Conflict Avoidance And Dispute Resolution Procedures

Question 1

What are the basic categories of how construction disputes arise?

Answer 1

Behaviours, risk / uncertainty and contractual issues

Question 2

What is the role of a QS under this competency?

Answer 2

• Ambiguity - to seek clarity in any documents
• Risk - to identify risks that should be brought to the client’s attention, and assist the client in the management of these risks
• Professional Management - to manage the day-to-day or regular conflicts, disagreements and causes of dispute that arise in respect of property and construction matters
• Recognition & Awareness - to recognise the escalation of disputes and keep the client informed
• Understanding - to understand in outline the range of dispute resolution techniques that are available
• Application - to know and understand the applicable dispute resolution technique or techniques that apply in respect of any contract or contracts in which the surveyor is advising
• Responsibility - to recognise when more specialist assistance is required and advise the client accordingly

Question 3

What is conflict avoidance?

Answer 3

A process to try and avoid a dispute from occurring

Question 4

Give some examples of conflict avoidance

Answer 4

Good management

Clear contract documentation

Partnering and alliancing

Good project management

Good client management

Good constructor management

Good design team management

Good payment practice

Record keeping

Regular reporting and proactivity

Question 5

What are the three pillars of dispute resolution?

Answer 5

Negotiation – the problem-solving efforts of the parties themselves

Mediation (or conciliation) – a third-party intervention does not lead to a binding decision being imposed on the parties; and

An adjudicative process – the final outcome is determined by a third party who does impose a binding decision on the parties.

Question 6

What is adjudication? How was it introduced to the construction industry?

Answer 6

Adjudication is a contractual or statutory procedure for swift interim dispute resolution, provided by a third party adjudicator selected by the parties to the dispute.

Adjudication was introduced in 1998 under section 108 of the Housing Grants, Construction and Regeneration Act 1996 (HGRCA).

Question 7

What is the process of Adjudication?

Answer 7

1) The process begins when the party referring the dispute gives written notice of the intend to go to adjudication
2) Within 7 days of this an adjudicator must be appointed.
3) Within 7 days of this the referring party must serve a referral notice which sets out the detail of the case and the supporting documentation.
4) Within 7 days of the referral notice being submitted by the referring party the opposing party must issue their response – this can be extended to 14 days.
5) Overall from the referral notice there is total period of 28 days in which the response from the other party is due and the adjudicators decision is due – this can be extended by a further 14 days with agreement between both parties.

Question 8

Is Adjudication Binding?

Answer 8

Adjudication decisions are binding unless and until they are revised by arbitration or litigation. There is no right of appeal and limited right to resist enforcement.

Question 9

Who pays the legal costs for adjudication?

Answer 9

Award of legal costs is at the discretion of the adjudicator unless this is excluded by the terms of the contract.

Question 10

What are the advantages of Adjudication?

Answer 10

1) The parties can select the expert or the characteristics of the expert
2) The expert can act as an investigator
3) Seldom lengthy oral arguments or legal submissions
4) No cross examination or formal evidence
5) Streamlined, speedy and flexible procedures as agreed between the parties
6) Less expensive

Question 11

What are the disadvantages of Adjudication?

Answer 11

1) The expert cannot go beyond the jurisdiction specified in the contract
2) The expert determination is not supported by statute
3) The expert powers are limited
4) The expert’s determinations must be enforced by commencing court proceedings
5) Timeframes can be limiting

Question 12

What is mediation (and conciliation)?

Answer 12

involves a neutral third party (the mediator) whose primary role is to assist the parties in reaching a negotiated solution.

As a facilitator, the mediator manages the negotiation process, helping the parties overcome deadlocks and encouraging them to think creatively about solutions.

They encourage the parties to reflect realistically upon their position and the consequences of failing to reach a negotiated solution.

Question 13

What’s the difference between mediation and conciliation?

Answer 13

The mediator does not come up with a solution whereas a conciliator does

Question 14

What is litigation?

Answer 14

Litigation is the process of engaging in or contesting legal action in court as a means of resolving a dispute.

Question 15

What are the advantages of Litigation?

Answer 15

1) Generally regarded as the highest quality decision making
2) Judges can compel the parties to comply with time frames and have powers of sanctions for non-compliance
3) Judges have the power to make orders to provide interim relief to
protect a party’s position pending the final judgement
4) There are defined rights of appeal in cases where errors of fact or law are made

Question 16

What are the disadvantages of Litigation?

Answer 16

1) Potentially greater costs if the dispute is not well managed or the other party seeks to delay the proceedings. It can last between 12 - 18 months.
2) Potentially longer time period to obtain a judgment
3) Proceedings are generally conducted in public – could cause reputational damage
4) Judgment will be subject to appeal

Question 17

What is arbitration?

Answer 17

Arbitration is a private, contractual form of dispute resolution. It provides for the determination of disputes by a third-party arbitrator or arbitration panel, selected by the parties to the dispute.

Question 18

What are the advantages of Arbitration?

Answer 18

1) It is private - there is no public record of any proceedings, although not necessarily confidential
2) Speed, although this depends very much on the manner in which the arbitrator conducts the arbitration
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 19

What are the disadvantages of Arbitration?

Answer 19

1) The parties must bear the costs of both the arbitrator and the venue
2) Sometimes arbitration simply mimics court processes and so you do not get the advantage of informality and speed
3) Limited powers of compulsion or sanction if one party fails to comply with directions of the arbitrator, which can significantly slow down the process
4) The arbitrator has no power to make interim measures, such as for the preservation of property
5) Limited appeal rights

Question 20

What is an Expert Witness?

Answer 20

Your primary duty as an expert witness is not to a client but to the tribunal; your expert witness report and evidence given must be your independent and unbiased views

Question 21

What are Dispute Boards?

Answer 21

Dispute boards sit somewhere between avoidance and dispute resolution. Their genesis is in Dispute Review or Recommendation Boards (DRBs).

• Three dispute board members are appointed at the start of a project.
• They become familiar with the project by reviewing some of the project documentation and also regularly visiting the site during the course of the works.
• If any issues arise they can be asked for their non-binding recommendation.
• This may relate to general disagreements or disputes.
• Often their recommendations are used to resolve disputes between the parties, thus avoiding formal disputes.

Question 22

What are Dispute Adjudication Boards (DABs)?

Answer 22

DABs make formal written decisions which bind the parties in respect of any disputes that arise. There is therefore a clear distinction between a DRB and DAB. Generically they are called DBs.

Question 23

What is a combined dispute board?

Answer 23

Developed by the International Chamber of Commerce (ICC). The ICC’s Combined Dispute Board (CDB) procedure provides for recommendations or decisions. The parties may request the dispute board to deliver
either a recommendation or a binding decision. If the parties cannot agree then a dispute board can decide whether simply to issue a non-binding recommendation or a written binding decision.

Question 24

What is Alternative Dispute Resolution (‘ADR’)?

Answer 24

refers to processes which are alternatives to the traditional binding dispute resolution procedures of litigation and arbitration. It is alternative in the sense that it is providing a faster and more economic dispute resolution procedure.