Conflict avoidance, management and dispute resolution procedures

Question 1

How do you avoid conflict on a project?

Answer 1

• Firstly, ensure that the tender information is clear, concise when tendering the project. i.e. a clear scope of works.
• If there is a dispute, use a people approach first and try to negotiate an agreement before going legal.
• As a last resort you should go legal.

Question 2

Talk me through how you would go about negotiating something?

Answer 2

• Firstly I would prepare, as understanding you points fully is critical.
• Secondly I would pre-determine what I can afford to give away, know my bottom line.
• Focus on the bigger picture, don’t get stuck on one item.
• Try to negotiate a win/win situation.
• Never accept the first offer.
• Finally, I would negotiate the small deals before the big ones.

Question 3

What is the Adjudication Process?

Answer 3

• Notification of Adjudication from one party to another.
• From receipt of notification, parties have up to 7 days to appoint the adjudicator.
• Adjudicator will review parties cases, and make their decision within 28 days. (This can be extended to 42 days)
• The adjudicator does not have the power to award costs, unless the parties agree to grant him this power.

Question 4

What is Litigation?

Answer 4

• Litigation is the process of taking legal action, i.e. in the construction industry, it will typically be taken to the Construction and Technology Court.

Question 5

What is Arbitration?

Answer 5

• The use of an Arbitrator to settle disputes.

* It is a private, judicial determination of a dispute by an independent third party.

Question 6

What is the Arbitration Process?

Answer 6

• The appointed Arbitration body must be notified, and they will appoint an Arbitrator.
• The main hearing will be held, whereby each side will present their version of the conflict, along with their evidence.
• The arbitrator will hen base their decision on what they believe to be fair and just, as they are not required to follow the law or reasoning of earlier case decisions.
• It is very difficult to appeal an Arbitration, they can only be appealed if it can be proved that the arbitrator was:
o Corrupt.
o Bias.
o Arbitrator exceeded their power.

Question 7

Under JCT how long does an adjudicator have to make his award?

Answer 7

28 days from issue of the referral notice, but this can be extended to 42 if both parties agree.

Question 8

What is a Dispute Board?

Answer 8

• A group that is assigned to a project from inception. They are more a preventative form of dispute resolution rather than reactive, as they will try to identify where disputes may arise, and takes steps to ensure they do not happen.
• Usually being used on Massive jobs.

Question 9

Why can disputes occur?

Answer 9

• Poor performance of parties.
• Uncontrolled change.
• Complex contractual relationships / inadequate tender and contract documentation.
• Inability or reluctance to pay.
• Inappropriate procurement.
• Pressure to start on site before design and or contract finalised e.g. Letters of Intent (LOI)

Question 10

How are disputes avoided?

Answer 10

• Robust tender and contract documentation.
• Controlled change.
• Informed procurement strategies.
• Sensible risk allocation.
• Appropriate financing.
• Pro-active project management.

Question 11

What techniques are available to resolve disputes?

Answer 11

1. Negotiation – problem solving efforts of the parties themselves.
2. Mediation or conciliation – 3rd party intervention makes a non-binding decision.
3. An adjudicative process – final outcome determined by a 3rd party who’s decision is binding.

Question 12

What is the difference between adjudication and arbitration?

Answer 12

• Adjudication is meant to be quicker and cheaper than arbitration or litigation, as adjudicators must reach a decision within 28 days. Adjudication decisions can be appealed and taken to arbitration or litigation.

Question 13

Have you heard of ‘Tolent’ clauses? What are they?

Answer 13

They’re clauses which make the referring party in any adjudication responsible for the entire cost of it, regardless of the outcome. They were an attempt to discourage parties from beginning proceedings.

Question 14

Can you tell me the dispute resolution procedure listed in one of your contracts and who the nominated body is?

Answer 14

• Adjudication as default by JCT

- Adjudicator is the RICS.

Question 15

Can you explain to me the differences between mediation and conciliation?

Answer 15

The main difference between conciliation and arbitration is that a conciliator doesn’t have the authority to ask for evidence or witnesses, and as such, conciliation as a process doesn’t have legal standing. On the other hand, the arbitrator needs to make a decision based on evidence and his final verdict is legally binding.

Question 16

Can you name some key principles to adopt which can help to avoid conflict?

Answer 16

Good management – a QS who proactively manages responsibilities and duties to their client – proactively working, planning and managing future work
• Clear contract documentation – reduction in ambiguities in contracts
• Partnering and alliancing – building co-oporation between project participants in order to fost teamworking.
• Good project management – proactively managing all aspects of time, money and risk on a project.
• Good client management – good understanding of client objectives and the clients approach to to risk, building repore with clients and having difficult conversations when required.
• Good constructor management – have an understanding of the project, contract and programme of works – regular assessment of progress and proactive dealing with issues.
• Good design team management –
• Good payment practice – ensuring payment provisions are adhered to avoid animosity, conflict and disputes.
• Record keeping – meticulous record keeping on all aspects of work.
• Regular reporting and proactiveity – regular reporting of cost, progress and quality – can be inform of reports, minutes, drop lines in programme sand photos

Question 17

What happens if a party does not accept the mediators decision?

Answer 17

• Faulting party would still need to pay for the mediator however it can be taken to further dispute (eg adjudication or litigation).

Question 18

What is Mediation?

Answer 18

Mediation is the name given to a confidential process whereby parties to a dispute invite a neutral individual to facilitate negotiations between them with a view to achieving a resolution of their dispute.

Question 19

What is Arbitration?

Answer 19

An arbitration is a legal proceeding under the Arbitration Acts and the arbitrator reaches a decision on the basis of evidence put before him or her sometimes at a formal hearing. The arbitrator can call for discovery of documents and interprets the evidence. The arbitrator’s decision is enforceable as if it were a judgment of the court. Although the arbitrator is not liable for negligence the court can set the judgment aside on the grounds of misconduct.

Question 20

Can you tell me more about JCT adjudication?

Answer 20

Section 9 deals with dispute resolution. If either party wants to raise an adjudication, the scheme shall apply subject to:

• the adjudicator shall be the person nominated in the contract particulars
• the adjudicator has expert knowledge and experience and if not must appoint an expert witness

Question 21

What do you understand to be the difference between an arbitrator and an independent expert?

Answer 21

An arbitration is a legal proceeding and the arbitrator reaches a decision on the basis of evidence put before him/her, sometimes at a formal hearing. An independent expert is jointly appointed by the parties and carries out the work in the usual way in order to give an expert opinion.

The arbitrator’s decision is enforceable as if it were a judgment of the court. Although the arbitrator is not liable for negligence the court can set the judgment aside on the grounds of misconduct. An independent expert’s decision is not enforceable directly by the courts and they are not liable for negligence.

Question 22

What types of dispute have you come across in your experience and how have these been resolved?

Answer 22

I have had disputes when agreeing variations. For example, when agreeing the extra irrigation to planters on the roof as a change the contractor did not initially agree until after the negotiation process.

Question 23

What is an expert witness?

Answer 23

An expert witness informs and guide in court and must demonstrate high levels of impartiality.