Conflict avoidance, management and dispute resolution procedures Flashcards
What is Dispute Resolution?
The process of resolving a dispute or conflict between different parties.
What is a conflict?
A disagreement between two or more parties.
How can disputes be avoided?
– Effective communication
– Written records of meetings
– Clear scope of service
– Clear and concise contract documents
What is Alternate Dispute Resolution (ADR)?
Alternative ways of resolving disputes without the need to go to court.
Non-formal means:
– Negotiation
– Mediation
– Conciliation
Formal means:
– Adjudication
– Arbitration
What is negotiation?
The parties attempt to resolve the difference themselves.
The power to settle the dispute rests with the parties.
What is mediation?
The parties agree on an independent, third-party to facilitate discussions between them, with the goal of reaching a settlement.
The power to settle remains with the parties, but the process is led by the mediator.
JCT Standard Building Contract (SBC11 clause 9.1) requires each party to give serious consideration to a request by the other to use mediation.
What is conciliation?
Conciliation is similar to mediation with a third-party to facilitate discussions between them.
What’s the difference between mediation and conciliation?
Very similar in that they encourage the coming together of the parties to find a mutually acceptable outcome.
Conciliation differs from mediation in that the parties are often in need of restoring damaged relationship, either personal or business.
Conciliator: Recommends a way forward /encourages a decision (non-binding recommendation)
Mediator: Encourages the coming together of both parties by acting as a messenger only.
What is Adjudication?
Usually initiated when mediation, fails to find a resolution.
ADR specific to construction contracts under the Housing Grants Construction and Regeneration Act 1996.
Either party may request the appointment of an adjudicator within 7 days of serving the Notice of Dispute.
The adjudicator has 28 days from issue of the referral to issue a decision. (Note: Adjudication can be extended by 2 weeks with mutual consent).
The adjudicators decision is binding and enforceable through the Technology and Construction Court (TCC).
However, either of the parties can escalate the dispute to arbitration or litigation, or if settled by agreement.
What is Arbitration?
Arbitration is a tribunal process. The decision is made by the arbitrator who is an independent third party.
Both parties put their case forward to the arbitrator to reach a decision based on evidence sometimes at a formal hearing.
The arbitrators decision is called an award which is legally binding.
This decision can only be overruled by a court order and legal costs are usually awarded to the successful party.
For arbitration to apply, the contract between the parties must contain a written agreement to arbitrate (usually found in JCT).
Arbitration commences with a notice to concur which provides for agreement on the appointment of an arbitrator, failing which an arbitrator may be appointed by a nominating body (which should be named in the contract).
Advantages: Done in private (no public record although not necessarily confidential).
Disadvantages: Limited appeal rights
What is Litigation?
– Litigation resolves dispute by legal action in court.
– The court is able to enforce or determine one party’s rights or obligations.
– The decision is legally binding.
What is an independent expert?
– An independent expert is appointed jointly by the two parties to give an expert opinion on the matter to be decided.
– The expert’s decision is not enforceable by the courts and they are liable for action for negligence.
– Impartial.
– Acting for the court.
What is the difference between the types of dispute resolution?
Mediation and conciliation are the least formal procedures and focus on the facilitation of communication with a view to resolving a dispute.
Adjudication can be escalated to Arbitration or Litigation whereas Arbitration is final and binding can only be overruled by a court order.
Arbitration is the most formal type of ADR, with limited rights of appeal.
Arbitration is a more expensive and time consuming approach than adjudication.
Arbitration and litigation have many similarities – in both cases the outcome is final and binding.
The advantages of arbitration include privacy – arbitration can be kept private whereas litigation is open to public and press.
What is the role of RICS in dispute resolution?
- Provide Guidance notes;
- Training;
- Appointment of arbitrators.
What would your considerations be prior to selecting a form of dispute resolution?
- The cost of dispute resolution in proportion to the claim being sought.
- The timescales involved.
- The impact on business relationships and reputation.
How do you conduct negotiations?
- Investigation: Gather all relevant information
- Meeting: Arrange a meeting with the client to discuss negotiable items /non-negotiable items.
- Determination: Determine the alternative outcomes.
- Presentation: Present the information gathered.
- Bargaining: Each party discusses their goals and seeks to get an agreement.
- Confirmation: Confirmation of next steps to bring the negotiations to a close.
What do you understand to be the difference between an arbitrator and an independent expert?
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.
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 is jointly appointed by the parties in order to give an expert opinion. An independent expert’s decision is not enforceable directly by the courts and they are not liable for negligence.
What is the TCC?
Technology and Construction Court (TCC) is the part of the High Court that deals with construction related litigation.
Minimum claim of £250k
What types of disputes have you come across in your experience and how have these been resolved?
I negotiated over an extension of time at Salterbeck Trading Estate. The contractor requested an extension of time for adverse weather conditions…
What is CAP?
Conflict Avoidance Process
Government-endorsed procedure that the RICS have signed up for.
This can be written into contracts to help parties resolve disputes out of court.
Quicker and cheaper than litigation.
* Helps issues nip issues in the bud before they escalate.
* It is pay as you go – you only pay for it when you use it,
Housing Grants Construction and Regeneration Act: What are some of the key elements?
- The right to adjudication.
- The payment dates must be set out in the contract.
- The right to suspend work for non-payment /late payment (failure by an employer to pay an amount due)
- The right to be informed about the amount due.
What would you do if a dispute arose?
In the first instance I would speak to the parties individually to reach an agreement.
Name some negotiation tactics?
Collaboration (win /win)
Competing (win /loose)
Avoiding (loose /loose)
Compromising (split the difference)
What is the Dispute Resolution Board?
Board of independent professionals that help to avoid and/or resolve disputes on construction projects.
Independent panel of three members:
– 2 technical
– 1 legal (chairman)
The panel is selected by the contractual parties usually one technical each and the two technical members will will choose the third member.
Where can you go to appoint an adjudicator?
This is named in the contract; this can be:
– RICS
– RIBA
What are the challenges covid /Brexit had on dispute resolution?
Delays to projects through materials causing extended lead times /delays.
Activating the force major clause in JCT.
Who enforces the requirements for adjudication?
Housing Grants Construction Regeneration act 1996.
However, if the contract doesn’t stipulate include it is a statutory right under the Contracts Act.
Without prejudice meaning?
Informal conversations.
Statements which are made without prejudice is a genuine attempt to settle a dispute and cannot be used in court as evidence of admissions against the party that made them.
