Conflict Avoidance and Dispute Resolution Flashcards
What is a dispute?
A dispute is a disagreement between parties over an issue (which can lead to a conflict)
What is the cause of most disputes?
Time Constraints – delays, extension of time, L&E
Cost – Commercial, overspend, provisional sums
Contractual – disputes over clauses, roles and responsibilities
Quality – Insufficient design information, unclear or conflicting drawings
Changes
How can conflict be avoided?
Good management
Clear communication
Clear contract documentation
Collaboration
Regular Reporting
Following Procedures and processes
Following RICS Standards
Risk Management
Record keeping
If conflict occurs, how do you deal with it initially?
Raise the issue with all parties, and try to resolve through communication and negotiation
A face-to-face meeting is the best way to find a resolution
Explain a time you have managed a conflict well?
On Harwell Quad Three, I had agreed for the obstructions tracker and process to be agreed in the contract.
The Project QS, was not aware that this was included in the contract and therefore had been claiming for obstruction removal costs not in accordance with the contract (i.e. recorded photo’s, drawings and volumes excavated)
Upon discussion, I outlined this process again to them and they understood why I had initially declined the basis of their original substantiation.
Following this, they issued all the relevant information, and I was able to agree the basis of the obstruction being added to the formal tracker.
How does risk management reduce conflict / dispute?
Risk management helps reduce conflict by actively managing risk before they become an issue. It puts in place mitigation measures to reduce the likelihood and impact of a risk happening.
How do early warning systems help reduce conflict?
Early warning systems used on NEC contracts. It provides a mechanism for identifying project risks that have the potential of impacting the project (mainly regarding time and cost)
How do partnering techniques help reduce conflict?
Working collaboratively. Pain / gain. Working together to reach the best outcome
What is conflict avoidance?
Conflict avoidance is the process of taking steps or implementing measures to prevent a dispute or conflict arising.
Can the RICS help regarding dispute resolution?
The RICS conflict avoidance process (CAP) is a contractual mechanism, which helps parties to avoid getting into pro-longed and damaging disputes. It is used to resolve conflicts early and protect reputation.
CAP enables someone (a professional CAP advisor) who is a third party neutral (could be appointed by RICS) to come in and give the parties their knowledge, advice and recommendation.
Non-binding – but parties can use the recommendation as a basis to arrive at a settlement.
What is the CAP process?
The parties to the contract identify an issue which has the potential to grow into a dispute and agree to seek out the intervention of CAP to help resolve it
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The parties to the contract identify an issue which has the potential to grow into a dispute and agree to seek out the intervention of CAP to help resolve it
One or both parties request the appointment of a suitably experienced or qualified CAP member by the RICS ((and will complete a Dispute Resolution Service (DRS) application form))
Within 5 days of appointment, the CAP member will contact the parties to set out how they will proceed / what information they require
CAP member will aim to complete the full process within 28 days of appointment
How much does the CAP process cost?
Average cost of £12k per dispute / query
Compared to between £50k-£500k for adjudication
Can you initiate the CAP process even if its not in the contract?
Yes if both parties agree then it can still be considered (even if the clause was not included in the contract)
How can a client brief affect conflict avoidance?
The clearer and more robust the client brief, the reduced likelihood of error or misinterpretation
If the employer sets out clear employer requirements, then the contractor has clear objectives to work towards and there is no ambiguity
What could initiate the success of a final account negotiation?
Costs agreed and within the client budget
Negotiation resolved in a timely manner
All parties come away happy with the outcome and relationships are maintained
What do you do if negotiation breaks down and the matter cannot be resolved?
Consider an ADR (alternative dispute resolution) to resolve the dispute
How have you delivered bad news to a client?
What has gone wrong?
Why?
Impact?
What am I doing about it (best vs worst vs likely outcome)
What is the RICS Conflict Avoidance Pledge?
The RICS conflict avoidance pledge is a promise or commitment that a number of organisations have signed up to.
By signing the pledge, the organisations are showing that they are committed to avoiding conflicts and to facilitate the early resolution of potential disputes.
What happens when a company signs the pledge?
The company will be listed on the Conflict Avoidance Directory (Bronze, Silver & Gold)
What are the benefits of the pledge?
Becoming a pledge signatory signals to clients and suppliers that
- You are a good business to work with
- Focused on maintain good business relationships, dealing with problems early and amicably
What is a dispute resolution?
Dispute resolution is a term that refers to several processes that can be used to resolve a conflict, dispute or claim.
What are the three pillars of dispute resolution?
Negotiation
Mediation
Adjudication
What are the two types of dispute resolution?
Alternative Dispute Resolution
Orthodox dispute resolution
What is an alternative dispute resolution?
Alternative dispute resolution is a process whereby the parties to the dispute attempt to resolve matters without using the courts
Encourages parties to talk to each other and preserve working relationships
ADR is non-binding (unless agreed to be)
What are the main forms of ADR?
Negotiation
Mediation
Conciliation
Arbitration
Adjudication
Expert Determination
Benefits and risks of ADR?
Benefits
- Encourages the parties to talk to each other
- Preserves working relationships
- Helps the parties focus on the real matter of the dispute
- Avoids legal costs
Risks
- Non-binding outcomes can be challenged through an orthodox process
- Still can cost money (adjudication)
What is orthodox dispute resolution?
Orthodox resolution is a process whereby the settlement agreement is made by a third party, and it is final and binding.
What is negotiation?
Negotiations are informal discussions between parties on the core issues of the dispute with a view to resolving them on agreed terms.
Relies upon the parties finding common ground, make compromises
What are the advantages and disadvantages of negotiation?
Advantages:
Very Flexible
Reputations and relationships can be maintained
Relatively quick and cost effective
Disadvantages:
Non-binding
Requires high level of trust
Negotiations may not lead to a result
What are the two main approaches to negotiation?
Competitive - One party aims to get the best deal possible
Collaborative - Seeks a win-win situation
What is mediation?
Mediation is a process whereby the parties agree on and appoint an independent, neutral third-party to facilitate discussions between them
What are the advantages and disadvantages of mediation?
Advantages
Mediation is less expensive than other techniques
Flexible and creative
Private and confidential
Disadvantages
Any agreements are non-binding
Informal
Some disputes may be outside the scope of the mediation process
When would you use mediation?
During construction to resolve a dispute. If negotiation has not worked then mediation is a reasonable option.
What guidance is there on mediation?
The JCT publish guidance on mediation
RICS Dispute Resolution Guidance Note
What is conciliation?
Conciliation is a similar process to mediation, a natural and independent conciliator is appointed to facilitate a settlement between the parties
Conciliators plays a relatively active and direct role in the actual resolution of a dispute. They will advise the parties on certain solutions by making proposals for settlement.
The final recommendation is final and binding. (if the parties agree for it to be)
What are the advantages and disadvantages of conciliation?
Advantages
Conciliator is normally a legal expert in the disputed field in question
Private and confidential
Less expensive than other “binding” techniques
Disadvantages
Not legally binding
Voluntary
Can be too informal for some disputes
What is the difference between Mediation & Conciliation?
Mediation - Mediator acts as a facilitator to help the parties come to an agreement.
Conciliation - Conciliator acts as a facilitator but plays a more direct role in the solution of the dispute. Develops and proposes the terms of the settlement.
What is adjudication?
Adjudication is a dispute resolution process whereby an adjudicator is appointed to review evidence submitted by disputing parties to come to a decision and determine the outcome of the dispute.
The Housing Grants Construction and Regeneration Act 1996 made it mandatory for adjudication to apply to every construction contract
What changes to adjudication did the LDEDCA 2009 make?
Adjudication clauses must be in writing, otherwise the Scheme for Construction contracts applies (Part 1 = adjudication, part 2 = payment)
It is no longer allowable to define within a contract who should bear the cost of adjudication. Parties should share the cost of the adjudicator’s fees, and the expenses associated with the process in equal proportions.
Slip rule – Adjudicators have the right to correct errors in their decisions within 5 days of delivering that decision
Who pays adjudication fees?
The construction act generally calls for the parties to share the costs of the adjudicator’s fees.
However, the adjudicator can determine that a party is liable to contribute to their fees and expenses in unequal proportion if in the adjudicators view, the claimants claim, or the respondent’s response was without substantial merit or acted in an improper management.
What are the advantages and disadvantages of adjudication?
Advantages
Decisions are made in private and are confidential
A decision will be made in 28 days unless agreed otherwise
Disadvantages
Sometimes the 28 day period is not enough for a complex dispute
Decisions can still be turned over by litigation or arbitration
The short time frame can lead to incorrect decisions
More costly than other forms of dispute resolution.
What are the timescales for adjudication?
Notice of adjudication - Referring party sets out key information such as the details of the party, the contract and the nature of the dispute.
Adjudicator appointed - within 7 days of the notice
Referral notice - within 7 days of the notice (sets out the referring party’s case with supporting evidence and documents
Response - within 7 days (can be extended to 14 days)
Decision - 28 days from the Referral notice. Binding unless it is challenged by litigation or arbitration.
What is arbitration?
Arbitration is a process whereby formal disputes are determined by a private tribunal. It’s an alternative to litigation. Must be shown to apply in the contract.
What are the different arbitration procedures that can be done?
Documents (30 days)
Short hearings (30 days)
Full procedure (longer)
What 3 things must be in place for arbitration to occur?
There must be a dispute
Must be an agreement in the contract for arbitration to apply
There must be a submission of the dispute to arbitration.
What is the arbitration act 1996?
The arbitration act is a legal framework for arbitration, including recognition of the process, the arbitrator, the procedures, and also the award and enforcement of that award.
Aims to ensure that Arbitration is:
- Quick, fair and cost effective
- Language used is user friendly and readily accessible
What is the process of Arbitration?
Preliminary Proceedings
Pleadings
Gathering evidence and interviewing witnesses
Expert reports
Hearing
Award - Final and Binding
What are the advantages and disadvantages of arbitration?
Advantages
Arbitration hearings, awards and disputes are private and confidential
Speed (compared with litigation)
Final and binding decision.
Disadvantages
Parties pay the costs of the arbitrator
Limited appeal rights
If money being disputed is small then it might be uneconomical.
What is the Technology and Construction Court (TCC)?
The technology and construction court handles disputes about buildings, engineering, and surveying.
The TCC does not normally handle cases with a value of less than £250k unless there is a good reason
