Conflict Avoidance, Management and Dispute Resolution Procedures Flashcards
How do you avoid conflict in the first instance?
- Clear tender / contractual information
- Effective communication
- Record keeping - put things into writing, filing emails
- Follow company procedures and policy (inc QA)
- Follow RICS standards, guidance, professional statements
- Negotiate issues as early as possible
How to initially deal with conflict?
- Raise issue with all parties, try to resolve through communication and negotiation
- Face-to-face meeting usually best way to find resolution
What indicates success of a final account negotiation?
- All parties come away happy
- Costs agreed within client budget
- Negotiation resolved in timely manner
Causes of most disputes?
- Commercial aspects
- Unclear / confusing documentation and drawings
- Teams under pressure - time / resource constraints
- Insufficient detail / consideration to contracts
- Unclear scope of service
What to do if negotiation breaks down and the matter cannot be resolved?
Consider ADR (alternative dispute resolution)
What is dispute resolution?
Actions / processes used to resolve conflict, dispute or claim between parties
Forms of alternative dispute resolution?
- Mediation
- Conciliation
- Negotiation
Formal methods of dispute resolution?
- Adjudication
- Arbitration
- Adjudication
Considerations prior to selecting form of dispute resolution?
- Cost in relation to claim being sought
- Timescales
- Impact on business relationships and reputation
What dispute resolution processes are named in your contract?
i.e. JCT - negotiation, mediation, adjudication, arbitration
What does it mean if a dispute has been crystalised?
Dispute has been referred to formal dispute procedure
What does ADR stand for?
Alternative dispute resolution
- Other options to traditional binding dispute resolution processes (litigation and arbitration)
Main forms:
- Negotiation
- Mediation
- Adjudication
What is the TCC?
Technology and Construction Court
- Handles disputes about buildings, engineering, surveying
- Cases usually >£250,000
What is mediation?
- Parties agree to independent third-party neutral system to facilitate discussion, with goal of reaching settlement
- Mediator encourages parties to come together
- Power to settle remains with parties, process led by mediator (mediator doesn’t award winning party)
- Mutual (voluntary) agreement, initiated at any time between parties
- Non-binding
What is negotiation?
- Process where parties resolve issues between themselves (informal private / facilitated discussion), ending when both parties come to agreement
- Simple, easily resolvable, compromises
- Cooperation of all parties, all agree to be bound by this settlement
What is your most successful negotiation?
base on own experience
- Reference project, explain what dispute was in relation to
- Explain how I prepared for example, i.e. holding meeting with client / internal team
- Explain non-negotiable items and items conceded, how these were decided
- Talk to assessors through end outcome, how did I insure this was positive for client, wider team, project (i.e. consideration for long term approach)
What could indicate success of a negotiation on a final account?
- Both parties satisfied with outcome and feel fair, reasonable compromise reached
- Partnering approach adopted with both parties feeling long-term relationship and reputations maintained
What is conciliation?
- Similar to mediation- conciliator facilitates settlement- they don’t decide any issues / fact - conducts process
- Conciliator prepares “Recommendation” - sets out solution to dispute, no authority to seek evidence / call witnesses
- Conciliator acts as message, encourages diplomacy
- If neither party dissents / initiates adjudication / arbitration, recommendation becomes final and binding
What is an expert witness?
- Person whose experience and knowledge of particular field goes beyond what’s expected of a layman
- Makes their knowledge available to court / other bodies- helps to understand issue to reach reasoned decision
What is expert determination?
- Parties agree to refer disagreement to impartial expert third party, bound by their decision
- More informal, simpler, cheaper than arbitration / litigation
- For technical disputes, can shortcut to a binding decision
How does the adjudication process work in terms of timeframes?
- Either party serves notice to other party of intention to refer dispute to adjudication
- 7 days (of notice issue), referring party must serve Referral (statement of case) and secure appointment of adjudicator (named / nominating body in contract). Adjudication void if not served in this time.
- Referral contains detailed explanation of referring party’s claim regarding dispute in notice + supporting documentation
- After appointment, adjudicator sets out timetable, permits other party to issue response to Referral
- Adjudicator must make decision within 28 days of referral
Can the 28-day decision period be extended?
Can be extended to 42 days by mutual agreement of both parties
Is the adjudication process binding?
Binding and enforceable in court unless adjudicator has acted outside their jurisdiction / shown bias
Is there an appeal process for adjudication?
No, but parties can take same dispute to litigation / arbitration (if in contract)
What if a building contract doesn’t have adjudication provisions?
- Adjudication is now a legal (statutory) right in UK (England, Scotland, Wales) construction contracts (since Construction Act came into force)
- If contract doesn’t qualify under construction act, Scheme for Construction Contracts applies in its entirety
Who enforces requirement for building contract to contain provisions for adjudication?
Housing grants, Construction and Regeneration Act 1996 (Construction Act)
Who pays for the adjudication?
Both parties jointly liable for adjudicator fees, adjudicator can decide who is to pay the fees
Adjudicating bodies under JCT?
- Royal Institute of British Architects (RIBA)
- Royal Institution of Chartered Surveyors (RICS)
- constructionadjudicators.com
- Association of Independent Construction Adjudicators
- Chartered Institute of Arbitrators
Can you omit adjudication from a contract?
Yes however it’s included in the Construction Act and is mandatory, therefore would still be an option
What is arbitration?
- Lawsuit without court involvement
- Parties agree (via contract / subsequent agreement) to pursue lawsuit in court
- This gives arbitrator power to issue decision to parties’ rights and obligations - such decision legally binding on all parties
Advantages of arbitration?
- Private process - no public process (not necessarily confidential) - can preserve reputations
- Faster than litigation
- Arbitrator can have relevant expertise on matter, and their decision can be enforced as judgement of the court
Disadvantages of arbitration?
- Parties must bear costs of arbitrator and venue
- Limited appeal rights
- For low value disputes, arbitrator fees can be uneconomical
Arbitration options listed in contract conditions?
- Royal Institute of British Architects
- Royal Institution of Chartered Surveyors
- Chartered Institute of Arbitrators
What is litigation?
- Parties commencing claim in civil courts
- Courts have inherent jurisdiction to hear dispute in respect of (practically) anything
- Nature, complexity and dispute value determines which court will hear particular dispute
Advantages of litigation?
- Judges compel parties to comply with timeframes, can sanction for non-compliance
- Judges have power to make orders and provide interim releaf
- Defined rights of appeal in cases where errors of fact/law made
Disadvantages of litigation?
- Potentially greater costs if dispute not well managed
- Potentially longer period to obtain judgement
- Generally public
- Judgement subject to appeal
Difference between arbitration and litigation procedures?
Arbitration
- Governed by Arbitration Act 1996
- Must be agreement by both parties to enter into arbitration
- Wide degree of discretion by parties to how proceedings conducted
- Private process
- Similar to litigation- formal submissions, expert evidence, hearings and decision
Litigation
- Proceedings conducted in court
- Public process following civil rules
- High costs, but process can deal with multi-party disputes and civil procedure rules (aiming for accessibility, speed and efficiency)
