Conflict Avoidance and Dispute Resolution Flashcards
What are the main causes of disputes?
- Errors and/or omissions in the management of the contract
- Failure by an employer, contractor or subcontractor to understand or comply with detailed contractual obligations
- Submission of poorly drafted, flawed and/or unfounded claims
- Contradictory priorities of contracting parties
- Poorly communicated design information and/or employer requirements
How do you best avoid conflict on your projects?
- well drafted contracts
- include Conflict Avoidance Panel (CAP) clause
- clear and accurate scope/employer requirements
- robust and reliable record keeping, including written and visual records
- excellent communication between the parties / early warning system
What dispute resolution clauses do you have on your contracts?
A46 project - NEC4
- Early Warnings (clause 15)
- Option W2
South Norfolk - JCT CM/A - 2016 - Section 9 - settlement of disputes
- Supplemental Provision 1 = Collaborative Working (“spirit of mutual trust and respect”)
- Mediation - clause 9.1
- Adjudication (Article 5 / clause 9.2)
- Arbitration (Article 6 / 9.3) - not selected
South Norfolk - JCT CM/TC - 2016 - Section 9 - settlement of disputes
- same as above except articles / supplemental provisions differ.
How does W2 work in the NEC4?
W2 used when HGCRA Act 1996 applies
W2.1 - Senior Representatives seek to resolve. If not referred to Adjudicator.
- Within 1 week: each party issuing statement no more than 10 sides A4
- Within 3 weeks parties attend meetings and use procedures necessary to resolve dispute
- Senior reps produce list of agreed/disagreed. Contractor/Subcontractor put into/affect agreed items
- No evidence of the statement of discussions is used, referred and disclosed before Adjudicator.
W2.2 - dispute referred to adjudicator (doesn’t have to go by Senior Representatives first)
- (3) Parties appoint the Adjudicator under NEC Dispute Resolution Service Contract
W2 .3 - The Adjudication
- (1) If Adj named in Contract Data refering party sends notice and Adj informs within 3 days if can act or resigns.
- (2) If Adj not named or resigned party referring party refers for adjudication within 7 days of notice of adjudication
- (8) If Adj awards time/cost is assessed same as if CE - payment due within 7 days of decision
- (9) Adj decides within 28 days of referral
- (11) If Adj doesn’t inform in timeframe, Parties and Adj can agree to extend. No extension either Party may act as Adj resigned.
- (12) Adj decision binding unless challnenged in the times shown in contract and refers to tribunal
What is the RICS dispute resolution service?
RICS Dispute Resolution Service (DRS) is the worlds oldest and largest provider of alternative dispute resolution (ADR) services in the land, property and construction industries.
Over the last four decades, DRS has appointed dispute resolvers in nearly a quarter of a million cases. Internationally, DRS resolves around $2 billion US dollars worth of disputes every year keeping these cases out of the courts.
What is a CAP = Conflict Avoidance Panels
Conflict Avoidance Panels (CAPs) designed to encourage
cooperation and resolve differences early, without the need for court,
arbitration or adjudication.
mechanism enables parties to
avoid and control disputes, and it is underpinned by relationship
management which includes incentives to encourage cooperation.
The process involves an early review of issues where the parties have
acknowledged that there is disagreement. The review is undertaken by
an independent panel, the CAP, which provides non-binding
recommendations. A CAP usually consists of one or three
professionals, who are highly qualified in the subject matter at the heart
of the issue and are experienced in a range of dispute resolution and
conflict avoidance procedures.
What is the Conflict Avoidance Pledge (CAP)
Initiated the Conflict Avoidance Coalition Steering Group
- Includes RICS, Network Rail, TFL and others
Driving a sea-change and embedding conflict avoidance mechanisms to avoid and manage conflicts, to reduce the financial cost of disputes (measured in £Billions)
Also has a toolkit.
What are the key timeframes for Adjudication?
- Notice of Adjudication issued
- Within 7 days - Adjudicator must be appointed
- Within 7 days (Adjudication Day 0) - Referral notice issued
- Within 28 days of referral notice - Adjudicator awards.
- Within 35 days Compliance with Award.
- Decision is binding until determined otherwise in court or Arbitration
- Periods can be extended by 14 days by referring party or longer if all parties agree.
- Adj can correct minor errors (Slip Rule) under Section 103 (3A) of Construction Act.
Explain Slip Rule
Adjudicator Correcting clerical or typographical error within 5 days of award.
UK construction law requires construction contracts to “include provision in writing permitting the adjudicator to correct his decision so as to remove a clerical or typographical error arising by accident or omission”.
Under the Scheme for Construction Contracts (as amended), which applies where a construction contract does not comply with the requirements of the Construction Act, the following provisions are implied:
- The adjudicator may on his own initiative or on the application of a party correct his decision so as to remove a clerical or typographical error arising by accident or omission (paragraph 22A(1)).
- Any correction of a decision must be made within five days of the delivery of the decision to the parties (paragraph 22A(2)).
- As soon as possible after correcting a decision, the adjudicator must deliver a copy of the corrected decision to each of the parties to the contract (paragraph 22A(3)).
- Any correction of a decision forms part of the decision (paragraph 22A(4)).
What are the three pillars of negotiation? (NMCA)
(NMCA)
Negotiation – Problem solving between the parties
Mediation - Third party intervention facilitates discussion/impartial - non binding
Conciliation – Third party intervention / offers solutions (disputing parties normally meet conciliator alone) - non binding,
Adjudication - Third party intervention binding decision.
What is the scheme for construction contracts?
It is secondary legislation that essentially provides adjudicative rights to parties of a contract that do not comply with the requirements of the construction act.
Advantages of using dispute boards / Conflict Avoidance Panels?
A
* Confidentiality Any disputes and decisions will remain confidential.
* Expertise Members of the Dispute Board will have been selected for their knowledge and expertise before a dispute has arisen.
* Flexibility Parties can agree the procedure in advance and can agree any changes to it during the course of the project.
* Prevention of Disputes The existence of the Dispute Board can prevent disputes escalating because Parties are reluctant to be seen making frivolous claims. This is an incentive for the Parties to reach a negotiated settlement between them.
* Relationships Dispute Boards can help to preserve relationships, as the process is consensual and all Parties are invested in the process.
* Understanding The Dispute Board will gain a good working knowledge of the project as they will undertake regular site visits and create a relationship with team members. When a dispute arises, the Board will have a much better understand than a Tribunal, for example, which would only be appointed after a dispute has arisen.
Can you name some of the RICS approved ADR / Ombudsman bodies ? Where would you find this information ?
- Centre for Effective Dispute Resolution
- The property Ombudsman
- The property Redress Scheme
- Financial Ombudsman Service
- Local Government Ombudsman
- Adjudicators Office
Contained within the RICS Guidance Note - ‘Complaints Handling’ 1st Edition 2016
Talk me through how you would go about negotiating something?
- I would prepare, as understanding you points fully is critical
- I would pre-determine what I/my client is prepared to give away, know my bottom line
- Focus on the bigger picture, don’t get stuck on one item
- Try to negotiate a win/win situation
What statute does Arbitration sit under?
The Arbitration Act 1996
