Conflict Avoidance

Question 1

What is a dispute?

Answer 1

A dispute is a disagreement between parties over an issue (which can lead rise to conflict)

Question 2

What is the cause of most disputes?

Answer 2

• Time constraints – Delays, extension of time, loss and expenses
• Cost – commercial, overspend, provisional sums
• Contractual – dispute over clauses, roles and responsibilities
• Quality - Insufficient design information, Unclear or conflicting specification / drawings, unclear scope of services
• Change

Question 3

How can conflict be avoided?

Answer 3

1. Good management
2. Having clear Contract Documentation – unambiguous and specific, clear contractual mechanisms
3. Collaboration - Partnering and Alliances – Building a cooperative project team.
4. Regular Reporting – Programme, cost, risk and quality
5. Clear line of Communication. Clear roles and responsibilities and all communication is effective and unambiguous. Communicate in written form – documented evidence should a dispute arise (meeting minutes)
6. Following procedures and processes – quality assurance
7. Following RICS standards, professional statements and guidance
8. Risk management
9. Good record keeping

Question 4

Explain a time you have managed conflict well?

Answer 4

Meeting dispute happened, calmed situation down asked to take it and resolve outside meeting, at end of meeting asked them to stay and talk it out , act as a mediator

Question 5

How does Risk management reduce conflict / dispute?

Answer 5

Risk management helps reduce conflict by activity managing risk before they become issues. It puts in lace mitigation measures to reduce the likelihood and impact of a risk happening.
Through risk management workshop with the project team, risks can be identified and recognised by all so they are aware of all potential issue that could occur.
Project team works together to provide action plan to reduce the impact of risks.

Question 6

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

What are the two types of dispute resolution?

Answer 7

Alternative dispute resolution

Orthodox dispute resolution

Question 8

What is alternative dispute resolution (ADR)?

Answer 8

Alternative dispute resolution is a processes whereby the parties to the dispute make their own settlement agreement rather than the decision being made for them by a third party.

1. ADR is non-binding (unless agreed to be)
2. Dispute can be addressed elsewhere after but anything discussed in the ADR cannot be used as evidence
3. Encourages parties to talk to each other and preserve working relationships
   Main forms include:
   • Negotiation
   • Mediation
   • Conciliation

Question 9

Benefits and Risks of ADR?

Answer 9

Benefits
• Encourages the parties to talk to each other
• Preserve working relationships
• Helps the parties to focus on the real matters in which they are in dispute.
• Avoids legal costs
Risks
• Non- binding can be challenged through orthodox process

Question 10

What is orthodox dispute resolution?

Answer 10

In orthodox dispute resolution is a process whereby the settlement agreement is made by a third party and it is final and binding.

Question 11

What forms of dispute resolution are there?

Answer 11

• Negotiation
• Mediation
• Adjudication
• Arbitration
• Litigation

Question 12

What is Negotiation?

Answer 12

Negotiations are informal discussions between the parties on the core issues of the dispute with a view to resolving them on agreed terms. Most suitable for simple matters.
• Relies upon the parties finding common ground, make compromises
• For negotiation to be successful each party should have a detailed understanding of the issues, the parties involved and all potential liabilities.
• Power to settle the dispute rests with the parties.

Question 13

Advantages and disadvantages of Negotiation?

Answer 13

Advantages of Negotiation:

1. It is very flexible
2. It can take place at any point during a project
3. Reputations and relationships are generally maintained
4. It is relatively quick and cost effective
5. It opens lines of communication
6. The process is private and confidential

Disadvantages of Negotiation:

1. Decisions made are non-binding
2. Requires high levels of trust
3. Parties may do themselves more harm than good if they do not have good negotiating expertise

Question 14

What are the two main approaches to negotiation?

Answer 14

• Competitive
One party aims to get the best deal possible regardless of the needs or interests of the other party. This type of negotiation leads to an ‘us against them’ situation and as such should be avoided where possible.
Tactical. where one party goes in very low (or high depending on the situation) and slowly works their way up throughout the negotiation.

• Collaborative
Collaborative negotiation seeks to create a ‘win-win’ situation where all parties get part or all of what they are seeking from the negotiation. This approach tends to produce the best results, helps to build long-term relationships and minimises the opportunity for conflict.
Aim of finding a mutually beneficial arrangement.

Question 15

What is Mediation?

Answer 15

• Mediation is a process whereby the parties agree on and appoint an independent, neural, third-party to facilitate discussions between them, with the goal of reaching a settlement.
• These discussions take place in a structured multi-stage format. The aim of which is to assist the parties in reaching a conclusive and satisfactory agreement.
• The role of the third party is to facilitate the decision-making of those in dispute.
• Mediator should be independent of the parties – impartial. Manage the process.
• The power to settle remains with the parties, but the process is led by the mediator.

Question 16

Advantages and disadvantages of Mediation?

Answer 16

Advantages of Mediation:

1. Mediation is less expensive than other techniques
2. The mediation process is flexible and creative solutions that are mutually satisfactory can be developed
3. Mediation is a private and confidential process
4. Mediation does not deprive the parties of the ability to take the dispute to arbitration or litigation
5. The appointed mediator is neutral and independent
6. Promotes communication between the two parties
7. The mediator and the parties follow a specific set of protocols that require everyone involved to work together
8. Mediation is less adversarial than litigation
9. The parties reserve the right to determine the parameters of the agreement
10. All agreements reached are generally SMART
11. Agreements can be reached quickly, usually between 2 days–2 weeks
12. Parties can engage in mediation at any point in the project life cycle

Disadvantages of Mediation:

1. Any agreements made are non-binding
2. The process is informal
3. The process is voluntary
4. Some disputes may be beyond the scope of the mediation process
5. Precedents cannot be used as the process is private

Question 17

What should the role of the mediator ensure?

Answer 17

A mediator should:
• Manage the process firmly and sensitively;
• Facilitate a settlement and overcome deadlock;
• Gather information and identify the parties’ objectives;
• Act as a reality tester, assisting the parties to take a realistic view of the problem;
• Act as a problem solver, thinking creatively in order to help the parties construct their own outcome;
• positive approach to the issues;
• Act as a settlement supervisor, aiding the parties to record their settlement, but not to record it for them; and
• Maintain momentum towards settlement and prompt the parties to settle at an appropriate point in the mediation

Question 18

What is Adjudication?

Answer 18

• Adjudication is a dispute resolution process whereby an adjudicator is appointed to review evidence submitted by disputing parties to come to a decision and determine the outcome of the dispute
• Under the Housing Grants, Construction and Regeneration Act 1996 made it mandatory for adjudication to apply to every construction contract.
• Decision Is binding

Question 19

When was adjudication introduced?

Answer 19

• Under the Housing Grants, Construction and Regeneration Act 1996 made it mandatory for adjudication to apply to every construction contract.
• Applies to building contract and professional appointments
• If the Act applies to a contract then either party may request the appointment of an adjudicator to be made within 7 days of serving a Notice of adjudication, and the adjudicator has 28 days from issue of the Referral Notice within which to issue a decision.
• The decision is binding and in most cases will be readily enforceable in the Technology and Construction Court (TCC).

Question 20

What changes to adjudication did the Local Democracy, Economic Development and Construction Act 2009?

Answer 20

• Adjudication clauses must be in writing, otherwise Scheme Construction Contracts applies (Part 1= adjudication, Part 2= Payment)
• It is no longer allowable to define within a contract who should bear the cost of adjudication. Parties should share the cost of the adjudicator’s fees and the expenses associated with the process in equal proportions. However, an adjudicator can determine that a party is liable to contribute to his fees and expenses in unequal proportion.
• Slip Rule - Adjudicators have the right to correct errors in their decisions within 5 days of delivering that decision.

Question 21

Advantages and Disadvantages of Adjudication?

Answer 21

Advantages of Adjudication:
1. Decisions are made in private and confidential and are not heard in open court
2. A decision will be made in 28 days unless otherwise agreed
3. Flexibility-The parties can agree to extend the timescales for a decision to be made if required
4. Decisions are binding unless overturned at litigation or arbitration
5. Costs–adjudication is cheaper than litigation
6. The adjudicator will usually provide written reasoning for his actions
Disadvantages of Adjudication:
1. The 28 days period is sometimes not appropriate for complex disputes or disputes with multiple parties
2. Decisions can be overturned by subsequent litigation or arbitration
3. The short time frame can lead to incorrect decisions which have to be enforced until litigation or arbitration
4. The process cannot rely on precedents as it is private

Question 22

What is the Adjudication process?

Answer 22

1. Pre-adjudication – do you have a construction contract? Does adjudication apply? Is there a clear dispute? Do you have the right to adjudication?
2. Notice of Adjudication
   a. The referring party will serve a notice of Adjudication to every party to the construction contract and identify their intention to refer a dispute to adjudication. This document defines the scope of the dispute and must contain:
   i. A brief description of the contract & names and addresses of the parties to the contract
   ii. A brief description of the dispute including where and when the dispute arose
   iii. A clear description of the relief being sought(injunction, extension of time, loss and expenses, damages etc.)
   b. A notice of adjudication cannot refer to multiple disputes unless the parties to the dispute expressly agree or the construction contract specifically permits the referral of multiple disputes.
3. Appoint Adjudicator
   Within 7 days of notice of adjudication appoint Adjudicator. The contract should set out how an adjudicator is to be appointment.
   b. Named or nominated through nominating bodies (either by agreement or by the party who is seeking adjudication referring it to Adjudicator Nominating Board).
   c. Referring party should consider if there Is a particular adjudicator they wish to propose to the responding party (expert)
   d. Usually helpful to send the request to the adjudicator or Adjudicator Nominating Body at the same time as the notice of adjudication is sent to the responding party.
4. Referral Notice
   Within 7 days of appointing Adjudicator issue Referral Notice.
   b. A referral notice sets out the legal and factual details of the claim being put forward for adjudication by the referring party. Is should include supporting evidence/documentation to support a claim, including:
   i. Expert reports
   ii. Project progress documents (meeting minutes, progress reports, notices etc.)
   iii. Witness accounts, reports, statements
   iv. Copies of the relevant parts of the contract
5. Response
   Within 7 days of referral notice the responding party must serve its response together with supporting evidence.
6. Reply and Rejoinder
   a. The referring party does not have an automatic right to reply to the response but it may be possible to persuade the adjudicator that, in some circumstances, a reply is appropriate. However, the adjudicator may limit the scope of the reply to only new points raised in the response, given the tight time constraints in which he must give his decision.
   b. Adjudicator may request further evidence
7. Decision
   Within 28 days of the Referral Notice the Adjudicator must give there decision. This can be extended by 14 days with the agreement of the referring party or by such period both agree.
   b. The decision is final and binding, providing it is not challenged by subsequent litigation or arbitration. The parties must comply with the decision immediately unless the adjudicator places timescales on the compensating actions. Parties must comply with the decision even if they intend to pursue the matter further by litigation or arbitration. If a party decides to do so the dispute will be heard fresh and not as an appeal to the adjudicator’s findings. However, a party cannot adjudicate the same dispute in further adjudication proceedings.

Question 23

27. Can the decision period of 28 days for adjudication be extended?

Answer 23

The time can be extended to 42 days by mutual agreement of both parties
28.

Question 24

Is the adjudication process binding?

Answer 24

Yes, The adjudications decision will be binding on the parties (and enforceable in court) unless the adjudicator acted outside their jurisdiction or was baised towards one party

Question 25

Is there an appeal process with adjudication?

Answer 25

There is no appeal process however the parties can take the same dispute to litigation (or arbitration is stated within the contract)

Question 26

What is Arbitration?

Answer 26

Arbitration is a process, whereby formal disputes are determined by a private tribunal.
Alternative to litigation
For arbitration to apply, it must be written into the contract between the parties

Question 27

What is the Arbitration Act 1996?

Answer 27

This Arbitration Act provides a legal framework for arbitration, including recognition of the process, the arbitrator, the procedures, and also the award and enforcement of that award.
It aims to ensure:
• Arbitration is fair, quick and cost effective
• Promotes party autonomy. Respects parties choices
• Courts have supportive powers at appropriate times
• Language used is user friendly and readily accessible
• Follow the model of law wherever possible

Question 28

Process of Arbitration?

Answer 28

1. Preliminary Proceedings
   a. Pleadings
   b. Gathering evidence & Interviewing witnesses
   c. Expert reports
2. A Hearing
   a. The parties to the dispute, their legal teams and the arbitrator are present at this hearing.
   b. The length of the hearing will depend upon the issues in dispute
3. The Award
   a. There are time limits on the award, it is final and binding.

Question 29

What are the advantages and disadvantages of arbitration?

Answer 29

Advantages of Arbitration:
1. Arbitration hearings, disputes and awards are private and confidential
2. Speed (compared to litigation)
3. Parties pick Arbitrator with relevant technical expertise
4. A binding and enforceable decision is reached. The opportunity to challenge an award is extremely limited
5. It is possible to issue interim awards, before the final award. Any matters dealt with in an interim award are final
Disadvantages of Arbitration:
1. Parties pay the costs of the Arbitrator, venues and all other related costs
2. Limited appeal rights
3. The are no precedents to relay upon as hearings are private
4. There are no means of including 3rd parties unless the parties consent
5. Lack of transparency can lead to bias or tainted decisions
6. If matter is complicated, the money disputing is modest, arbitrator fees may be uneconomical

Question 30

What is Litigation?

Answer 30

Litigation is the process of taking a dispute to the court of law.
The procedure is governed by the Civil Procedure Rules, and the nature, complexity and value of the dispute will determine which court will hear a particular dispute.

Question 31

What is the Technology and Construction Court (TCC)?

Answer 31

The technology and construction court handles disputes about buildings, engineering, and surveying.
The TCC does not normally handles cases with a value of less than £250,000 unless there is a good reason

Question 32

Advantages and disadvantages of litigation?

Answer 32

Advantages
• Judges give reasons for their rulings
• Precedencies are referenced when making decisions and can be used by the courts to help make decisions
• A binding and enforceable decision is reached
• Judgements are subject to very limited rights of appeal
• An array of remedies such as injunctions are available
• The process is able to deal with third parties
Disadvantages
• Costs are high
• Very time consuming (12-18months, long time period to get a judgement
• Adversarial – break down of working relationships
• Public which can lead to reputational damage / working relationships are destroyed.
• Inflexible process

Question 33

Expert determination?

Answer 33

Expert Determination is a process whereby the parties chose and appoint an impartial third party for their knowledge and understanding of the particular issues in dispute. They are often acknowledged as an expert in the field.

Question 34

How does NEC deal with dispute resolution?

Answer 34

NEC4 contracts provide an adjudication procedure for use in the UK when the Housing Grants, Construction and Regeneration Act 1996 applies.

Option Y(2) – Dispute resolution
The final dispute resolution procedure is a ‘review by the tribunal’. If either party is dissatisfied with the adjudicator’s decision then they may refer that dispute to the tribunal.
The tribunal may be a court or an arbitration.