Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

What is dispute resolution?

Answer 1

Actions and processes taken to resolve contractual disagreements between parties.

Question 2

Name some forms of Alternative Dispute Resolution

Answer 2

1. Mediation
2. Conciliation
3. Negotiations

Question 3

Name some formal methods of dispute resolution

Answer 3

1. Arbitration
2. Litigation
3. Adjudication

Question 4

What would your considerations be prior to selecting a form of dispute resolution?

Answer 4

1. The cost of dispute resolution in proportion to the claim being sought.
2. The timescales involved.
3. The impact on business relationships and reputation.

Question 5

What is conciliation?

Answer 5

1. The dispute resolution process is similar to mediation and relies on an independent third party to aid reaching an agreement.
2. The conciliator has no authority to seek evidence or call witnesses.
3. Conciliators are not able to make binding decisions.
4. The conciliators role is to act primarily as the messenger and to encourage diplomacy.

Question 6

What is mediation?

Answer 6

1. This is an alternative form of dispute resolution and relies on bringing in an impartial third party to mediate and guide a decision.
2. The mediator tries to encourage a coming together of parties in order to facilitate a decision as opposed to acting only as a messenger which is the key differentiator between mediation and conciliation.
3. Mediation encourages the coming together of parties and reaching an agreement.

Question 7

What is negotiation?

Answer 7

1. Negotiation is where the parties reach an agreement through an informal private or facilitated discussion.
2. Both parties will agree to settle the dispute either at a high level or in detail and agree to be bound by this settlement.

Question 8

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

Answer 8

1. Both parties are satisfied with the outcome and feel that a fair and reasonable compromise was reached.
2. A partnering approach is adopted with both parties feeling as though their long-term relationships and reputations have been maintained.

Question 9

What is adjudication?

Answer 9

1. Adjudication is a statutory form of dispute resolution procedure available in the UK.
2. It is a relatively simple and efficient method of resolving disputes without engaging in lengthy and expensive court proceedings.
3. Adjudication relies on an independent third party who considers the claims of both parties.
4. A binding decision is made by the adjudicator which can be appealed either through litigation or arbitration.
5. It has the advantage of being time sensitive with a decision being made within 28 days.

Question 10

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

Answer 10

The Housing Grants, Construction and Regeneration Act 1996 (The Construction Act).

Question 11

Which contracts does adjudication apply to?

Answer 11

All contracts in England and Wales.

Question 12

What if a building contract does not contain provisions for adjudication?

Answer 12

1. Parties still have the statutory right to adjudication assuming the contract qualifies under the construction act.
2. Failing this the Scheme for construction contracts will apply in its entirety.

Question 13

Explain your understanding of the arbitration process.

Answer 13

1. Arbitration is a procedure for the resolution of disputes which is under the control of the parties.
2. Certain conditions must be met e.g. a genuine dispute or difference between the parties must have occurred with an award being capable of enforcement.
3. A binding agreement must be reached to escalate the matter to arbitration.
4. The proceedings are undertaken in a private setting meaning the reputations of both parties can be preserved to an extent.

Question 14

Can you explain in detail the difference between arbitration and litigation procedures?

Answer 14

Arbitration:
- Governed by the Arbitration Act 1996.
- There must be an agreement to enter into arbitration by both parties.
- Parties have a wide degree of discretion as to how proceedings are conducted.
- Procedures are similar to litigation with formal submissions by both parties, expert evidence, hearings and a decision by the arbitrator.

Litigation:
- Proceedings are conducted in court.
- Is a public process that follows civil procedure rules.
- Despite having high costs the process can deal with multi-party disputes and civil procedure rules which aim for accessibility, speed and efficiency.