Conflict avoidance and dispute resolution Flashcards
What steps would you take at a project level prior to escalating to a formal DRP process?
Avoiding through conflict avoidance processes such as clear contract documentation, record keeping and good payment procedure.
If the conflict was regarding a compliant on my service, I would try to resolve the issue through initially discussing the matter to see if it could be resolved at project level
I would ask the matter to refer to our compliants handling procedure, where the compliant would be escalated to
What are some of the key differences between Adjudication and Arbitration?
Arbitration is a procedure in which both sides agree to let an impartial third party, the arbitrator, decide the case. The arbitrator may be a lawyer, or may be an expert
in the field of the dispute, or in some cases, an arbitration panel. The arbitrator’s decision, known as an award, is legally binding and can be enforced through the courts.
Normally, there is no appeal, however there are exceptions in which appeals may be accepted. Arbitrators have the power to ascertain facts rather than just listen to
submissions, and to order costs.
In adjudication, the decision is the responsibility of a third party adjudicator selected by the parties to the dispute. Adjudication decisions are binding unless and until
they are revised by subsequent arbitration or litigation after practical completion, or by agreement between the parties (hence the term ‘pay now argue later’).
There is no right of appeal and limited right to resist enforcement.
Generally, adjudicators do not have the power to award costs (other than their own fees and expenses). Adjudication must adhere to strict timescales and typically takes up to 28 days.
Are you aware of any alternative forms of DRP processes?
Negotiation
Mediation
Litigation
Can ADR be used if only one party prefers it as an alternative to Court proceedings for a dispute?
Yes, under the scheme for construction contracts either party may refer a dispute to adjudication.
Some contracts will even stipulate that a ADR must be the first dispute resolution procedure used in the case of a dispute, as a pre-condition to arbitration or litigation.
What are the advantages and disadvantages of ADR compared with Court determination for disputes?
Advantages of ADR vs Court - Cheaper - Quicker - Confidential - Can usually maintain relationships Disadvantages - Court is final and binding - Court has power to award party costs
How do you calculate the defects?
The defects were calculated by actual costs incurred by remedial works.
What is a referral notice? what are the main terms of the Construction Act that you used in adjudication?
The referral contains full details of the dispute and should be supported by evidence.
The right to refer a dispute at any time under a construction contract to adjudication.
Explain the process of adjudication.
The process is initiated by a party giving their notice of their intention to a refer a dispute to adjudication.
This is given through a ‘Notice of Adjudication’ setting out brief details of the dispute and the nature of redress sought.
The adjudicator should be appointed within 7 days of notice. The adjudicator may already be agreed in the contract or nominated by a AND, such as RICS.
After appointment, the dispute is then referred to the adjudicator in a document called the ‘Referral Notice’, which contains full details of the dispute and should be supported by evidence.
It is then common for the parties to exchange further submissions, such as:
- Response to Referral (Responding Party)
- Reply (Referring Party)
- Rejoinder (Responding Party)
The adjudicator is required to reach his decision within 28 days of receiving the Referral Notice, or longer if agreed.
The adjudicator can extend the period by up to 14 days if agreed by the referring party.
What is the power of the adjudicator?
- The adjudicator can take the initiative in ascertaining the facts and the law
- The adjudicators decision is binding until the dispute is determined by legal proceedings
The adjudicator cannot award party costs, therefore parties have to bear their own costs even if they are successful.
The adjudicator has a duty to act impartially.
What does the RICS Guidance Note say in relation to conflict avoidance? What are the key points?
Good management: A surveyor who proactively manages a project for which he or she is responsible or the duties that they have to their client in respect of the appointment is an excellent starting point for the avoidance of disputes.
Clear contract documentation: Many disputes arise from ambiguities in contract documentation or argument as to whether there is a contract at all
Partnering and alliancing: Building co-operation between the project participants in order to foster team working, problem solving and an emphasis on project delivery can assist in the avoidance of disputes.
Good project management: Means proactively managing all aspects of time, money and risk associated with the project.
Good client management: A good understanding of the client’s objectives and the client’s approach to risk is also extremely valuable, as will be maintaining good lines of communication with the client.
Good constructor management: In terms of conflict avoidance, this means having an objective understanding of the project, the contract and the programme of works.
Good design team management: The provision of information within the design team and from the design team to the constructor is also crucial.
Good payment practice: The design team and the constructor rely upon cash flow
Record keeping: Many disputes can be resolved by retrospectively considering records that have been kept during the course of the procurement or the carrying out of a project.
Regular reporting and proactivity: The regular monitoring of cost, progress and quality is important for the success of any project.
What does the RICS Guidance Note say in relation to dispute resolution? What are the key points?
Many different labels have been given to the wide range of dispute resolution techniques. In reality there are only three distinct processes and all dispute resolution techniques are built upon these processes. They are:
1 negotiation – the problem-solving efforts of the parties themselves
2 mediation or conciliation – a third-party intervention does not lead to a binding decision being imposed on the parties; and
3 an adjudicative process – the final outcome is determined by a third party who does impose a binding decision on the parties.
Professor Green of Boston University labelled these as the three pillars of dispute resolution.
What is adjudication?
In adjudication, the decision is the responsibility of a third party adjudicator selected by the parties to the dispute. Adjudication decisions are binding unless and until
they are revised by subsequent arbitration or litigation after practical completion, or by agreement between the parties (hence the term ‘pay now argue later’).
There is no right of appeal and limited right to resist enforcement.
Generally, adjudicators do not have the power to award costs (other than their own fees and expenses). Adjudication must adhere to strict timescales and typically takes up to 28 days.
What is arbitration?
Arbitration is a procedure in which both sides agree to let an impartial third party, the arbitrator, decide the case. The arbitrator may be a lawyer, or may be an expert
in the field of the dispute, or in some cases, an arbitration panel. The arbitrator’s decision, known as an award, is legally binding and can be enforced through the courts.
Normally, there is no appeal, however there are exceptions in which appeals may be accepted. Arbitrators have the power to ascertain facts rather than just listen to
submissions, and to order costs.
Can you remove the adjudication clause from a contract?
Adjudication under section 108 of the Housing Grants, Construction and Regeneration Act 1996 (HGRCA) was introduced in May 1998
If the Act applies to a contract then either party may request the appointment of an adjudicator to be made within seven days of serving a Notice of Dispute,
and the adjudicator has 28 days from issue of the Referral within which to issue a decision.
