Conflict Avoidance Flashcards
What procedures can you adopt to avoid disputes?
Clear contract documentation and written terms of engagement can be key to avoiding post contract disputes. Effective communication procedures and accurate record keeping can also be key in addition to issuing written correspondence to confirm the actions and decisions that are taken. Ensuring that agreed company and contractual procedures are followed is also key in addition to following RICS standards and professional guidance statements.
In your experience what are some common causes of disputes?
Common causes of disputes include:-
- Errors and conflicting information within tender documentation.
-Poorly defined change control procedures.
-Lack of knowledge & understanding of contractual obligations.
-Contract errors.
-Poor contract administration.
-Poor quality of workmanship.
-Delays to payments & non-payment of claims.
-Nonconformity of contractual obligations
What is mediation?
Mediation is a form of dispute resolution that is entered into by the consent of both parties. A third party mediator is appointed to resolve the dispute in question and assists in a supported negotiation to reach an acceptable outcome. Mediation is an informal process allowing parties to adopt a flexible approach in reaching an outcome allowing relationships to be maintained. The mediator has no legal authority or power to instruct either party to do anything and the process is not binding
What is litigation?
Litigation requires the dispute to be resolved through legal action and involves formal court proceedings. Litigation is thought to offer access to the most reliable and well thought out decision making. Judges can instruct that parties comply with the time frames required and impose sanctions if there are any breaches. Litigation often brings greater costs and can last between 12-18 month. Proceedings can be conducted in a public setting and can be damaging to the reputation of the unsuccessful party.
What is dispute resolution?
Actions and processes taken to resolve contractual disagreements between parties.
Name some formal methods of dispute resolution?
Arbitration
Litigation
Adjudication
What is conflict avoidance, and can you give me some examples of conflict avoidance procedures?
There is conflict avoidance process (CAP) – a government-endorsed procedure that can be written into contracts to help parties resolve disagreements.
Conflict avoidance – is methods to help parties resolve disagreements before they escalate to a dispute.
Conflict avoidance techniques include – good management, clear contract documentation, partnering and alliance, record keeping, regular reporting and proactivity, clear communication between all parties.
Name some conflict avoidance processes. Techniques that can be used to avoid conflict.
Good Management. Clear contract documentation. Partnering and alliancing.
Good Project Management. Good Client Management.
Good constructor management (objective, understanding of project, contract and programmes).
Good payment process. Record keeping. Regular reporting and proactivity e.g. minutes, progress reports etc.
What is conflict?
A serious disagreement or argument, typically a protracted one.
A serious incompatibility between opinions, principles or interests.
What would your considerations be prior to selecting a form of dispute resolution?
Cost of the DR in proportion to the claim being sought
Timescale involved
The impact of business relationship and reputation
Type of contract
What relevant legal statute’s imply in the country.
What is conciliation?
Process similar to mediation and relies on an independent 3rd party to aid reaching an agreement.
The conciliator has no authority to seek evidence or call witnesses and not able to make binding decisions.
Their role is to act primarily as the messenger and to encourage diplomacy.
The conciliator will evaluate the parties’ cases and make recommendations based on their view
Name some different forms of alternative dispute resolution?
Mediation, Conciliation and Negotiation
What is the difference between Conciliation and meditation?
The key difference between mediation and conciliation is that your mediator will facilitate a conversation, whilst a conciliator will intervene in a conversation to offer solutions. The roles are intertwined.
When would mediation be used?
Commonly used for lower value disputes as it is relatively cheap method of ADR and the parties involved usually share the cost.
What is negotiation?
The parties reach an agreement through an informal private or facilitated discussion.
Both parties will agree to settle the dispute either at a high level or in detail and agree to be bound by this settlement.
When would negotiation be used?
Negotiation is required at almost every stage of a project, from acquiring land and obtaining planning permission, to making appointments, awarding contracts, negotiating change orders and extensions of time, resolving disputes, and so on.
What is adjudication?
Statutory form of DRP available in the UK. Relatively simple and efficient method of resolving disputes without engaging in lengthy and expensive court proceedings.
Relies on an independent 3rd party who considers the claims of both parties.
A binding decision is made by the adjudicator which can be appealed either through litigation or arbitration.
Time sensitive with a decision being made within 28 days.
The Housing Grants, Construction and Regeneration Act 1996 (Construction Act) enforces the requirements for a building contract to contain provisions for adjudication. Adjudication apply to England, Scotland and Wales.
When would adjudication be used?
When there is a disagreement
Parties to a construction contract may be able to refer disputes to adjudication, a cheaper and quicker way of resolving issues.
Adjudication is designed to offer a quick cash-flow remedy during the process of a construction project.
Many smaller construction companies are often unable to afford to dedicate the time and money to court proceedings or arbitration. This leaves them without remedy if they have not been paid by (sometimes large) contractors. This is often means adjudication is an appropriate option.
What enforces the requirements for a building contract to contain provisions for adjudication?
The Housing grants, Construction and Regeneration Act 1996 (Construction Act).
What if a building contract does not contain provisions for adjudication?
Parties still have the statutory right to adjudication assuming the contract qualifies under the construction act.
Failing the scheme for construction contracts will apply in its entirety.
Please explain your understanding of the arbitration process?
To apply, arbitration must be in the contract.
Procedure under the control of the parties. Certain conditions must be met, for example a genuine dispute of difference between the parties must have occurred with an award being capable of enforcement.
A binding agreement must be reached to escalate the matter to arbitration.
During arbitration, a third party listens to both sides of a legal disagreement. With the documents provided and the oral statements of each person involved, the arbitrator will issue a resolution. Witnesses will sometimes be called in to provide an oral statement.
When would Arbitration be used?
Designed to be used to resolve issues without the need to go to court.
What are the +vs and -Vs of Arbitration?
An arbitration hearing can be dealt in just one week, in comparison to a final court hearing, which could take six months or even longer.
Arbitration can be a simpler, faster, more peaceful, and less expensive option than litigation
The proceedings are undertaken in a private setting meaning the reputations of both parties can be preserved to an extent
X If one party feels the decision is erroneous, there is very limited opportunity to correct it. There are many cases in which arbitration can become more expensive than court proceedings. Quality arbitrators can demand substantial fees that would not apply in court
Please can you explain the difference between arbitration and litigation procedures?
Arbitration is a form of dispute resolution which can be used to settle business disputes outside of court. This differs to litigation, which results in the Court imposing a binding judgement on the parties. Litigation is a last resort, as it is more formal, costly and time-consuming than arbitration.
What are the different adjudication techniques?
Expert determination
* Arbitration
* Litigation
* Dispute boards
What is Expert Determination?
Parties agreed by a contract that a 3rd party will make a binding decision if a dispute arises.
Common when true expertise is required (e.g. technical issues) or valuation issues where liability has already been determined
When is Expert determination used?
Common when true expertise is required (e.g. technical issues) or valuation issues where liability has already been determined.
What the +vs and -vs of Expert Determination?
+ Quick and cheap. Useful where the construction act does not apply. Confidential process.
-No statutory back up. Limited grounds for appeal.
What is Litigation?
Taking a dispute to a court of law
When a dispute gets referred to the County Court or the Technology and Construction Court (TCC) if the dispute is under £250,000 court used will always be a County Court.
What is pre-action protocol?
The Pre-Action Protocol for Construction and Engineering Disputes governs parties’ conduct before the issuing proceedings.
The aim is to encourage parties to a dispute to set out their respective cases and exchange sufficient information in order that they understand each other’s position.
In turn, this should allow the parties to try and narrow the issues in dispute, make an informed decision about the potential for settlement or how they might seek to resolve the matter without starting proceedings; for example, through the use of alternative dispute resolution (ADR).
