Claims & Disputes

Question 1

What is a dispute

Answer 1

Parties are in disagreement

The disagreement does not go to the root of the agreement so contract still holds

Question 2

Main topics of disputes

Answer 2

EoT’s

Valuation of final accounts

Valuation of variations

Valuation of interim payments

Loss and expense claims

Question 3

Dispute escalation ladder

Answer 3

Site level and management

ADR including:
Dispute avoidance board
Senior representatives
Adjudication

Tribunal:
Arbitration
Litigation

Question 4

Benefits of ADR over tribunal

Answer 4

Less adversarial

Cheaper

Quicker

Simpler

Private

Question 5

What is non-adversarial ADR

Answer 5

Require mutual consent of parties to implement outcomes

Usually non-binding

Question 6

What is mediation

Answer 6

Mediator facilitates unbiased negotiation for parties to determine their own solution

Conducted on without prejudice basis

Successful in 75-80% of cases

Question 7

Principles of adjudication

Answer 7

Available at any time

Construction Act mandates right to adjudication

Decision is binding unless dispute is escalated to tribunal

Question 8

Adjudication process

Answer 8

Notice of adjudication provided to other party from referring party

7 days to appoint adjudicator through referral notice

Statutory obligation of responding party to participate

Question 9

Adjudication role

Answer 9

Adjudicator has 28 day to make a decision from referral (unless parties agree to extend by 14 days)

Adjudicator provides both parties with fair hearing for each to present their case

Question 10

Problems with adjudication

Answer 10

Time pressure can force/result in mistakes in decision

However, as of 2011 revisions to the construction act, adjudicator can correct their decision if they are obvious clerical errors and they are caused by an accident or omission by the adjudicator

Question 11

What is arbitration

Answer 11

The use of an independent person with specialist technical knowledge to settle a dispute with a binding decision

Governed by Arbitration Act 1996

Question 12

Advantages of adjudication over arbitration

Answer 12

Private matter

Quicker

Cheaper

Question 13

Powers of the arbitrator

Answer 13

Considerable power:

Can amend the contract to reflect parties’ true intentions

Require measurements and valuations as necessary to reach a decision

Review all documents and decisions taken so far that relate to the dispute

Apportioned cost of arbitration between parties based on decision

Question 14

When can an arbitrator’s decision be challenged

Answer 14

Serious irregularity

Lack of jurisdiction

A point of law

Question 15

What are the dispute resolution options

Answer 15

W1 Adjudication and the Construction Act does not apply

W2 Adjudication and the Construction Act applies

W3 Dispute avoidance board and the Construction Act does not apply

Question 16

Option W1

Answer 16

Not usable in UK as Construction Act does not apply

Dispute must be referred to Senior Representatives prior to adjudication

Question 17

Option W2

Answer 17

Only referred to the Senior Representatives if the parties agree; adjudication is available from the outset

Only UK-applicable dispute resolution option given Construction Act applies

Question 18

Option W3

Answer 18

Similar to W1 in that it is not UK-applicable, but includes the dispute avoidance board prior to tribunal