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Contract Practice > Conflict Avoidance & ADR > Flashcards

Conflict Avoidance & ADR Flashcards

1
Q

What are the different forms of dispute resolution? (3 pillars)

A

Negotiation - natural fact finding, expert appraisal

Mediation - conciliation, neutral 3rd party

Adjudicator - Litigation, Arbitration, Expert Determination, Adjudication, Dispute Review Boards

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2
Q

What does the RICS Black Book say on the process of conflict avoidance?

A
  • Good management
  • Clear contract documents - identify risks early
  • Partnering and alliancing - building co-operative team
  • Good project management - proactive on time, money, risk
  • Good client management - client objectives
  • Good construction management - understand project & programme
  • Good design team management - plan information flow
  • Good payment practice - cash flow / valuations
  • Record keeping - site activity diary
  • Regular reporting and proactivity
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3
Q

What are the minimum requirements of a QS on conflict avoidance?

A
  • Seek clarity on documents
  • Identify works within expertise to be brought to client’s attention
  • Manage professionally the day to day conflicts / disagreements
  • Recognise escalation of disputes and keep the client informed
  • Understand outline the range of dispute resolution techniques available and when they apply under contracts
  • Recognise when specialist assistance is required
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4
Q

Can you strike out dispute resolution processes from a contract?

A

Adjudication must apply in accordance with the Construction Act / Scheme for Construction Contracts. Arbitration does not have to be selected, but if it isn’t then litigation will automatically apply.

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5
Q

What ADR procedures are in contracts you have used?

A

Mediation is mentioned within JCT contracts recommending that the parties give consideration to mediation if a dispute is to arise that cannot be resolved by negotiation. Others are adjudication and arbitration.

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6
Q

If there was no adjudication included within a contract, what would you do?

A

The Scheme for Construction Contracts would apply, therefore the parties would still have a right to refer a dispute to adjudication.

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7
Q

What timings are associated with Adjudication?

A
  • Notice of Adjudication - refer within 7 days
  • Adjudicator appointed within 7 days of notice
  • Decision given within 28 days of referral
  • Extension (if agreed by referring party) to maximum of 14 days
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8
Q

What can you tell me about adjudication?

A
  • The single greatest factor to have influenced dispute resolution in the UK construction industry
  • New proceedings in the Technology and Construction Court have reduced dramatically since the Construction Act made adjudication widely available
  • Quickest of the formal dispute resolution procedures and relatively inexpensive compared to arbitration or litigation
  • The agreed adjudicator under JCT contracts is named in the contract particulars, or the nominating body that will select one is chosen i.e. RIBA / RICS
  • The process is commenced by a notice of intention to adjudicate being served, which defines the nature of the dispute -an adjudicator is then appointed
  • Adjudicators are required to reach a decision within 28 days of referral (though this is rarely achieved and it is regularly extended!!)
  • Each party has to bear their legal costs regardless of the result -adjudicator decides who pays their fees
  • Power to settle rest with adjudicator
  • Decision is binding and enforced by courts
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9
Q

What is a pre-action protocol?

A
  • Parties to a construction dispute should comply with the Pre-Action Protocol for Construction and Engineering Disputes before commencing proceedings.
  • Courts will expect the parties to have done so.
  • A letter of claim should be issued to the other party summarising the facts, the basis upon which a claim is made, what relief they are seeking etc.
  • The objective is to make appropriate attempts to resolve disputes before commencing proceedings and to consider the use of an appropriate form of ADR to do so.
  • Woolf reforms introduced pre-action protocols in an attempt to reduce litigation.
  • Process as per adjudication. Any new issues a response is due within 14 days
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10
Q

Is adjudication binding?

A

Yes - enforced by Technology and Construction Court
May be reviewed by arbitration / litigation

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11
Q

How is adjudication dealt with under a JCT contract?

A

JCT refers to the Scheme for Construction Contracts for adjudication.

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12
Q

What are the benefits of using alternative dispute resolution instead of going through legal proceedings?

A
  • Saves time and cost for both parties
  • Maintains business relationships
  • Confidentiality can be maintained
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13
Q

What is litigation?

A
  • A dispute is resolved in formal court proceedings
  • The quite have the right to call witnesses, summon evidence and third parties into proceedings
  • Decisions made by judge
  • Judge awards responsibility of costs
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14
Q

What ADR techniques are available under a JCT contract?

A

-Mediation
- adjudication
- Arbitration

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15
Q

What ADR techniques are available under a NEC contract?

A
  • Adjudication then review by tribunal if dissatisfied
  • Tribunal may be a court or an arbitration
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16
Q

What is adjudication?

A

An adjudicator is appointed as per the contract terms – nominating body or appointed adjudicator – to review both parties cases and make a decision
No legal submissions or examinations of evidence
Less expensive than adjudication / litigation
- Powers limited to the confines of the contract
- Outcomes must be enforced by court proceedings if appealed

17
Q

What clause is it in the contract?

A

JCT - 9.2
NEC - Option W2
If not in the contract then Scheme for Construction Contract applies

18
Q

Who is liable to pay adjudicator’s fees?

A

It is up to the parties
- The adjudicator does not have the power to award costs unless both parties grant him this power

19
Q

What are ANB’s?

A

Adjudicator Nominating Bodies
Appointed bodies that can be called upon for the appointment of an adjudicator where no-one is named within the contract

20
Q

What is mediation?

A

Mediation is a voluntary procedure involving the appointment of a third party mediator to help facilitate negotiations between the party
- Aim is to help parties reach an amicable agreement between themselves
- Process is not binding until it is a signed agreement

21
Q

What is arbitration?

A
  • The use of an arbitrator to settle disputes
  • A private judicial determination of a dispute by an independent third party
  • decision is binding
  • Arbitration Act provides immunity for the arbitrator and requires the tribunal to be acted upon fairly and impartially
22
Q

What is the process of arbitration?

A

The appointed arbitration body is notified
- They appoint an arbitrator
- A hearing will be held where by both parties present their case
- Arbitrator bases their decision on what is fair and just
- Not bound by precedents
- Appeal can only be done in the case of corruption, bias or if the arbitrator has exceeded their power

23
Q

What must be included within adjudication notice?

A

Must be given by writing and needs to note the nature of the dispute, contract and parties of the contract
Must be flexible i.e. not tied to a specific amount of compensation
Has to be a single dispute under a single contract unless otherwise agreed.

24
Q

What are Dispute Resolution Boards?

A
  • Sits between avoidance and dispute resolution
  • Dispute Review Boards - 3 members, appointed at the start of the project and visit regularly on site. Where issues arise, asked for non-binding decisions
  • Dispute Adjudication Boards - Similar pattern but make formal binding decisions
25
Q

What is the difference between arbitration and litigation?

A
  • Arbitration - remains private, arbitrator
  • Litigation - through courts, better for multi-party disputes, judge
26
Q

What is negotiation?

A
  • A way of conferring to reach a compromise or an agreement

2 approaches:
- Competitive - make an offer that is very low, usually much less than they would in fact accept. Slowly raise what they accept
- Principled -separate people from the problem, assess interest, remain objective and assess what position would be if failed to reach negotiated settlement

27
Q

What are dispute de-escalation clauses?

A
  • In contracts to help crystallise the dispute and set timescales for notices
  • Courts don’t enforce an agreement to mediate / negotiate
  • Courts will enforce contractual timetable for holding negotiations / ADR
28
Q

Which processes lead to final decisions?

A
  • Litigation
  • Arbitration
  • Expert determination
  • Mediation - signed agreements for that dispute only
29
Q

What is conciliation?

A

Conciliation is a voluntary procedure involving the appointment of a third party conciliator who will:
o facilitate negotiations
o create a (non-binding) settlement proposal
- Parties cannot object to the appointed conciliator
- Similar to mediation - difference is that should negotiations breakdown, the conciliator will prepare a recommendation for how the dispute should be resolved. If neither party objects within 1 month, it becomes a binding decision

30
Q

In your experience, what are some common causes of disputes?

A
  • Errors and conflicting information in tender documentation
  • Poorly defined change control procedures
  • Contract errors
  • Delays to payments
  • Lack of knowledge / understanding of contractual obligations
31
Q

What are the stipulation of arbitration?

A
  • Must be written in to the contract
  • Parties must agree to
  • Arbitration Act 1996 applies
32
Q

What are the Adjudicator rights?

A
  • Right to revise decisions
  • Right to obtain information
  • Right to issue directions
  • Right to immunity
  • Must be fair & cost effective
33
Q

What is included in a Notice of Dispute?

A
  • Writing
  • Nature
  • Contract reference to
  • Flexible - must not stipulate a specific commercial amount for example
  • Single cause relating to a single contract
  • Dispute must have crystallised e.g. can only raise a notice of dispute once a pay notice / pay less notice has been issued
34
Q

What is expert determination?

A

In expert determination an independent third party who is an expert in the subject matter is appointed by both parties to decide the dispute
- the expert’s decision is binding
- expert determinators are less bound by case law
- Inquisitional with the parties assistance
- Usually quicker / less expensive than court proceedings
- Best suited to specific technical issues

35
Q

What would be the most appropriate route for a client to use?

A
  • Negotiation will be the cheapest option
  • Arbitration will be a binding decision made privately, choose own judge, arbitrator decides on costs and default position is loser pays both parties costs. Can be appealed in court in extreme circumstances
  • Litigation will give a final binding decision

Contract Practice (13 decks)

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