Conflict Avoidance and Dispute Resolution Flashcards
How can you avoid conflict in the first place?
- Having clearly written tender/contract documentation
- Ensuring effective communication
- Putting things into writing (meeting minutes)
- Follow company policy
- Follow RICS rules of conduct
If a conflict arises, how do you deal with it initially?
Raise the issue with all relevant parties and try to solve the issue through communication and negotiation. Usually face to face.
What are some causes of disputes in construction?
- Commercial disagreements
- Unclear spec/drawings
- Teams under pressure
- Insufficient/unclear contract terms
- Unclear scope of service
What is dispute resolution?
A term that refers to several processes that can be used to resolve a conflict, dispute or claim
What is ADR?
Alternative Dispute Resolution. Generally refers to DR processes that are different to the traditional binding procedures of arbitration and litigation.
What are the main forms of ADR?
Negotiation
Conciliation
Mediation
Adjudication
What is the TCC?
Technology and Construction Court
- Handles disputes, usually those worth >£250k (unless good reason), associated with buildings, engineering and surveying
What is mediation?
Parties agree on a third party independent, neutral system to facilitate discussions between the parties with the goal of reaching a settlement. Power remains with parties, but process lead by mediator.
Non-binding.
What is conciliation?
RICS definition states it is the same as mediation. However some definitions state it is the same as mediation, however the conciliator gives recommendations. If neither party disagrees with recommendation then decision is binding.
Evaluative mediation vs facilitative mediation?
Evaluative - mediator learns facts from both sides and offers their view (more like conciliation)
Facilitative - mediator does not express opinion, but facilitates discussions by asking questions (most common)
Transformative - parties themselves control the procedure and decide outcomes.
What is negotiation?
The process whereby parties work out between them how to resolve issues that have arisen. Negotiation ends when parties have an agreement. Useful for simple matters.
What is an expert witness?
A person who’s experience or knowledge is beyond that of a typical person. They make their knowledge available to a court, to help it understand an issue before a decision is made.
What is expert determination?
The process whereby the parties agree to refer their disagreement to an independent third party expert, who will make a binding decision. Ideal for technical disputes.
Advantages of expert determination?
- Less adversarial
- Confidential
- Time and cost efficient
- Parties remain in control
What is adjudication?
A contractual/statutory procedure which allows for swift dispute resolution. A third-party adjudicator is appointed to provide resolution to conflict.
Describe the process of adjudication?
- One party serves notice on other for the intention to refer to adjudication.
- Within 7 days the referring party must serve a referral to the other. Void if not in 7 days.
- Referral contains an explanation of claim and supporting information
- Within the 7 days, the referring party must secure an adjudicator. Either a person named in the contract or nominated by a body identified in the contract.
- Adjudicator issues timetable, which allows other party to respond to referral.
- Adjudicator must make decision within 28 days.
Describe the process of adjudication?
- One party serves notice on other for the intention to refer to adjudication.
- Within 7 days the referring party must serve a referral to the other. Void if not in 7 days.
- Referral contains an explanation of claim and supporting information
- Within the 7 days, the referring party must secure an adjudicator. Either a person named in the contract or nominated by a body identified in the contract.
- Adjudicator issues timetable, which allows other party to respond to referral.
- Adjudicator must make decision within 28 days.
- Can be extended by 14 days by referring party, any further extension must be agreed by both parties.
Is adjudication binding?
Decision is binding (no right of appeal) unless revisited by arbitration or litigation.
Is there an appeal process associated with adjudication?
No, however parties can take the same dispute to arbitration/litigation
What is a contract contains no provisions for adjudication?
The Construction Act legislation enforces adjudication as a legal right in relation to construction contracts.
Who pays for adjudication?
Award of legal costs is at the discretion of the adjudicator unless excluded by the terms of contract.
What are the exclusions of adjudication?
S106 excludes it for parties to a contract who are residential occupiers carrying out work on their residence.
What is arbitration?
A process whereby disputes are heard by an agreed third party in a private tribunal
How do parties refer to arbitration?
Parties can agree to arbitrate when a dispute arises, however it is common for the contract to have a written agreement to arbitrate in the event of a dispute.
Who appoints an arbitrator?
It may be agreed by the parties or, a parson to appoint an arbitrator may be agreed.
What does an arbitrator do?
They issue a decision as to the parties rights and obligations and such decision is legally binding to all parties.
Can arbitration be overturned?
Yes, it can be overturned by litigation but only in exceptional circumstances i.e., fraud.
What does the arbitration act 1996 do?
- Ensures arbitration is fair, cost effective and quick
- Promotes party autonomy
- Ensures courts have supportive powers
- Ensures user friendly language which is easily accessible
- Follows the model law where possible
Advantages of arbitration?
- Private (no public record like litigation)
- Quick (compared to litigation)
- Can agree an arbitrator with relevant expertise
Disadvantages of arbitration?
- Parties must bear cost of arbitrator and venue
- Limited appeal rights
What are the three types of arbitration?
Documents only
Short hearing
Full procedure
What is documents only arbitration?
- Arbitrator decides outcome solely on documents provided by the parties.
- Used where there is no dispute over the facts so doesn’t warrant a hearing
- Loser bears the costs
What is short hearing arbitration?
- Both parties exchange documents and supply to the arbitrator 7 days before the hearing. Hearing is a 1 day event that happens no later than 21 days after form of arbitration decided.
- Arbitrator decided who bears the cost
What is short hearing arbitration?
- Both parties exchange documents and supply to the arbitrator 7 days before the hearing. Hearing is a 1 day event that happens no later than 21 days after form of arbitration decided.
- Arbitrator decides who bears the cost
What are CIMAR?
The Construction Industry Model Arbitration Rules.
Drafted to comply with the arbitration act. Adopted by JCT as the rules of arbitration under any JCT contract.
- Distinguishes 3 types of arbitration
What is litigation?
Where one party commences claim in the civil courts.
What is the process of litigation?
- TCC fix date for first case management conference
- Case management conference
- Pre trial review
- Trial
What happens at the case management conference (litigation)?
- Judge issues direction on proceedings up to trial
- Court considers whether expert advice is needed
- Question of witness statements
- Disclosure of documents
- Order of inspection and site visits
What is a pre trial (litigation)?
Court will look to see if previous direction has been complied with
Gives further direction required to ensure case will be ready to start on fixed say of trial
What are the disadvantages of litigation?
- High cost
- Longer period for judgement
- Public hearing
- Judgement subject to appeal
What are the rules of mediation?
1) Mediation is voluntary - parties can leave/mediator can stop process at any time
2) Mediation is without prejudice - nothing said in the process can be used in any future formal litigation process
3) Mediation is confidential
What is smash and grab adjudication?
Adjudication seeking payment on the basis that a contractual payment mechanism has not been fulfilled - typically a payment notice/pay less notice.
The employer would then have to pay the full sum on demand of the contractors AFP.
What is smash and grab adjudication?
Adjudication seeking payment on the basis that a contractual payment mechanism has not been fulfilled - typically a payment notice/pay less notice.
The employer would then have to pay the full sum on demand of the contractors AFP.
ISG v Seevic
Overturning of smash and grab?
If the claim is over valued then they the paying party can refer to true value adjudication. They must first pay before they can refer.
Grove Developments v S&T UK
What is CEAS?
Construction and Engineering Arbitration Service
RICS run arbitration service that is designed to allows disputes to be referred to independent, highly qualified individuals with extensive expertise.
What are the two levels of arbitration offered under CEAS?
Fast track - alternative to county court, for values <£100k.
Select arbitration - alternative to TCC to determine high value complex disputes.
JCT contract and disputes?
Mediation - clause 9.1 states that if a dispute arises both parties should give serious consideration to mediation, but it is not a requirement.
Adjudication - clause 9.2 states that if a dispute arises either party is able to refer to adjudication (Same as NEC)
Arbitration - stated in CPs whether article 8/clause 9.3-9.8 apply. Can be excluded
Litigation - Seen as default position of JCT as it is what is used parties do not agree to ADR. Cannot be excluded as it is common law.
What is a conflict?
A disagreement between two or more parties, usually between two parties to a contract.
Is a conflict bad for a project, why?
Yes, they are detrimental to projects generally. Projects are successful when team members work collaboratively towards a common goal.
What are the three pillars of dispute resolution?
- Negotiation
- Mediation
- Adjudicative processes (ex det, adju, arbit, liti)
A client asks to remove adjudication from a contract, what do you say?
The right to adjudication is statutory under the Construction Act. If removed, parties still have this right.
What document would you refer to in arbitration proceedings?
The contract and any contract insttructions, correspondence and information shared between parties.
CIMAR
What is partnering?
Co-operative relationship between business partners to improve performance in delivery
How does the construction act reduce conflcit?
- Right to periodic payments
- Right to adjudication
- Right to suspend work on non payment
- Suspension of pay when paid clauses
What is a DRB?
Dispute Review Board - issue formal and written recommendations to parties to act in such or such manner to settle their dispute. Not immediately binding, if nobody notifies disagreement with the recommendation within 30 days, it becomes binding. Cannot be challenged by a judge or arbitrator.
What is a DAB?
Dispute Adjudication Board - issues formal and written decisions in the case of dispute between parties. Unlike DRB decisions are immediately binding. Can be challenged by arbitration.
What is a CDB?
Combined Dispute Board - Normally issue recommendations, but it can, at the request of one or both parties issue decisions. Can be challenged before a judge or arbitrator (both decisions and recommendations)
