.
- Appropriate financing.
- Pro-active project management.
What techniques are available to resolve disputes?
The 3 Pillars of Dispute Resolution (Professor Green of Boston University)
• Negotiation problem solving efforts of the parties themselves.
• Mediation or conciliation 3rd party intervention makes a non-binding decision.
• An adjudicative process final outcome determined by a 3rd party who’s decision is binding.
What are the types of Dispute Resolution?
- Negotiation
- Mediation and Conciliation
- Expert Determination
- Adjudication
- Arbitration
- Litigation
What are ADR techniques?
This stands for Alternative Dispute Resolution and refers to any technique that is not litigation or arbitration.
Advantages of ADR:
• Speed takes less time than court proceedings following the CPR.
• Informality - outside of court.
• Greater opportunity for negotiation.
• Cost less money on professional fees that litigation.
• Quality of decision making “ as its made by experts in the field not judges.
What types is most popular within the construction industry?
Adjudication.
What does JCT recommend for ADR?
The methods of dispute resolution are referenced in the Articles:
• Mediation
• Adjudication (adjudicator can be named in Contract Particulars)
• Arbitration (Appointing body can be named in Contract Particulars)
What is a conflict?
When two or more parties have a difference of opinion. It can be positive or negative and lead to: • Arguments • Negotiation • Dispute resolution • Innovation.
Advantages of using dispute boards?
- Confidentiality Any disputes and decisions will remain confidential.
- Expertise Members of the Dispute Board will have been selected for their knowledge and expertise before a dispute has arisen.
- Flexibility Parties can agree the procedure in advance and can agree any changes to it during the course of the project.
- Prevention of Disputes The existence of the Dispute Board can prevent disputes escalating because Parties are reluctant to be seen making frivolous claims. This is an incentive for the Parties to reach a negotiated settlement between them.
- Relationships Dispute Boards can help to preserve relationships, as the process is consensual and all Parties are invested in the process.
- Understanding The Dispute Board will gain a good working knowledge of the project as they will undertake regular site visits and create a relationship with team members. When a dispute arises, the Board will have a much better understand than a Tribunal, for example, which would only be appointed after a dispute has arisen.
Can you name some of the RICS approved ADR / Ombudsman bodies ? Where would you find this information ?
- Centre for Effective Dispute Resolution
- The property Ombudsman
- The property Redress Scheme
- Financial Ombudsman Service
- Local Government Ombudsman
- Adjudicators Office
Contained within the RICS Guidance Note - ‘Complaints Handling’ 1st Edition 2016
What Dispute Resolution method is named in your contract?
- JCT = Adjudication.
- NEC = Adjudication.
- NFDC = Adjudication
What do you understand by Statutory?
Statutory Law (Statue Law) is set down by legislate.
Talk me through how you would go about negotiating something?
- I would prepare, as understanding you points fully is critical
- I would pre-determine what I can afford to give away, know my bottom line
- Focus on the bigger picture, don’t get stuck on one item
- Try to negotiate a win/win situation
- Never accept the first offer
- Finally, I would negotiate the small deals before the big ones
Name some different forms of ADR?
- Mediation
- Conciliation
- Negotiation
What are the three formal forms of dispute resolution?
- Arbitration
- Litigation
- Adjudication
What are Alternative Dispute Resolutions? ADR
ADR predominantly means alternative dispute resolution, and refers to processes which are alternatives to the traditional binding dispute resolution procedures of litigation and arbitration. It is alternative in the sense that itis providing a faster and more economic dispute resolution procedure.
The important point is that the appropriate dispute resolution procedure should aim to resolve the dispute in an appropriate economic manner, taking into account the circumstances of the dispute.
Business relationships should be maintained, while resolving disputes at the lowest cost and within sensibly fast timetable. Confidentiality can be maintained, as indeed should flexibility in the process. This should lead to a greater satisfaction with the dispute resolution procedure for the parties.
What is the conflict avoidance pledge CAP ?
The conflict avoidance pledge (CAP) has been developed by a coalition of professional and industry bodies, and demonstrates commitment to conflict avoidance and the use of amicable resolution procedures to deal with emerging disputes at an early stage.
What is the conflict avoidance pledge CAP?
Five of the UKs leading professional bodies for construction and engineering have joined together to help the industry reduce the costs of conflict, and deliver major infrastructure and property development projects on time and on budget.
What statute does Arbitration sit under?
The Arbitration Act 1996
Who set up the property ombudsman ?
The scheme was underpinned by statue in 2007 (estate agents) and 2014 (letting and managing agents) and approved by the UK government to help consumers settle their disputes with property businesses such as estate agents, letting agents and property management agents.
What does without prejudice mean ?
That it cannot be used as evidence in court proceeding or criminal proceedings.
What is the meaning of disclosure ?
Relating to a mechanism allowing a party in arbitration to see a file of the other party.
How do you avoid disputes?
- Clear communication
- Proactive management
- Risk management
- Good management skills
- Good payment practices
- Record keeping
- Regular reporting
- Taking meeting minutes and agreeing actions
Why is ADR required in contracts?
The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act) stipulates:
• All contracts should allow for adjudication and should follow the adjudication procedure
• Any party is permitted to refer the dispute to adjudication
What if the contract doesn’t have ADR Procedures?
If the contract qualifies under the The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act), both parties have a statutory right to adjudication. If it does not qualify, then the Scheme for Construction Contracts applies.
What is the Scheme for Construction Contracts 2011?
It is a secondary piece of legislation put into contracts upon failure of compliance of the construction act. It sets out a procedure for the appointment of the adjudicator and conduct of adjudication.
How do you prepare for negotiations?
- Claim notified or received – what is the issue, who is involved?
- Initial response and planning – what is your stance? What are your aims and what can you compromise on?
- Prepare to meet – detailed planning, negotiation of team selection and roles.
What is an expert witness ?
Someone with specialist skills, knowledge, or experience who testifies in court about what s/he believes has happened in a certain case based on those specialist skills, knowledge or experience.
Who do they have a duty to ? (Expert Witness)
The courts
What is the responsibility of an expert witness ?
To provide independent, impartial, and unbiased evidence to the court or tribunal.
What does this Act (The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act) ) require in terms of certifying contractor’s requests for payment and invoices etc?
There must be a “due date” for each payment; there must be a “final date” for each payment; the contract must require a “payment notice” to be given within 5 days of the due date, stating what is to be paid and the basis on which it is calculated – this can be a duty of the payer or the payee.
What if a building contract does not contain provisions for adjudication?
Parties have the statutory right to adjudication assuming the contract qualifies under the construction act.
The Scheme for construction contracts will apply in its entirely.
What enforces the requirement for a building contract to contain provisions for adjudication?
The Housing grants, Construction and Regeneration Act 1996. (so called Construction Act)
Give me some examples of the requirements of the Housing Grants and Construction Regeneration Act.
- The right to be paid in interim, periodic or stage payments
- The right to be informed of the amount due, or any amounts to be withheld
- The right to suspend performance for non-payment
- The right to adjudication
- Disallowing pay when paid clauses
What changes did the Construction Act 2009 provide in terms of adjudication?
It allowed for verbal contracts to be protected by the same rights to adjudication.
Give me some examples of the requirements of the Housing Grants and Construction Regeneration Act.
- The right to be paid in interim, periodic or stage payments
- The right to be informed of the amount due, or any amounts to be withheld
- The right to suspend performance for non-payment
- The right to adjudication
- Disallowing pay when paid clauses
How do you avoid conflict on a project?
- Ensure that the tender information is clear, concise when tendering the project. i.e. a clear scope of works.
- If there is a dispute, use a people approach first and try to negotiate an agreement.
What would you consider to select a form of dispute resolution?
- The cost in proportion to the claim
- The timescales involved
- The impact on business relationships and reputation
What could indicate the success of a negotiation on a final account?
Both parties come away happy, both parties feel that negotiations were handled in affair and reasonable manner and costs are agreed within cost report budgets.
What court are construction disputes heard ?
Technology and construction courts, nothing less than £250,000.
What criteria do RICS require of an ADR / Ombudsman ?
- The ADR mechanism must be well established
- The ADR mechanism must be independent of the firm or valuer
- The ADR mechanism must use a transparent, accountable and consistent decision-making process
What current challenges is Covid and/or Brexit bringing to Conflict avoidance, management and dispute resolution procedures?
Disjointed teams Communication can come across negative in email Less cohesiveness.
What does the abbreviation HGCRA strand for ?
Housing Grants Construction Regeneration Act 1996.
What is dispute resolution?
Actions to resolve contractual disagreements between parties.
What is Expert Determination?
The parties agree by a contract that a third party will make a binding decision on them. In most cases, the decision is final and un-appealable.
What is included in the RICS Conflict Avoidance and Dispute Resolution Guidance Note (Part of the ‘Black Book’)?
- Conflict avoidance processes
- Three pillars of dispute resolution
- Dispute resolution techniques
- ADR
- Standard form contracts
- Conflict Avoidance
- Dispute Resolution Procedures
- Dispute Escalation Clauses
- Interim Valuations and Claims
What is the RICS dispute resolution service?
RICS Dispute Resolution Service (DRS) is the worlds oldest and largest provider of alternative dispute resolution (ADR) services in the land, property and construction industries. Over the last four decades, DRS has appointed dispute resolvers in nearly a quarter of a million cases. Internationally, DRS resolves around $2 billion US dollars worth of disputes every year keeping these cases out of the courts.
What are the ADR measures ?
