8 - Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

270 - How can you avoid conflict in the first instance? (5)

Answer 1

1) CLEARLY STATE in all tender / contract documents exactly WHAT IS REQUIRED OF ALL PARTIES.
2) Ensure CONTINUOUS EFFECTIVE COMMUNICATION between all parties.
3) Put everything IN WRITING to ensure there is always documented evidence should a dispute arise (meeting minutes).
4) FOLLOW COMPANY PROCEDURES and policy (including quality assurance processes).
5) FOLLOW RICS STANDARDS, professional statements and guidance.

Question 2

271 - If conflict occurs, how do you deal with it initially? (2)

Answer 2

1) RAISE the issue WITH ALL PARTIES and TRY TO RESOLVE through COMMUNICATION and NEGOTIATION.
2) A face-to-face MEETING is usually the best way to find a resolution.

Question 3

272 - What could indicate the success of a final account negotiation? (3)

Answer 3

1) ALL PARTIES come away HAPPY.
2) COSTS AGREED and WITHIN the client’s BUDGET.
3) The negotiation is resolved in a TIMELY MANNER.

Question 4

273 - In your opinion, what is the cause of most disputes? (5)

Answer 4

1) COMMERCIAL aspects
2) UNCLEAR or CONFLICTING specifications / drawings
3) Teams under PRESSURE (poor or RUSHED DECISIONS made)
4) INSUFFICIENT detail / CONSIDERATION given to building CONTRACTS prior to signing
5) Unclear SCOPE OF SERVICE

Question 5

274 - What can you do if a negotiation breaks down and the matter cannot be resolved?

Answer 5

Consider an ADR (alternative dispute resolution) to resolve

Question 6

275 - What is dispute resolution?

Answer 6

Dispute resolution is a term that refers to several PROCESSES that can be USED TO RESOLVE a conflict, dispute or claim

Question 7

276 - What does ADR stand for and what is it? (2 + 3 examples)

Answer 7

1) ADR stands for alternative dispute resolution.
2) ADR predominantly means alternative dispute resolution and refers to PROCESSES which are ALTERNATIVES to the TRADITIONAL binding dispute resolution procedures of litigation and arbitration.

Main forms of ADR;
1) Negotiation
2) Mediation
3) Adjudication

Question 8

277 - What is the TCC? (3)

Answer 8

1) Technology and Construction Court (TCC).
2) Handles disputes about buildings, engineering and surveying.
3) The TCC does not normally handle cases with a value of less than £250,000 unless there is a good reason.

Question 9

278 - What is mediation? (Statement + 5 points)

Answer 9

The parties AGREE on an INDEPENDENT, third-party NEUTRAL system to FACILITATE discussions between them, with the goal of reaching a settlement. The POWER to settle REMAINS WITH THE PARTIES, but the process is lead by the mediator.

1) Mediation ENCOURAGES coming together and agreeing.
2) By MUTUAL AGREEMENT (voluntary).
3) The process can be INITIATED at ANY TIME between the parties.
4) The mediator does NOT AWARD a winning party.
5) The process is NON-BINDING.

Question 10

279 - Can you explain what a negotiation is please? (Statement + 3 points)

Answer 10

The PROCESS whereby the parties WORK OUT BETWEEN THEM how to resolve issues that have arisen. POWER to settle the dispute rests WITH THE PARTIES.

1) The negotiation ENDS when BOTH PARTIES come to an AGREEMENT.
2) Suitable for SIMPLER MATTERS, easily resolvable, compromises made.
3) Requires CO-OPERATION of both parties.

Question 11

280 - What is conciliation? (Statement + 2 points)

Answer 11

A PROCESS similar to mediation used in the construction industry whereby a CONCILIATOR seeks to FACILITATE A SETTLEMENT BETWEEN the PARTIES. The conciliator does NOT DECIDE any issues of LAW or FACT but conducts a process whereby EACH PARTY STATES its POSITION and then attempts to work towards a COMPROMISE.

1) INDEPENDENT PARTY to AID an agreement.
2) Conciliator PREPARES a RECOMMENDATION which sets out their solution to the dispute, if NEITHER PARTY DISSENTS from that recommendation or initiates adjudication or arbitration, then the recommendation BECOMES FINAL AND BINDING.

Question 12

281 - What is the difference between mediation and conciliation? (2)

Answer 12

1) In MEDIATION, the mediator ACTS AS A FACILITATOR who helps the parties in agreeing.
2) CONCILIATION allows for the facilitator to play a MORE DIRECT ROLE in the solution for the dispute. The facilitator can MAKE SUGGESTIONS towards certain proposals and give advice for certain solutions.

Question 13

282 - What is an expert witness?

Answer 13

An expert witness is defined as a PERSON WHOSE EXPERIENCE and KNOWLEDGE in a particular field is BEYOND what is EXPECTED of a LAYMAN. An expert witness MAKES his or her KNOWLEDGE AVAILABLE to the court or other bodies, to HELP IT UNDERSTAND the issue before it and reach a just and reasoned decision.

Question 14

283 - What is expert determination? (5)

Answer 14

1) Expert determination is the PROCESS whereby the PARTIES AGREE to REFER their disagreement to an IMPARTIAL EXPERT THIRD PARTY and will then be BOUND BY his or her DECISION.
2) The parties can CHOOSE who the appointed EXPERT is.
3) MORE INFORMAL than arbitration or litigation.
4) IDEAL for TECHNICAL DISPUTES.
5) Expert determination is GENERALLY SIMPLER and CHEAPER than arbitration or litigation, can be used as a SHORT-CUT to a BINDING DECISION.

Question 15

284 - What are the advantages of expert determination? (4)

Answer 15

1) CONFIDENTIAL procedure which is LESS ADVERSARIAL and helps PARTIES MAINTAIN a WORKING RELATIONSHIP.
2) Provides COST and TIME EFFICIENT solution for resolving disputes.
3) Procedures are CONTROLLED BY BOTH PARTIES rather than a court or arbitration rules.
4) An EXPERT can be appointed who is FAMILIAR with the SPECIFIC technical issue(s).

Question 16

285 - What is adjudication? (2)

Answer 16

1) Adjudication was developed to ALLOW for construction CONTRACT DISPUTES to be RESOLVED more QUICKLY and COST-EFFECTIVELY than resolution through arbitration or litigation.
2) It’s objective is to provide a FAST-WORKING SOLUTION to an issue (pending the outcome of, or without the need for, a more formal dispute resolution procedure) so that parties can quickly resume or continue work under the contract.

Question 17

286 - Can you explain how the adjudication process works in terms of timeframes? (6)

Answer 17

1) Following the CRYSTALLISATION of a dispute, either party can SERVE a NOTICE on the other party of its intention to refer the dispute to adjudication.
2) Within 7 DAYS of the issue of the notice, the referring party (the party commencing the proceedings) must SERVE upon the other party its REFERRAL (its statement of case). If the Referral is not served within that time, the adjudication will likely be void.
3) The Referral must contain a DETAILED EXPLANATION of the referring party’s claim in respect of the dispute identified within the notice, along with any supporting documentation.
4) Within that SAME 7 DAY period, the referring party must secure the APPOINTMENT of an ADJUDICATOR. This will either be a person named in the contract or, if no-one is named, by using the nominating body identified in the contract.
5) Following the appointment, the ADJUDICATOR will SET OUT a TIMETABLE; this will usually permit the other party to issue a RESPONSE to the REFERRAL.
6) The Adjudicator MUST make his DECISION WITHIN 28 DAYS of the Referral.

Question 18

287 - Can the decision period of 28 days (for adjudication) be extended?

Answer 18

That time can be extended to 42 days (14 DAYS extra) by mutual AGREEMENT of BOTH PARTIES.

Question 19

288 - Is the adjudication process binding?

Answer 19

The Adjudicator’s decision will be BINDING on the parties (and enforceable in court) UNLESS the ADJUDICATOR ACTED OUTSIDE his or her JURISDICTION or was BIASED TOWARDS ONE PARTY.

Question 20

289 - Is there an appeal process with adjudication?

Answer 20

There is NO APPEAL PROCESS; however, the parties CAN TAKE the same dispute to LITIGATION (OR ARBITRATION if the contract contains an arbitration agreement).

Question 21

290 - What if a building contract does not contain provisions for adjudication?

Answer 21

Adjudication became a LEGAL RIGHT in relation to construction contracts in the UK when legislation known as the CONSTRUCTION ACT came into force.

Question 22

291 - Who pays for the adjudication? (2)

Answer 22

1) BOTH PARTIES are jointly LIABLE for the Adjudicator’s fees.
2) The ADJUDICATOR can usually DECIDE WHO is to PAY the FEES and reasonable expenses.

Question 23

292 - What is arbitration? (3)

Answer 23

1) Arbitration is ESSENTIALLY a LAWSUIT but WITHOUT COURT INVOLVEMENT.
2) The PARTIES AGREE (either in a contract before a dispute arises or, through a subsequent agreement to avoid a lawsuit) to SUBMIT their DISPUTE TO ARBITRATION rather than to pursue a lawsuit in court.
3) The parties agreement gives the ARBITRATOR the power to ISSUE A DECISION as to the parties rights and obligations and such decision will be LEGALLY BINDING on all parties.

Question 24

293 - What are the advantages or arbitration? (4)

Answer 24

1) The process is PRIVATE - there is no public record of any proceedings, although not necessarily confidential.
2) SPEED (compared to litigation).
3) The PARTIES can AGREE on an ARBITRATOR with relevant expertise in the matter.
4) The ARBITRATORS AWARD can be ENFORCED as a judgement of the COURT.

Question 25

294 - What are the disadvantages of arbitration? (3)

Answer 25

1) The PARTIES must BEAR the COSTS of both the ARBITRATOR and the VENUE.
2) LIMITED APPEAL RIGHTS.
3) If the MATTER is COMPLICATED but the AMOUNT of the money involved is MODEST, then the arbitrators fee may make arbitration UNECONOMICAL.

Question 26

295 - What is litigation? (3)

Answer 26

1) Litigation involves one of the parties commencing a CLAIM IN THE CIVIL COURTS.
2) The COURTS have INHERENT JURISDICTION to hear a dispute in respect of just about anything.
3) The NATURE, COMPLEXITY and VALUE of the dispute will DETERMINE WHICH COURT will hear a particular dispute.

Question 27

296 - What are the advantages of litigation? (3)

Answer 27

1) Judges can COMPEL THE PARTIES TO COMPLY with time frames and have POWERS OF SANCTIONS for non-compliance.
2) Judges have the POWER TO MAKE ORDERS to provide INTERIM RELIEF to protect a party’s position pending the final judgement.
3) There are DEFINED RIGHTS OF APPEAL in cases where ERRORS OF FACT OR LAW are made.

Question 28

297 - What are the disadvantages of litigation? (4)

Answer 28

1) Potentially GREATER COSTS if the dispute is not well managed or the other party seeks to delay the proceedings.
2) Potentially a LONGER PERIOD to obtain a JUDGEMENT.
3) Proceedings are generally CONDUCTED IN PUBLIC.
4) Judgement will be SUBECT TO APPEAL.