Conflict Avoidance, Management and Dispute Resolution Procedures - L1

Question 1

Conflict avoidance, management and dispute resolution procedures - Extract from Candidate Guide - Aug 2018 (updated Feb 2022)

Answer 1

Question 2

How do you avoid conflict?

Answer 2

The best way is to keep communication clear and constant so that all parties understand what it is that is going on and when there is a dispute, it can be effectively addressed in a fair way.

Question 3

Name some conflict avoidance processes?

Answer 3

• Good Management
• Clear Contract Documentation
• Partnering and Alliancing
• Good Payment Practice
• Record Keeping
• Regular reporting and proactivity

Question 4

What is Partnering & Alliancing:

Answer 4

Partnering and alliancing are collaborative project management approaches in construction and other industries. Partnering promotes open communication and cooperation among project stakeholders, emphasizing trust, shared goals, and early involvement. Alliancing goes further, forming a formal partnership where risks and rewards are shared, fostering innovation and cost savings

Question 5

What are the different techniques of conflict avoidance?

Answer 5

• Confronting collaborative, confront the issue rather than each other
• Compromising give and take
• Smoothing more accommodating, involves sacrifice.
• Forcing force your view to complete disregard of the other view
• Avoiding postponing.

Question 6

What are the types of Dispute Resolution?

Answer 6

• Negotiation
• Mediation and Conciliation
• Expert Determination
• Adjudication
• Arbitration
• Litigation

Question 7

What are ADR techniques?

Answer 7

This stands for Alternative Dispute Resolution and refers to any technique that is not litigation or arbitration.
Advantages of ADR:
• Speed takes less time than court proceedings following the CPR.
• Informality - outside of court.
• Greater opportunity for negotiation.
• Cost less money on professional fees that litigation.
• Quality of decision making “ as its made by experts in the field not judges.

Question 8

What is “JCT”?

Answer 8

JCT” refers to the “Joint Contracts Tribunal.” JCT develops standard construction contracts in the UK, outlining project terms and dispute resolution procedures. RICS professionals use these contracts as the basis for resolving construction disputes through arbitration or mediation, ensuring adherence to agreed-upon terms and industry standards.

Question 9

What does JCT recommend for ADR?

Answer 9

The methods of dispute resolution are referenced in the Articles:
• Mediation
• Adjudication (adjudicator can be named in Contract Particulars)
• Arbitration (Appointing body can be named in Contract Particulars)

Question 10

What is a dispute/conflict?

Answer 10

When two or more parties have a difference of opinion. It can be positive or negative and lead to:
* Arguments
* Negotiation
* Dispute resolution
* Innovation.

Question 11

What is a Dispute Board

Answer 11

Dispute Adjudication Board (DAB), is a specialized panel of experts in construction and dispute resolution. Its primary role is to swiftly and impartially resolve disputes that emerge during construction projects. Typically comprising three members – one appointed by the project owner, another by the contractor, and a neutral chairperson – the board reviews disputes, assesses evidence, and issues binding or non-binding decisions as per the contract terms. This process enhances transparency and fairness in conflict resolution, minimizing the need for lengthy and expensive legal proceedings

Question 12

Can you name some of the RICS approved ADR / Ombudsman bodies ? Where would you find this information ?

Answer 12

• Centre for Effective Dispute Resolution
• The property Ombudsman
• The property Redress Scheme
• Financial Ombudsman Service
• Local Government Ombudsman
• Adjudicators Office
  *The New Homes Ombudsman Service: NHOS
  Contained within the RICS Guidance Note - ‘Complaints Handling’ 1st Edition 2016

RICS Conflict Avoidance and Dispute Resolution in Construction Guidance Note (2012)

Question 13

What do you understand by Statutory?

Answer 13

Statutory Law (Statue Law) is set down by legislate.

Question 14

What is the conflict avoidance pledge CAP?

Answer 14

Five of the UKs leading professional bodies joined together to form a commitment in the construction and infrastructure sectors to prevent disputes through early communication, collaboration, and dispute avoidance mechanisms. It aims to reduce project delays and costs by fostering a cooperative environment, enhancing project success, and maintaining positive stakeholder relationships.

Question 15

What statute does Arbitration sit under?

Answer 15

The Arbitration Act 1996

Question 16

Who set up the property ombudsman ?

Answer 16

The scheme was underpinned by statue in 2007 (estate agents) and 2014 (letting and managing agents) and approved by the UK government to help consumers settle their disputes with property businesses such as estate agents, letting agents and property management agents.

Question 17

What does without prejudice mean ?

Answer 17

That it cannot be used as evidence in court proceeding or criminal proceedings.

Question 18

What is the meaning of disclosure ?

Answer 18

Relating to a mechanism allowing a party in arbitration to see a file of the other party.

Question 19

What if the contract doesn’t have ADR Procedures?

Answer 19

If the contract qualifies under the The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act), both parties have a statutory right to adjudication. If it does not qualify, then the Scheme for Construction Contracts applies.

Question 20

What is the Scheme for Construction Contracts 2011?

Answer 20

It is a secondary piece of legislation put into contracts upon failure of compliance of the construction act. It sets out a procedure for the appointment of the adjudicator and conduct of adjudication.

Question 21

What is the responsibility of an expert witness ?

Answer 21

To provide independent, impartial, and unbiased evidence to the court or tribunal. They should have specialist skills, knowledge, or experience

Question 22

What does this Act (The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act) ) require in terms of certifying contractor’s requests for payment and invoices etc?

Answer 22

There must be a “due date” for each payment; there must be a “final date” for each payment; the contract must require a “payment notice” to be given within 5 days of the due date, stating what is to be paid and the basis on which it is calculated – this can be a duty of the payer or the payee.

Question 23

What enforces the requirement for a building contract to contain provisions for adjudication?

Answer 23

The HGCRA Housing grants, Construction and Regeneration Act 1996. (so called Construction Act)

This act also requires the following:
* The right to be paid in interim, periodic or stage payments
* The right to be informed of the amount due, or any amounts to be withheld
* The right to suspend performance for non-payment
* The right to adjudication
* Disallowing pay when paid clauses

Question 24

What changes did the Construction Act 2009 provide in terms of adjudication?

Answer 24

It allowed for verbal contracts to be protected by the same rights to adjudication.

Question 25

What would you consider to select a form of dispute resolution?

Answer 25

• The cost in proportion to the claim
• The timescales involved
• The impact on business relationships and reputation

Question 26

What court are construction disputes heard ?

Answer 26

The Technology and Construction Court (TCC) is a specialized UK court handling complex disputes in technology, construction, engineering, and infrastructure, renowned for its technical expertise. Nothing less than £250,000.

Question 27

What does the abbreviation HGCRA strand for ?

Answer 27

Housing Grants Construction Regeneration Act 1996.

Question 28

What is included in the RICS Conflict Avoidance and Dispute Resolution Guidance Note (Part of the ‘Black Book’)?

Answer 28

• Conflict avoidance processes
• Three pillars of dispute resolution
• Dispute resolution techniques
• ADR
• Standard form contracts
• Conflict Avoidance
• Dispute Resolution Procedures
• Dispute Escalation Clauses
• Interim Valuations and Claims

Question 29

What are the 3 Pillars of Dispute Resolution

Answer 29

Adjudication, mediation, and arbitration. Adjudication involves a formal third-party decision. Mediation is an informal, collaborative process facilitated by a neutral mediator. Arbitration is a semi-formal process where arbitrators render a binding decision. These methods offer varying levels of formality and control in conflict resolution.

Question 30

What Guidance do the RICS provide on Conflict of Interest?

Answer 30

RICS - Conflict of Interest Professional Standard

This document was reissued in July 2023 as a professional standard. It had previously been published in March 2017 as a Professional Statement.

Inlcudes:
Conflicts of Interest
COnfidential Information
Firm Systems and controls
Record Keeping
Informed Consent
Information Barriers
Competing bidders
Agency

Question 31

What is informed consent ?

Answer 31

When an conflict of interest has been highlighted to a client who understand and still wants to progress .

Question 32

What is a conflict of interest?

Answer 32

When a duty to act on behalf of one party is compromised or potentially compromised by the duty to act on behalf of another party which having competing interests

Question 33

What are the types of conflicts of interest?

Answer 33

• Party Conflict – working on the same project/instruction but for two separate clients
• Own Interest – when the duty to act on behalf of a client is compromised by your own personal interests.
• Confidential information conflict – when you have a duty to present information to one client but have a duty to another client to keep that information confidential.

Question 34

What is a information barrier ?

Answer 34

A measure put in place as a result of a conflict on interest, to reduce the passing or access of information from within an organisation.

Question 35

How would you carry out a conflict of interest check?

Answer 35

Collate all the job details and check with colleagues and the system files if there are any competing clients. If there is a conflict, it should be disclosed to the clients and get their approval before proceeding.

Question 36

What is conflict avoidance and conflict management?

Answer 36

• Conflict avoidance is a person’s method of reacting to conflict, which attempts to avoid directly confronting the issue at hand.
• Conflict management is the process of limiting the negative aspects of conflict while increasing the positive aspects of conflict

Question 37

What is Mediation ?

Answer 37

Negotiations carried out with the assistance of an impartial 3rd party person who has no power to impose an outcome. The mediators role is to facilitate a decision. When an agreement has been found, the parties can sign a document to the agreement.

Advantages
* Similar to negotiation but benefit of an impartial member
* Non adversarial
* Voluntary
* Quick
* Usually inexpensive
* Flexible as parties retain control
* Mediator can make the decision if parties agree

• Mediator does not state specialist advice
• Can be subject to delaying tactics
• Costs may not be recoverable if no settlement is reached.

Question 38

What is Arbitration ?

Answer 38

Private contractual from of dispute resolution. A 3rd party arbitrator or panel selected by the parties in dispute forms a decision based on material facts, documents and principles of law. The decision is legally binding and has limited rights of appeal. Legal costs are normally awarded to the successful party. It commences with a notice to concur which provides for agreement of appointment failing which, an arbitrator is appointed by a nominating body. Three procedures: Documents only – 30 days, short hearing – 30 days, full procedure – no time limit.

Advantages
• Governed by Arbitration Act 1996
• Private
• Arbitrator is usually experienced in the field
• Consensual in that the parties can decide timings etc.
• Can call on witnesses
• Outcome can amend the contract

Disadvantages
• Expensive
• Can only be appealed on point of law/jurisdiction

Question 39

Who can be an Arbitrator?

Answer 39

An expert in their own right, who acts fairly and impartially to reach a decision.

Question 40

What is Adjudication?

Answer 40

• (Parties agree by contract to appoint a 3rd party adjudicator)(JCT)
• Party issues notice of dispute
• Adjudicator appointed in 7 days
• Adjudicator has 28 days to issue decision
• Introduced under ‘Housing Grants, Construction & Regeneration Act 1996
• Can be overturned by Arbitration of Litigation
• Binding and enforceable in the TCC (Technology and Construction Court)

Question 41

What are the time frames of Adjudication?

Answer 41

Can take up to 28 days to complete, this can be extended to 42 days with agreement from both parties.

Question 42

Is Adjudication binding?

Answer 42

• Adjudication decisions are binding unless and until they are revised by subsequent arbitration or litigation after practical completion, or by agreement between the parties (hence the term ‘pay now argue later’).
• There is no right of appeal and limited right to resist enforcement.
• Generally, adjudicators do not have the power to award costs (other than their own fees and expenses).
• Adjudication must adhere to strict timescales and typically takes up to 28 days.

Question 43

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

Answer 43

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

Question 44

What are the time frames of Adjudication?

Answer 44

Can take up to 28 days to complete.

Question 45

What is Litigation?

Answer 45

Lawsuit within a court of law.

Advantages
* Binding but can be appealed
* Can deal with several claims at once

~~~
Disadvantages
* Adversarial and formal
* Publicly exposed
* Expensive
* No influence over choice of judge or hearing details

Question 46

What is Litigation?

Answer 46

The courts have inherent jurisdiction to hear a dispute in respect of just about anything. Ianthe absence of any other procedure, the parties will have a right to refer their matter to an appropriate court. The procedure is governed by the Civil Procedure Rules, and the nature, complexity and value of the dispute will determine which court will hear a particular dispute. Courts have the widest jurisdiction and in addition to determining disputes and declarations, they can also issue Charging Orders, summon witnesses and involve the third parties in the dispute as necessary

Question 47

Why would you go for litigation?

Answer 47

Litigation allows you to bring multiple disputes to the table to be heard and can bring unwilling parties in.

Question 48

What are the differences between arbitration and litigation?

Answer 48

Litigation is more adversarial but allows you to address multiple disputes whereas arbitration only allows you to handle one dispute at a time. Litigation also only requires one parties consent to proceed. Litigation does not have a maximum time frame to resolve the issue. The Arbitrator is also predetermined in the contract whereas you do not get a choice of the judge assigned.

Question 49

What is the difference between Mediation and Conciliation?

Answer 49

• Mediation is a voluntary procedure, which involves the appointment of a third party mediator, who will help to facilitate negotiations between parties. Them aim of mediation is to help the parties reach an amicable agreement.
• Conciliation is also a voluntary procedure, which involves the appointment of a third party Conciliator. The role of the conciliator is to also facilitate negations, however the Conciliator will create a settlement proposal.

Question 50

What is the difference between arbitration and adjudication?

Answer 50

• Arbitration is a procedure in which both sides agree to let an impartial third party, the arbitrator, decide the case
• The arbitrator may be a lawyer, or may be an expert in the field of the dispute, or in some cases, an arbitration panel
• The arbitrators decision, known as an award, is legally binding and can be enforced through the courts
• Normally, there is no appeal, however there are exceptions in which appeals may be accepted
• In adjudication, the decision is the responsibility of a third party adjudicator selected by the parties to the dispute
• Adjudication decisions are binding unless and until they are revised by subsequent arbitration or litigation after practical completion, or by agreement between the parties (hence the term ‘pay now argue later’)
• There is no right of appeal and limited right to resist enforcement
• Generally, adjudicators do not have the power to award costs (other than their own fees and expenses)
• Adjudication must adhere to strict timescales and typically takes up to 28 days

Question 51

What is the different between mediation and conciliation?

Answer 51

• The mediator is a neutral party who help parties to rebuild business relationships and help them to work out a solution that is mutually agreeable
• There parties are directly engaged in the discussions
• It is non-binding and parties can revert to arbitration or litigation at any time
• Conciliation has the same aims than mediation but the processes are different
• The conciliator is usually a figure of authority that the parties have turned to for guidance
• The conciliator makes suggestions and the parties make the final decisions.

Question 52

Why might you choose Arbitration over Litigation?

Answer 52

• Arbitration is more private
• You get control over the arbitrator and the duration.
• The arbitrator can amend the contract
• Arbitration deals with any disputes arising out of or in connection with the contract.

Question 53

Why Might you choose Litigation over Arbitration?

Answer 53

• Multiple but separate disputes can be heard under the same case.
• On a statutory basis, can bring unwilling parties into litigation

Question 54

What are the ADR measures ?

Answer 54

Question 55

What is Merrett v Babb ?

Answer 55

• Court case in 2001
• Babb had carried out a valuation as an employee of a company for a house purchased by Merrett
• Valuation later found to be negligent
• The original company no longer existed
• Court ruled Merrett could pursue the individual – Babb – for the losses
• Big shock in the industry

Question 56

What are the main forms of dispute resolution in order ?

Answer 56

• Mediation
Mediation involves an independent trained mediator who facilitates communication between the two parties having the dispute, with the aim of achieving a settlement or resolution. The mediator will discuss the issues and try to help the parties reach an agreement, but will generally not offer their own opinions or assessment.
• Conciliation
Conciliation is generally used for employment situations rather than commercial disputes. Conciliation is a compulsory process before an individual wishes to bring a claim to the Employment Tribunal. The conciliator will discuss the issues and try to help the parties reach an agreement, often providing their own opinion after assessing the situation and the different arguments. Their opinion may help to form a settlement or achieve a conclusion to the dispute.
• Arbitration
This is more formal than mediation, and involves a process in which the dispute is resolved by the decision of an arbitrator (a nominated third party who is qualified to handle arbitration). The arbitration process can be particularly useful in disputes which require an understanding of technical knowledge and where privacy is important (eg to avoid disclosure of commercially sensitive information) or if there is an international element (i.e. to avoid multiple legal jurisdictions). It runs as a tribunal process and decisions are binding. Many contracts will contain an arbitration clause, which requires arbitration to be used in the case of a dispute.
• Adjudication
This form of ADR is generally reserved for disputes which arise out of construction contracts. It is a relatively formal process which involves: providing a written Notice of Adjudication which sets out the brief details of the dispute; appointment of an agreed adjudicator; serving a referral notice which sets out the dispute in detail by the aggrieved party; a response to this referral notice (essentially the defence); and finally a decision being reached by the adjudicator within 28 days of the referral notice. This decision is final and binding.

Question 57

Why might you want to keep disputes out of the courts ?

Answer 57

For costs and reputational damage

Question 58

Give me some examples of the requirements of the Housing Grants and Construction Regeneration Act.

Answer 58

• The right to adjudication
• The right to staged payments and dates
• The right to suspension for non-payment

Question 59

Tell me about a conflict of interest check you have carried out.

Answer 59

N/A

Question 60

What is the practice of dual agency/double dipping?

Answer 60

Dual agency, also known as double dipping in real estate, occurs when one agent or brokerage represents both the buyer and the seller in a single transaction. This can lead to conflicts of interest, as the agent must serve the best interests of both parties, potentially compromising advocacy and transparency.

Question 61

Explain the role of the Civil Procedure Rules (CPRs).

Answer 61

The Civil Procedure Rules (CPR) in the UK, established by the Royal Institution of Chartered Surveyors (RICS), govern the resolution of civil disputes related to property and land matters. These rules provide a structured framework for the conduct of litigation involving property disputes, surveys, valuations, and related issues.

Question 62

What does CPR Practice Direction 35 relate to?

Answer 62

Practice Direction 35 covers various aspects related to expert witnesses, including their appointment, duties, and the content of their reports. It also outlines the process for challenging the evidence provided by expert witnesses and the court’s role in managing and facilitating the expert witness process during litigation.

Question 63

What tribunals are you aware of and when do they get involved?

Answer 63

Lands Tribunal
An expert tribunal established by the Lands Tribunal & Compensation Act (NI) 1964. Although it is a court, it includes valuer as well as legal members. The Tribunal deals both with appeals from some other bodies and also disputes referred directly to it. Lands Tribunal examples: compensation for the compulsory purchase of land. discharge or modification of land affected by a ‘restrictive covenant’ compensation for the effect on land affected by public works.

The RICS’ Regulatory Tribunal is independently led by its Presiding Chair, Alexandra Marks CBE (Independent Member). It consists of both Independent Members and RICS Members, who form the Panels and Single Member which independently determine regulatory cases including disciplinary cases against RICS Members and Firms.

Question 64

What is a Scott Schedule and when would one be used?

Answer 64

A Scott Schedule is a document commonly used in construction and building disputes to provide a structured breakdown of the various elements of a construction project, associated costs, and the parties’ positions in a dispute. It is typically used during arbitration, litigation, or other forms of dispute resolution.

Question 65

Explain the proposed provisions of the Commercial Rent (Coronavirus) Bill.

Answer 65

Enabling relief from payment of certain rent debts under business tenancies adversely affected by coronavirus to be available through arbitration; and for connected purposes.

Question 66

What form of ADR will be used to recover commercial rent arrears due to Covid?

Answer 66

Disputes about Covid rent arrears may now be determined by arbitration. The Commercial Rent (Coronavirus) Act 2022 sets out a binding arbitration procedure for the resolution of rental disputes.

Question 67

What is the Technology & Construction Court and what is its role?

Answer 67

A specialist court, which deals principally with technology and construction disputes

Question 68

Explain what the role of the RICS Low Value Dispute Adjudication service is.

Answer 68

A simple and cost effective procedure.

The service is aimed at disputes where the amounts claimed are for £50,000 or less, and the issues in dispute are relatively uncomplicated.