Dispute Resolution Flashcards
What clauses in the NEC 3 deal with conflict avoidance?
- NEC3 adopts a two-tier approach to dispute resolution:
- The first step is adjudication.
- The second step is either arbitration or litigation.
- “a spirit of mutual trust and co-operation” (clause 10.1)
- Option W2 – referral to adjudication
NEC3 provides an adjudication procedure for use in the UK when the HGCRA applies.
What clauses in the NEC 4 deal with conflict avoidance?
- Option W1, Option W2 and the new Option W3
- Amendments to Options W1 and W2 provide for the initial referral of all disputes to the parties’ Senior Representatives
- The new Option W3, is only applicable where the Construction Act does not apply and provides for the obligatory referral of all “potential disputes” to an impartial standing DAB (Dispute Avoidance Board) before any subsequent referral to a tribunal.
What clauses in the JCT deal with conflict avoidance?
- Section 8 ‘Settlements of Disputes’
- The usual approach in the JCT contracts is an express reference to adjudication in the Articles of Agreement, together with a further express reference to arbitration or legal proceedings
What is ADR?
- Alternative Dispute Resolution – several processes that can be used to resolve a dispute or claim.
- Mediation, Negotiation, Adjudication
What is Mediation?
- Parties agree a third-party individual who facilitates discussions between both parties to reach an agreement.
o Non-binding
o Encourages coming together to agree
o Undertaken by mutual agreement
o Can be initiated at any time.
What is negotiation?
- Where parties work out between them how to resolve issues that have arisen.
o Negotiation ends when both parties come to an agreement
o Suitable for simple matters
o Requires co-operation of both parties.
What is conciliation?
- Similar to mediation, a conciliator seeks to facilitate a settlement between both parties.
- Each party states their position and the conciliator attempts to help work towards a compromise.
o Conciliator is an independent party helping to aid agreement
o Conciliator prepares a recommendation
o Recommendation becomes final and binding if neither party suggests adjudication or arbitration.
What is adjudication?
- Adjudicator gets appointed, they get all referral documentation, the adjudicator sets a timetable which permits the other party to issue a response and the adjudicator makes a decisions within 28 days.
How does Adjudication work?
- Once a dispute has been agreed that it cannot be resolved, either party can serve a notice of its intention to refer the dispute.
- Within 7 days of the notice being issued, the referring party must serve it’s referral
- If the referral is not served within 7 days, the adjudication will be void.
- Referral must contain detailed explanation of the referring party’s claim with supporting documentation.
- Within the 7 day period, the referring party must secure the appointment of an adjudicator (likely to be named in the contract)
- Following appointment, the adjudicator will set out a timetable to issue a response to the referral
- Adjudicator must make his decision within 28 days of the referral.
Can the decision period of 28 days be extended?
- Yes, to 42 if both parties agree.
Is adjudication binding?
- Yes, unless the adjudicator has acted outside their jurisdiction or was biased.
Is there an appeal process?
- No, but both parties can take the dispute to litigation.
Who pays for adjudication?
- Both parties are jointly liable for fees and reasonable expenses.
What does it mean when a dispute has been crystalised?
Both parties agree that there is a dispute and it does need to be taken to ADR/Court.
What is litigation?
- Going to court for a judge to make a decisions on the case.
o Judges make agreements which are binding
o Judge can over-ride any previous made agreement
o It is costly, in the public eye and time consuming.
What is an expert Witness?
- A person whose experience and knowledge is beyond what is expected of a layman.
What are techniques for conflict avoidance?
- Clearly stating in all tender docs and contract docs exactly what is expected of each party
- Ensure continuous, effective communication
- Follow company procedures and guidance
- Follow RICS professional standards.
How do you manage conflict?
- Raise the issue with all parties and try to resolve it immediately through communication and negotiation
- Face to face is usually the best way to find a resolution.
How do you select the right procurement route to avoid conflict?
- Some procurement routes are more collaborative than others.
- For example, for a client who isn’t knowledgeable, they may select a D&B procurement route so that all the risks or potential issues would sit with that contractor.
- You’ve also got frameworks and partnering where both parties work collaboratively to reach a common goal.
What is the difference between Adjudication and Conciliation?
- Similar to mediation, a conciliator seeks to facilitate a settlement between both parties.
However, the Conciliator issues a recommendation report which becomes binding.
What is pre-action protocol?
Pre-action protocol applies to all construction and engineering disputes.
It explains the conduct and set out the steps parties should take before commencing proceedings of civil claims.
the aim of pre-action protocols is to encourage early dispute settlement without needing the court’s involvement
What conditions would the court expect the pre-action protocol to have been met?
The court will expect parties to have exchanged information sufficient for the following conditions to have been achieved:
- An understanding of each other’s position.
- Decisions made about how to proceed.
- Attempts made to settle without proceedings.
- Consideration of a form of Alternative Dispute Resolution (ADR).
- Reduce the costs of resolving the dispute.
What are the advantages of litigation?
- Highest quality decision making
- Judges can compel the parties to comply with time frames and have powers of sanctions for non-compliance
- Judges have the power to make orders to provide interim relief to protect a party’s position pending the final judgement
- There are defined rights of appeal in cases where errors of fact or law are made
What are the disadvantages of litigation?
- Expensive if not well managed
- Very time consuming - 12 - 18 months
- Potentially longer time period to obtain a judgment
- In the public eye
- Judgment will be subject to appeal
What are the different types of mediation?
- Facilitative mediation
- Evaluative mediation
- Settlement mediation
- Therapeutic/Transformative mediation
What are the advantages of mediation?
- Can be carried out quickly
- Appointed mediator is independent and will not provide judgement.
- Flexible process - wide range of outcomes
- It is confidential
What are the disadvantages of mediation?
- Either party can withdraw at any time
- Non-binding and
- Non compulsory
- If no decision is reached, cost of mediation is wasted.
What are the advantages of arbitration?
- It is convenient for both parties
- Is private
- Arbitrator makes a binding decision.
What is arbitration?
- Is a form of ADR.
- You both put your case to an independent person called an arbitrator.
- Arbitrator listens to both sides, looks at the evidence you’ve sent in and decides what the outcome should be.
- When the arbitrator makes a decision, this is called an award and it’s legally binding.
What are the dis-advantages of arbitration?
- There is limited scope to challenge the decision of an arbitrator
- Could be costly if it doesn’t work out and an appeal is made
- Pre-arbitration procedures are often not as clear and direct
What are the advantages of negotiation?
- Completely private
- Quick resolution, maintaining relationship
- Relatively informal method of resolution
What are the dis-advantages of negotiation?
- Involving solicitor may be costly otherwise, lack of expertise
- Cannot be enforced
- No certainty, no security.
What are the advantages of conciliation?
- Conciliator is normally a legal expert in the disputed field
- Process is private
- The process is flexible
What are the disadvantages of conciliation?
- The process is not legally binding
- No appeals
- No decision is guaranteed at the end
- Process too informal
What are the disadvantages of adjudication?
- No testing of evidence or assertions provided
- Limited opportunity for appeal
- The expert cannot go beyond the jurisdiction specified in the contract
What are the advantages of adjudication?
- The parties can select the expert or the characteristics of the expert
- Less expensive
- No formal evidence required
What is Independant Expert Determination?
- An independent expert in the subject matter of the dispute, is appointed by the parties to resolve the matter.
- Usually founded in the contract
- The expert will bring their own knowledge to bear on the issues and is entitled to form a view and make a decision based entirely on their own expertise.
What is a Scott Schedule?
A Scott Schedule is an extended version of the Schedule of Dilapidations.
A Scott schedule is essentially a table with inputs from both the claimant and respondent.
What is Partnering?
- Sometimes referred to as alliancing
- partnering promotes improved performance through collaborative business relationships based on best value rather than lowest cost.
- Each party uses their strengths to support in reaching objectives/goals
- Skanska/Costain - HS2
What are some advantages of Partnering?
- Improved project outcomes in terms of cost, time and quality
- Design integration with specialists in the supply chain
- Increased customer satisfaction
What are some disadvantages of Partnering?
- The concerns of unequal commitment.
- Requires high-level management time and dedication to be successful
- Possible company cultural differences - which could cause disagreement.
What is a Framework Agreement?
A framework is an agreement with suppliers to establish terms governing contracts that may be awarded during the life of the agreement.
How do you manage conflict?
By raising Early Warning Notices, communicating with Sub-Contractors, having open and honest conversations.
How does partnering support conflict avoidance?
Partnering is about building collaborative relationships in order to minimise conflict and promote a more open system of communication.
What is a dispute board?
Dispute boards are permanent panels set up to accompany the performance of a contract.
Dispute review boards (DRB) make recommendations rather than binding decisions.
What would you consider when selecting a form of dispute resolution?
- The cost in proportion to the claim
- Timescales
- Relationships and reputation
What is a tolent Clause?
Party that requests for disputes to be settled through adjudication would bare all the legal costs of doing so.
What is a SCOTT Schedule?
Table with inputs from both parties. Claimant will set out their argument first and is passed to the respondent to set out their proposal.
Requires degree of collaboration between the parties.
What if a contract does not contain provisions for adjudication?
Parties have the statutory right to adjudicate if the contract qualifies under the HGCRA 1996
