Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

How do you avoid conflict in the first instance?

Answer 1

• 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

Question 2

How to initially deal with conflict?

Answer 2

• Raise issue with all parties, try to resolve through communication and negotiation
• Face-to-face meeting usually best way to find resolution

Question 3

What indicates success of a final account negotiation?

Answer 3

• All parties come away happy
• Costs agreed within client budget
• Negotiation resolved in timely manner

Question 4

Causes of most disputes?

Answer 4

• Commercial aspects
• Unclear / confusing documentation and drawings
• Teams under pressure - time / resource constraints
• Insufficient detail / consideration to contracts
• Unclear scope of service

Question 5

What to do if negotiation breaks down and the matter cannot be resolved?

Answer 5

Consider ADR (alternative dispute resolution)

Question 6

What is dispute resolution?

Answer 6

Actions / processes used to resolve conflict, dispute or claim between parties

Question 7

Forms of alternative dispute resolution?

Answer 7

• Mediation
• Conciliation
• Negotiation

Question 8

Formal methods of dispute resolution?

Answer 8

• Adjudication
• Arbitration
• Adjudication

Question 9

Considerations prior to selecting form of dispute resolution?

Answer 9

• Cost in relation to claim being sought
• Timescales
• Impact on business relationships and reputation

Question 10

What dispute resolution processes are named in your contract?

Answer 10

i.e. JCT - negotiation, mediation, adjudication, arbitration

Question 11

What does it mean if a dispute has been crystalised?

Answer 11

Dispute has been referred to formal dispute procedure

Question 12

What does ADR stand for?

Answer 12

Alternative dispute resolution
- Other options to traditional binding dispute resolution processes (litigation and arbitration)

Main forms:
- Negotiation
- Mediation
- Adjudication

Question 13

What is the TCC?

Answer 13

Technology and Construction Court
- Handles disputes about buildings, engineering, surveying
- Cases usually >£250,000

Question 14

What is mediation?

Answer 14

• 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

Question 15

What is negotiation?

Answer 15

• 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

Question 16

What is your most successful negotiation?

Answer 16

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)

Question 17

What could indicate success of a negotiation on a final account?

Answer 17

• Both parties satisfied with outcome and feel fair, reasonable compromise reached
• Partnering approach adopted with both parties feeling long-term relationship and reputations maintained

Question 18

What is conciliation?

Answer 18

• 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

Question 19

What is an expert witness?

Answer 19

• 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

Question 20

What is expert determination?

Answer 20

• 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

Question 21

How does the adjudication process work in terms of timeframes?

Answer 21

• 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

Question 22

Can the 28-day decision period be extended?

Answer 22

Can be extended to 42 days by mutual agreement of both parties

Question 23

Is the adjudication process binding?

Answer 23

Binding and enforceable in court unless adjudicator has acted outside their jurisdiction / shown bias

Question 24

Is there an appeal process for adjudication?

Answer 24

No, but parties can take same dispute to litigation / arbitration (if in contract)

Question 25

What if a building contract doesn’t have adjudication provisions?

Answer 25

• 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

Question 26

Who enforces requirement for building contract to contain provisions for adjudication?

Answer 26

Housing grants, Construction and Regeneration Act 1996 (Construction Act)

Question 27

Who pays for the adjudication?

Answer 27

Both parties jointly liable for adjudicator fees, adjudicator can decide who is to pay the fees

Question 28

Adjudicating bodies under JCT?

Answer 28

• Royal Institute of British Architects (RIBA)
• Royal Institution of Chartered Surveyors (RICS)
• constructionadjudicators.com
• Association of Independent Construction Adjudicators
• Chartered Institute of Arbitrators

Question 29

Can you omit adjudication from a contract?

Answer 29

Yes however it’s included in the Construction Act and is mandatory, therefore would still be an option

Question 30

What is arbitration?

Answer 30

• 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

Question 31

Advantages of arbitration?

Answer 31

• 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

Question 32

Disadvantages of arbitration?

Answer 32

• Parties must bear costs of arbitrator and venue
• Limited appeal rights
• For low value disputes, arbitrator fees can be uneconomical

Question 33

Arbitration options listed in contract conditions?

Answer 33

• Royal Institute of British Architects
• Royal Institution of Chartered Surveyors
• Chartered Institute of Arbitrators

Question 34

What is litigation?

Answer 34

• 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

Question 35

Advantages of litigation?

Answer 35

• 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

Question 36

Disadvantages of litigation?

Answer 36

• Potentially greater costs if dispute not well managed
• Potentially longer period to obtain judgement
• Generally public
• Judgement subject to appeal

Question 37

Difference between arbitration and litigation procedures?

Answer 37

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)