Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

When would a conflict avoidance, management and dispute resolution procedure occur?

Answer 1

Conflict avoidance, management and dispute resolution arises because of a failure to comply with a contractural obligation that may occur because of differing interpretations of the contract itself. Such conflicts are common in construction but can also arise under other contractural arrangements such as leases.

Question 2

What is it important to follow when achieving efficiency in any contractural arrangement?

Answer 2

It is important to follow the hierarchy of avoidance, management and resolution of conflicts to try to achieve efficiency in any contractural arrangement

Question 3

What does a failure to avoid conflicts incur?

Answer 3

Failure to avoid conflicts will incur costs in subsequent management and resolution

Question 4

Conflict Avoidance

Answer 4

It requires clear, concise, careful drafting of the contract or lease and associated documentation.

Adopting proactive conflict avoidance risk analysis involves understanding what could go wrong or how misinterpretation between parties might arise

Managing all parties expectations requires understanding their objectives and clearly communicating these, as well as implementing ‘early warning systems’, including the service of appropriate notices

Negotiating contractural obligations carefully and transparently will help to avoid conflict or at least enable their efficient resolution

Keeping good records with a sufficient level of detail can often help to resolve conflicts before they escalate

Question 5

Dispute Resolution

Answer 5

Three main processes availbale in resolving disputes:

1. Negotiation: The problem-solving efforts of the parties themselves
2. Mediation or conciliation: a third party intervention which does not bind the parties to a decision but assists them to resolve difficulties
3. Adjudicative process: An outcome is determined by a third party, such as litigation and arbitration

Question 6

Alternative dispute resolution (ADR)

Answer 6

These are dispute resolution processes and techniques that fall outisde the scope of court litigation

Advantages include:
- Speed - taking less time than lengthy court proceedings following the Civil Procedure Rules
- Informality - outisde a court
- A greater opportunity for negotiation
- Cost - less money spent on professional fees for litigation
- Quality of decision making, as the outcome or award can be made by a surveyor rather than a judge
- Confidentiality
- There are various forms of ADR used in the UK to include:

Mediation
Arbitration
Independent Expert Determination

Question 7

Mediation

Answer 7

• This involves the use of a netural mediator who facilitiates discussions between the two parites to explore whether a solution can be found
• A confidential and informal process
• Mediation is usually conducted on a ‘without prejudice’ basis
• The mediator has no decision-making authority and cannot impose a resolution upon the two parties
• There is an RICS Guidance Note in Mediation, 2014

Question 8

Arbitration

Answer 8

• An arbitrator is appointed in a quasi-judicial role in accordance with the Arbitration Act 1996. Parties are bound by the decision.
• Arbitrators can order a hearing or consider written representations
• They will have specialist knowledge of the subject area and cannot be sued for negligence, but decisions can be over-ruled by the Court of Appeal on a point of law
• This offers a fast, cost effective and confidential solution to a dispute
• Surveyors can act as an arbitrator having passed the Chartered Institute of Arbitrators exams
• PACT (Professional Arbitration on Court Terms) is a form of arbitration used for lease renewal disputes