JCT Section 9 Settlement of Disputes Flashcards
What are the 3 main negative effects of disputes?
1) Time consuming.
2) Expensive.
3) Destroys Employer/Contractor relationships.
How can disputes be avoided? (3 points)
1) Using clear language in the contract
2) Having regular discussions between the Employer and the Contractor
3) Detecting problems early.
How should the Employer be advised to handle a dispute in the first instance?
Direct negotiation is recommended as it costs nothing, can be dealt with quickly and keeps good relationships.
What are the 3 forms of alternative dispute resolution in the JCT contract?
1) Mediation.
2) Adjudication.
3) Arbitration.
What is mediation?
Mediation is the least formal step of alternative dispute resolution which is a negotiation with the assistance of a neutral third party.
When is mediation used?
Mediation is used when conventional negotiation has failed or is making slow progress.
What are the 3 advantages of mediation?
1) Cost effective.
2) Civil.
3) Time efficient.
What are the 2 disadvantages of mediation?
1) Decision not enforceable by law.
2) Could be a waste of time if a decision is not reached.
Which form of alternative dispute resolution is covered by the Housing Grants, Construction and Regeneration Act 1996?
Adjudication
What is adjudication? (4 Points)
Either party can refer to adjudication where an adjudicator is appointed by one of the governing bodies (eg. RIBA/RICS). The adjudicator shall be an individual with appropriate experise in the area of the dispute. The adjudicator ascertains the facts and relevant law enabling them to come to a decision which is binding unless overthrown through arbitration or litigation.
How long does adjudication take?
The adjudicator gives a decision within 28 days of referral.
What are the 4 advantages of adjudication?
1) Quick.
2) Cost effective.
3) Maintains working relationships.
4) Avoids delay.
What are the 2 disadvantages of adjudication?
1) More expensive than mediation.
2) Takes more time than mediation.
What is arbitration? (7 Points)
Either Party can refer a dispute to arbitration by serving the other Party with a notice. The arbitrator is usually a senior lawyer and is agreed by the Parties. The Parties and arbitrator meet in person to conduct the hearing where the Parties present arguments and evidence. The arbitrator awards a decision in writing and the decision is final and binding. The arbitrator has a duty to act fairly and impartially.
When can arbitration be used?
Arbitration can only be applied if it is stated that Article 8 and clauses 9.3 to 9.8 apply - this is not always the case.
What are three advantages of arbitration?
1) Finality - the grounds for challenging the arbitrators decision are limited.
2) Privacy - arbitrations are closed whereas court proceedings are open to the public.
3) Speed and convenience compared to court proceedings - courts case dates are determined by the courts and can be drawn out. Arbitration dates and procedures can be decided on between parties.
What are the 2 disadvantages of arbitration?
1) Cost - the parties need lawyers and must bear the cost of the arbitrator and venue.
2) Takes longer than mediation and adjudication.
Which type of law does arbitration come under?
Arbitration is covered by statute law.
Which section of the Housing Grants, Construction and Regeneration Act, Part II covers disputes?
Section 108 - The right to refer disputes to adjudication.
Which NEC4 option covers disputes subject to the Housing Grants, Construction and Regeneration Act?
Option W2
What is litigation?
Formal court proceedings which are an uncommon way for construction disputes to be resolved.
What are the disadvantages of litigation?
Disputes that make it all the way to litigation can cause high profile repetitional damage. Proceedings are drawn out and costly.
