Conflict avoidance, management and dispute resolution procedures - Level 1 Flashcards
Common causes of disputes
Errors in contracts Poor communication Money Delays Valuation appeals Complaints
Methods of dispute avoidance
- Negotiation
- Risk management
- Early warning signs
What is Negotiation?
- Process whereby the parties work out between them how to resolve any issue
- Power to settle dispute rests with the parties.
What is Mediation
- confidential process
- parties in dispute invite a neutral individual to facilitate negotiations
- View to achieving a resolution of their dispute.
Adv/ Dis to Mediation
Advantages:
- preserving business relationships
- speed
- cheaper
- confidential
Disadvantages
– Concern that an important aspect of their case may be disclosed during mediation
- non-binding
- party costs – if solution not reached money may be wasted before proceeding to more formal dispute resolution.
Arbitration
- legal proceeding under the Arbitration Acts
- arbitrator reaches a decision on the basis of evidence put before him
- sometimes at a formal hearing
- arbitrator’s decision is enforceable
Adv/ Dis of Arbitration
Advantages
- BINDING – arbitration results in a binding award
- CONFIDENTIALITY
- EXPERTISE – parties may be able to agree the expertise
- FLEXIBILITY - can take many forms;
- PARTY COSTS – arbitrator has power to award costs (successful party can recover costs)
Disadvantages
- COST– can be a costly process.
- RELATIONSHIPS– adversarial nature of arbitration
- JOINDER OF PROCEEDINGS – relatively little statutory power to consolidate the actions into one arbitration
- SPEED– can be a slow process.
What is Adjudication?
- Adjudicator assesses evidence presented by the parties
- Reaches legally binding decision
- Unless it is referred to arbitration or the courts, or is settled between the parties themselves.
- Most cases - final resolution achieved when adjudicator has reached decision.
Adv/Dis of Adjudication
Advantages
- BINDING - legally binding until dispute is determined by legal proceedings (arbitration)
- CONFIDENTIALITY - unless enforcement proceedings are commenced, the process should remain confidential
- EXPERTISE - adjudicator selected for his expertise
- FLEXIBILITY - adjudicator has some flexibility
- PARTY COSTS - unless the parties agree otherwise, the adjudicator has no power to award party costs.
- SPEED - at which a binding (albeit temporarily) decision can be obtained
Disadvantages
- COST - parties have to bear their own costs even if they are successful
- RELATIONSHIP - adversarial nature = damage
Difference between Arbitration and Adjudication
What are Dispute Resolution Boards?
Involves a board of individuals that resolves disputes on construction projects
Mainly used for large construction projects
What is Independent Expert determination?
- independent expert is appointed by the two parties to give an expert opinion on the matter to be decided.
- expert may have regard to evidence submitted or may have a hearing and adopt what they consider to be the most appropriate procedure.
- expert’s decision is not enforceable directly by the courts and they are liable for action for negligence.
Adv/Dis of Independent Expert determination
Advantages
- BINDING- expert’s determination is binding
- CONFIDENTIAL - expert determination should remain confidential in the majority of cases
- Expertise – expert will have been selected for his Expertise. Expert not restricted to only deciding which party’s case he prefers and can use expertise to reach an alternative conclusion
- Flexibility – the parties can agree the procedure to be adopted
- Speed – conducted relatively quickly, particularly when compared to litigation.
Disadvantages
- Binding – no appeal against it. Parties may have no redress even if the expert has made an error of fact or law
- Relationships – relationships may be damaged.
What is Professional Arbitration on Court Terms?
- PACT
- PACT is a scheme offered by RICS and the Law Society for the resolution of lease renewal disputes.
- intended to give landlords and tenants an opportunity to have the terms and rent payable under their new lease decided by a surveyor or solicitor acting as either an arbitrator or independent expert determiner.
Advs/Dis of Professional Arbitration on Court Terms PACT
Advantages
Binding – PACT decisions are binding on the parties
Confidentiality – the PACT scheme should remain confidential in the majority of cases
Cost – the cost of the PACT scheme is likely to be lower than having the matter decided in court
Expertise – the PACT professional will have been selected for his or her knowledge and expertise
Speed – the PACT scheme is usually quicker process than court proceedings.
Disadvantages
Court involvement – the PACT scheme still requires the court to be involved at commencement in order to agree a stay of proceedings, thereby adding
