JCT Section 9 Settlement of Disputes

Question 1

What are the 3 main negative effects of disputes?

Answer 1

1) Time consuming.
2) Expensive.
3) Destroys Employer/Contractor relationships.

Question 2

How can disputes be avoided? (3 points)

Answer 2

1) Using clear language in the contract
2) Having regular discussions between the Employer and the Contractor
3) Detecting problems early.

Question 3

How should the Employer be advised to handle a dispute in the first instance?

Answer 3

Direct negotiation is recommended as it costs nothing, can be dealt with quickly and keeps good relationships.

Question 4

What are the 3 forms of alternative dispute resolution in the JCT contract?

Answer 4

1) Mediation.
2) Adjudication.
3) Arbitration.

Question 5

What is mediation?

Answer 5

Mediation is the least formal step of alternative dispute resolution which is a negotiation with the assistance of a neutral third party.

Question 6

When is mediation used?

Answer 6

Mediation is used when conventional negotiation has failed or is making slow progress.

Question 7

What are the 3 advantages of mediation?

Answer 7

1) Cost effective.
2) Civil.
3) Time efficient.

Question 8

What are the 2 disadvantages of mediation?

Answer 8

1) Decision not enforceable by law.

2) Could be a waste of time if a decision is not reached.

Question 9

Which form of alternative dispute resolution is covered by the Housing Grants, Construction and Regeneration Act 1996?

Answer 9

Adjudication

Question 10

What is adjudication?

Answer 10

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.

Question 11

How long does adjudication take?

Answer 11

The adjudicator gives a decision within 28 days of referral.

Question 12

What are the 4 advantages of adjudication?

Answer 12

1) Quick.
2) Cost effective.
3) Maintains working relationships.
4) Avoids delay.

Question 13

What are the 2 disadvantages of adjudication?

Answer 13

1) More expensive than mediation.

2) Takes more time than mediation.

Question 14

What is arbitration?

Answer 14

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.

Question 15

When can arbitration be used?

Answer 15

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.

Question 16

What are three advantages of arbitration?

Answer 16

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.

Question 17

What are the 2 disadvantages of arbitration?

Answer 17

1) Cost - the parties need lawyers and must bear the cost of the arbitrator and venue.
2) Takes longer than mediation and adjudication.

Question 18

Which type of law does arbitration come under?

Answer 18

Arbitration is covered by statute law.

Question 19

Which section of the Housing Grants, Construction and Regeneration Act, Part II covers disputes?

Answer 19

Section 108 - The right to refer disputes to adjudication.

Question 20

Which NEC4 option covers disputes subject to the Housing Grants, Construction and Regeneration Act?

Answer 20

Option W2

Question 21

What is litigation?

Answer 21

Formal court proceedings which are an uncommon way for construction disputes to be resolved.

Question 22

What are the disadvantages of litigation?

Answer 22

Disputes that make it all the way to litigation can cause high profile repetitional damage. Proceedings are drawn out and costly.