Conflict Avoidance and Dispute Resolution Flashcards
(27 cards)
Why do conflicts occur?
Failure of a party to comply with their contractual obligations (could be performance, quality, late payment)
Differing interpretations of a contract
Failure of a party to meet their lease obligations
Errors in the management or design of a project
What is dispute resolution?
A procedure which aims to resolve conflicts between parties
How can disputes be avoided?
Managing risks and expectations
Acknowledging early warning signs and acting on them
Partnering technqiues
Clear and defined client briefings
Good payment practise
Thorough contractor selection and tendering process
Regular reporting
What are the different forms of Alternative Dispute Resolution (ADR)?
- Mediation
- Conciliation
- Negotiation
- Independent expert determination
Why would you consider an Alternative Dispute Resolution?
Previous attempts at resolving the dispute have failed
ADR can offer a faster route to a resolution
The process is confidential and will be led by an expert
It may cost less than a form methods of dispute resolution such as litigation
What are the formal methods of dispute resolution?
- Arbitration
- Litigation
- Adjudication
What would your considerations be prior to selecting a form of dispute resolution?
Cost of the DR in relation/proportion to the claim being sought
Timescales
Impact on business relationship (is there historical animosity or conflict) and reputation
What is Mediation?
A confidential and informal process where a neutral party facilitates negotiations between the parties
This process encourages the parties to come together and reach an agreement
Not legally binding
What is Conciliation?
Similar to mediation, although a conciliator is also required to express their opinion on the dispute
The conciliators decision is not binding and their main role is to encourage diplomacy
It allows parties to address disagreements without damaging their relationship
The conciliator can not call witnesses or seek further evidence
What is Negotiation?
Negotiation is where 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
Negotiation involves the parties agreeing a resolution between them
It is cheap, quick, and if agreed can be binding. It’s a win win, if the parties can agree to negotiate in good faith
What is independent expert determination?
An independent expert is appointed by the parties to give an expert opinion on the dispute
Depending on the terms of the contract/lease, they may be required to consider evidence from the parties’ representatives, may have to give a reasoned determination and may have power to determine part/all costs
An expert’s determination can be legally binding like an arbitrator’s award and they are liable for negligence
Why do negotiations break down?
Money - unpaid rent, invoices or construction contract payments
Delays - in construction or in responding to other parties
Defects - professional neglience or smaller issues like snagging
Emotions/clash of personailities
Differences of professional opinion - evidence can be interpreted in different ways
Historical context
What is Arbitration?
Arbitration is private process governed by the Arbitration Act 1996 - a third party receives written evidence or verbal evidence at a hearing from the parties’ representatives and makes a legally binding decision
The arbitrator has powers of discovery (calling for disclosure of documents or witnesses to give evidence) and has power to award all costs
There are limited grounds of appeal against an Arbitrator’s award and they are not liable for negligence
What is Litigation?
This is the process of parties taking legal action through the Courts, defined by the Civil Procedure Rules
Litigation is a public process so it is not possible to preserve confidentiality
Out of Court settlements may be agreed at the last minute to avoid further costs, based on the relative risks of the dispute
What is Adjudication?
A statutory UK dispute resolution procedure with a timeframe of 28-42 days, which is akin to a simple arbitration
It reaches an interim binding decision until the dispute is finally determined by another process such as litigation, arbitration or mutual agreement
What could indicate the success of a negotiation on a final account?
Both parties are satisfied with the outcome and feel that a fair and reasonable compromise was reached
A partnering approach is adopted with both parties feeling as though their long-term relationships and reputations have been maintained
What enforces the requirement for a building contract to contain provisions for adjudication?
It was introduced in the Housing grants, Construction and Regeneration Act 1996 (Construction Act)
Which contracts does adjudication apply to?
It applies to all construction contracts entered into after the act commenced within England, Scotland and Wales
What are the implications 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 this the Scheme for construction contracts will apply in its entirety
Please explain your understanding of the arbitration process?
Arbitration is a procedure for the resolution of disputes which is under the control of the parties
Certain conditions must be met for example a genuine dispute or 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
The proceedings are undertaken in a private setting meaning the reputations of both parties can be preserved to an extent
Can you explain the differences between arbitration and
litigation procedures?
Arbitration
Governed by the Arbitration Act 1996
Both parties need to agree to arbitrate
Parties have a wide degree of discretion as to how the proceedings are conducted
Procedures are similar to litigation with formal submissions by both parties, expert evidence, hearings and a decision by the arbitrator
It is a private process
Litigation
Litigation differs in that proceedings are conducted in court
It is a public process that follows civil procedure rules
Despite having high costs the process can deal with multi-party disputes and civil procedure rules which aim for accessibility, speed and efficiency
What is the role of the RICS in dispute resolution?
RICS runs the Dispute Resolution Service, which is the largest provider of ADR services
RICS provides professional guidance on dispute resolution
What does the use of an Ombudsman involve as a dispute resolution procedure?
Using an Ombudsman involves the use of an organisation to confidentially review, investigate and facilitate the resolution of a complaint
It has strict timescales, 6 weeks to review, then 28 days to reply
Financial awards available up to £25,000
Can then go to court if parties are unsatisfied
What are the main themes contained within the RICS Guidance Note on Conflicts of Interest and Dispute Resilution 2016?
The GN is mainly aimed at those appointed to act in a dispute
The main themes are independence and impartiality
Every dispute resolver should be, and be seen to be, impartial at the time of accepting an appointment and remain so throughout all proceedings
