Conflict Avoidance, Management and Dispute Resolution Flashcards
What is alternative dispute resolution?
Traditional dispute resolution sees a dispute put before a judge. Alternative dispute resolutions offer different processes to resolve a dispute often less formal, cheaper and quicker than going through the courts.
What are some examples of dispute resolution?
Mediation,
Adjudication,
Arbitration,
Professional Arbitration on Court Terms,
Independent Expert Determination,
Early Neutral Evaluation
CAP
Dispute Resolution Boards
Dispute Resolution Advisers
What is mediation?
Mediation is a one or two day process. An independent mediator is appointed by agreement of both parties. Each party has their own private discussion space and a larger space where they both negotiate. Approximately tow thirds of mediations are solved on the day or shortly after.
What is the mediation process?
Documents are exchanged prior to meeting,
Opening statements are made by both parties,
Mediator facilitates discussion on key aspects of the dispute,
Negotiation of a settlement.
What are some common causes of disputes?
Frequent causes of disputes in construction and engineering are:
- Errors and/or omissions in the management of the contract
- Failure by an employer, contractor or subcontractor to
understand or comply with detailed contractual obligations - Submission of poorly drafted, flawed and/or unfounded
claims - Contradictory priorities of contracting parties
- Poorly communicated design information and/or employer requirements
- Poor contract management
- Contract ambiguity
- Unclear compensation event procedure
What are some drawbacks to mediation?
- Not compulsory;
- Concerns exist around the enforceability of a mediation agreement;
- All parties must agree to a resolution as the result is not guaranteed;
- Can be difficult if either party are withholding information;
- Mediation may not be appropriate if one of the parties required public disclosure;
- Utilising the services of an unskilled mediator can contribute to an unproductive resolution;
- An unwillingness of one or both of the parties to cooperate can make the whole process a waste of time, effort and money;
- If the dispute cannot be resolved in mediation the cost of mediation will have been wasted;
- During the mediation process either party can withdraw from proceeding at any time;
- There is the possibility that information may be given away to the other party during the mediation process that could benefit the other party.
What are the benefits to mediation?
- Mediation can be carried out relatively quickly compared to litigation, taking on average between 1 to 2 days;
- If both parties agree to mediation this clearly demonstrates a willingness to achieve a negotiated solution;
- The appointed mediator will be independent, they will not advise or provide judgement;
- The mediator is there to facilitate and guide the discussions between the parties, with the primary objective of resolving the dispute;
- It is the parties involved in the mediation process that arrive at a final solution and not the mediator. Remain in control of their dispute;
- It is a flexible process that provides parties access to a wide range of outcomes that are not available in litigation. For example, courts will usually order one party to pay money to the other party, whereas in mediation the parties come to their own agreement and other things can be taken into account;
- If a solution cannot be achieved then other options are still available;
- The process will attempt to preserve the relationship between the parties;
- Mediation can allow each party to hear the opposing view in a non-confrontational environment;
- Both parties must sign an agreement of the final recommendation in order for it to be binding;
- The parties via the mediator can bring other matters outside of the contract itself into the mediation in order to assist a commercial settlement;
- It is a confidential process and anything discussed at mediation is considered ‘without prejudice’ and therefore cannot be used as evidence in any subsequent tribunal.
What are dispute boards?
The term dispute board (DB) is a generic one covering:
- Dispute review boards (DRB) make recommendations rather than binding decisions.
- Dispute adjudication boards (DAB) make a binding decision about any dispute referred to it.
- Combined dispute boards (CDB) rules provide that the dispute board could make a recommendation or a binding decision.
- Dispute resolution advisor (DRA) is a single person dispute board.
A DB is appointed at the outset of the project. It is most usually encountered on substantial major projects and will comprise three individuals. There are a number of ways that these three could be
appointed, but most usually the employer appoints one member, and the contractor another. Those two members then (with the agreement of the parties) nominate a chairperson.
What are some advantages of dispute boards?
Confidentiality – issues arising between parties are not rehearsed in public. The way matters are resolved and outcomes of decisions and recommendations remain private
Expertise – the members of a DB are selected for their subject matter knowledge and expertise in negotiation and conflict management.
Flexibility – the parties can agree the procedure and timetable for utilising a DB to their contract in advance, and can agree any changes to it during the course of the project.
Prevention of disputes – the existence of a DB which is wholly informed and aware of all matters relating to the project can prevent frivolous claims. A DB encourages parties to work collaboratively, and incentivises them to strive for negotiated resolution of issues without the need for the DB to intervene.
Relationships – the DB process is usually underpinned by a commitment by the parties to collaborate and ensure conflict situations do not arise and, if they do, that they are resolved quickly and amicably.
Information and communication – Regular site visits and document reviews give a DB a high level of knowledge of how a project is progressing and foresight of potential problems in the future. If there is disagreement between the contracting parties on any matter, the DB will have a deeper understanding of what is going on than any arbitrator or tribunal, who would be appointed after a dispute has arisen.
The intelligence acquired by a DB can be used to ensure parties are fully informed. This helps parties to avoid disputes and resolve issues early and quickly.
What are some disadvantages of dispute boards?
- Cost. The cost of establishing and maintaining the dispute board for the duration of the project.
- Binding nature of decision. Depending on the nature of the board, the decision may not be binding on the parties.
What is adjudication?
The Housing Grants, Construction and Regeneration Act 1996 imposes a right to adjudication in construction contracts. If parties to a construction contract do not agree an adjudication procedure, then one is imposed by the Scheme for construction contracts. 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.
What are some advantages of adjudication?
-The parties can select the expert or the characteristics of the expert.
-The expert can act as an investigator.
-Seldom lengthy oral arguments or legal submissions.
-No cross examination or formal evidence.
-Streamlined, speedy (28 days) and flexible procedures as agreed between the parties.
-Less expensive.
-Can ratify or dismiss by agreement
What are some disadvantages of adjudication?
-The expert cannot go beyond the jurisdiction specified in the contract.
-The expert determination is not supported by statute.
-The expert powers are limited.
-The expert’s determinations must be enforced by commencing court proceedings.
What introduced statutory adjudication?
The Housing Grants, Construction and Regeneration Act 1996
What did the case Enviroflow Management Ltd v Redhill Works 2017 establish?
Enviroflow Management Ltd v Redhill Works 2017 made it possible to recover adjudication cost but only if previously stipulated in writing
What is arbitration?
Arbitration is a private, contractual form of dispute resolution. It is a procedure in which both sides agree to let an impartial third party, the arbitrator, decide the case in a tribunal. 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 arbitrator’s 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. Arbitrators have the power to ascertain facts rather than just listen to submissions, and to order costs.
For arbitration to apply, the contract between the parties must contain a written agreement to arbitrate. Where it applies the parties might choose to refer to or incorporate an arbitration procedure, such as the Construction Industry Model Arbitration Rules. Alternatively, the arbitration can simply be covered by the applicable legislation, such as the Arbitration Act 1996. Many jurisdictions around the world contain legislation dealing with arbitration, often based upon the United Nations Commission on International Trade Law (UNCITRAL) Model Arbitration Law.
What are some advantages of arbitration?
- It is private - there is no public record of any proceedings, although not necessarily confidential.
- Speed, although this depends very much on the manner in which the arbitrator conducts the arbitration.
- The parties can agree on an arbitrator with relevant expertise in the matter. The arbitrators award can be enforced as a judgement of the court.
