Compare and Contrast Flashcards

Question

Overview of Arbitration

Answer 1

- Adjudicative form of dispute resolution - Parties agree to refer a dispute to a third party (arbitrator) and be bound by their decision - Can be included in a contract as an arbitration clause or decided upon after a dispute arises - Excludes jurisdiction of the court if an arbitration clause is present, unless parties waive their right to arbitration - Private and more flexible alternative to litigation - Parties select an impartial arbitrator with specific expertise in the subject matter - Can be tailored to suit the needs of the parties - Confidentiality can be maintained, beneficial for sensitive disputes

Answer 2

- Introduced in 1998 to address construction disputes efficiently - Applies only to contracts for 'construction operations' - Has become very popular and significantly impacted the construction industry - Provides a temporarily binding decision, quickly resolving disputes - Relatively few adjudicator decisions are litigated, arbitrated, or challenged - Courts tend to uphold adjudicator decisions and support the policy decisions behind the 1996 Act - Adjudicators are usually experts in construction law and practice - Decisions are typically reached within 28 days, ensuring a speedy resolution - Parties can still pursue litigation or arbitration if they are dissatisfied with the adjudicator's decision

Answer 3

- Speed: Fast, 28 days with possible extensions - Quality: Variable, depends on adjudicator and case complexity - Practical expertise: Likely, adjudicators chosen based on experience or legal expertise - Cost: Moderate, solicitors optional but intensity of activity increases costs - Recoverability of expense: Generally not recoverable, unless agreed upon in contract or adjudication agreement - Finality: Binding, limited grounds for challenge or reversal in subsequent litigation/arbitration - Privacy: Yes, private but not confidential; becomes public if challenged in court - Preserving commercial relationships: Unlikely, but may continue for contract duration - Creative solutions: No, decision according to the law, may seem more practical - Enforceability: Through court proceedings or registration

Answer 4

- Contractual adjudication is a dispute resolution process voluntarily agreed upon by parties in a contract, separate from statutory adjudication under the HGCR Act 1996 - Key cases: Deko, Ritchie v Philp, Domsalla v Dyason [2007] EWHC 1174 (TCC) - Policy decisions behind statutory adjudication may not necessarily apply Arises in two situations: - Parties obligated under the 1996 Act to have an adjudication scheme in place (implementation of the Act) - 1996 Act does not apply (e.g., employer is a residential occupier), but parties use a contract form that includes a right to adjudicate (true contractual adjudication)

Answer 5

- Speed: Quick, usually 28 days, but can be specified in a truly contractual adjudication - Quality: Depends on the adjudicator's ability, similar to statutory adjudication - Practical expertise: Adjudicator selected based on relevant experience or legal expertise, as in statutory adjudication - Cost: Comparable to statutory adjudication - Recoverability of expense: Determined by contract, as in statutory adjudication - Finality: Decision is binding, can be overturned by subsequent litigation/arbitration; courts may be more receptive to retention/compensation arguments, but Scottish position unclear (see Domsalla v Dyason) - Privacy: Private unless action is taken to enforce or challenge the award, not confidential - Preserving commercial relationships: Unlikely - Creative solutions: No, win or lose game, similar to statutory adjudication

Answer 6

- Adjudicative form of dispute resolution - Commonly used for rent reviews and other factual or opinion-based matters (e.g., quality, square footage, value) - Expert utilizes their own expertise to determine the issue - Not ideal for resolving legal issues; ensure the decision maker is acting as an expert, not an arbitrator to avoid unexpected consequences

Answer 7

- Speed: Can be very quick, with decisions reached within weeks or even days - Quality: Depends on various factors; as the decision is the expert's opinion, they can't necessarily be wrong - Practical expertise: Expert selected based on relevant practical expertise - Cost: Generally low, minimal procedure involved, lawyers not required but may draft the reference; experts charge hourly rate or fixed fee - Recoverability of expense: Depends on what parties agree, usually no provision on expenses, debatable whether expert has implied powers - Finality: Difficult to challenge, no requirement for expert to give reasons unless contractually required, limited basis for challenge; judicial review possible on certain grounds - Privacy: Completely private unless court proceedings are necessary to enforce or challenge the decision - Preserving commercial relationships: Possible, depends on circumstances; often used when parties need binding decision on value, quality, etc., or in ongoing contracts like leases or development agreements - Creative solutions: Limited scope, expert's role is to answer the referred question, not to propose settlement ideas

Answer 8

- In expert determination, parties generally agree on the law but need a decision on factual matters like value or quality, with possible incidental legal questions - In a binding reference, parties agree on the facts but require a determination on the applicable law - This is achieved through a joint memorandum to a senior lawyer, often an advocate, university lecturer, or authority in the relevant area of law affecting the dispute

Answer 9

- Speed: Fast, process duration depends on referee's time to issue the decision - Quality: Should be high if an appropriate referee is instructed - Practical expertise: Decision maker's expertise is legal, not practical, but should have significant experience in the relevant area of law - Cost: Potentially low, no need for lawyers to draft joint memorandum; referee's fee significant but proportionate and may be fixed in advance - Recoverability of expense: Matter of contract, unusual for referee to award legal expenses, more common for referee to award their own costs against unsuccessful party - Finality: Decisions should be final, challengeable only on very limited grounds (e.g., bribery) - Privacy: Yes, unless enforcement or challenge in courts is necessary - Preserving commercial relationships: Possible, better chance of survival if parties choose this route over court - Creative solutions: No, straightforward exercise in asking a question and receiving an answer

Answer 10

Terminology: - Dispute Resolution Boards (DRB): Umbrella term, often refers to binding decision - Dispute Adjudication Board (DAB): Binding DRB (e.g., FIDIC 1999) - Dispute Advisory Boards: Non-binding - Dispute Avoidance and Adjudication Boards (DAABs): FIDIC 2017 Contracts, dual role Dispute Resolution/Adjudication Boards: - DRB/DAB of three or more independent 'neutrals' engaged at project start - Contract specifies that disputes will be determined by the DRB - DRB decision is binding, cannot be challenged until project completion - In most cases, parties accept the decision and do not challenge it after completion Dispute Avoidance and Adjudication Boards: - Appointed at the outset - Parties may request recommendations from the DAAB - Disputes resolved by adjudication in an 84-day process - Referral to arbitration possible if a Notice of Dissatisfaction (NOD) is served within 28 days; if no arbitration commenced within 182 days after the NOD, DAAB decision becomes final

Answer 11

- Speed: Depends on contract; aims for quick decisions to allow contract works to progress uninterrupted - Quality: 'Quick fix' decisions; mix of legally qualified and practically experienced appointees can lead to well-balanced decisions - Practical expertise: DRB members often have practical backgrounds; full coverage of all disciplines impractical - Cost: Comparatively high upfront costs; savings possible in case of multiple disputes or if DRB decisions accepted without further litigation/arbitration; best suited for large projects - Recoverability of expense: Determined by contract setting up DRB - Finality: Decision binding until contract end; difficult to challenge pre-completion unless corruption involved; parties may accept decisions or litigate after completion - Privacy: Private process - Preserving Commercial Relationships: Yes, main goal of the process - Creative solutions: No, DRB imposes quick fix solutions to allow contract continuation

Answer 12

- Consensual dispute process: No binding effect unless parties reach agreement - Timing: Best chance of success when attempted early, before positions become entrenched or legal expenses distort the situation - Representatives: Success more likely with representatives who have decision-making power and can bind parties to a deal - Realistic views: Parties should have good advice beforehand, understanding the strengths and weaknesses of their position and bargaining strength - Successful outcomes: Poorly advised parties may refuse to settle when they should or settle for less than they could have achieved

Answer 13

- Speed: Can be very quick or take weeks/months, depends on the will of the parties - Quality: No imposed decision; parties ensure the deal takes all relevant factors into account - Practical expertise: No decision maker other than the parties themselves - Cost: Low; lawyers optional, no charge from third party judge/arbitrator - Recoverability of expense: Anything can be agreed as part of a settlement deal - Finality: Negotiated settlements are final and binding; challenged only in cases of fraud/deception - Privacy: Negotiations are private; confidentiality clause can be built into the deal - Preserving commercial relationships: Depends on circumstances; negotiation offers the best prospect, especially with win-win deals - Creative solutions: Possible to agree on anything, including factors beyond the immediate dispute, such as future collaborations

Answer 14

- Similar factors apply as in negotiation - Mediator assists parties in achieving a binding settlement agreement - Mediation has strong support in English courts due to "Woolf reforms" - Gaining support in Scotland - Mediator helps parties identify common ground, clarify issues, and explore creative solutions - Mediation can be faster, more cost-effective, and less adversarial than other dispute resolution methods - Parties maintain control over the outcome and can preserve relationships - Confidentiality is maintained throughout the process, unless required by law or agreed otherwise

Answer 15

- Speed of the process: Generally very quick, with the mediation taking a day or two after initial preparation, which can take several weeks - Quality of the decision: No imposed decision; parties must ensure the negotiated deal takes relevant factors into account with mediator's guidance - Practical expertise of the decision maker: Mediator should be an expert in mediation, though experience in the field of dispute is helpful - Cost: Comparatively low due to short duration; lawyers are optional but can be helpful for recording the deal - Recoverability of expense: Any terms can be agreed as part of the settlement; unusual to agree on payment of legal expenses if no action has been raised - Finality of the decision: Settlements are final and binding; can be challenged if procured by fraud or deception - Privacy of the process: Private and confidential; confidentiality clause can be included in the deal - Preserving Commercial Relationships: Mediation can help preserve relationships depending on circumstances - Creative solutions: Mediation allows for creative solutions, including agreements on future projects or other factors outside the immediate dispute

Answer 16

Conciliation: - Similar to mediation, without direct meetings between opposing parties - Involves 'shuttle diplomacy' On-site Neutral: - Neutral appointed at the start of the contract, attending site meetings - Neutral mediates disputes using their knowledge of the project - Significant expense, justified only on larger projects Mini Trial: - Parties present arguments to a neutral observer as if in court - Parties attempt a negotiated settlement after presentations - Neutral observer gives non-binding opinion on likely court outcome - Further negotiation and possible mediation follow Med-Arb: - Mediation followed by arbitration if needed - Mediator becomes arbitrator if no agreement is reached - Guarantees an outcome, but may lose tactical advantage from mediating first Arb-Med: - Arbitration before mediation, with the decision placed in a sealed envelope - If mediation is successful, the decision is discarded - If mediation fails, the envelope is opened, and the award becomes binding

Answer 17

Preserve commercial relationship: - Consider negotiation or mediation to maintain a positive relationship with the main contractor Cost and resource management: - Explore low-cost options like negotiation, mediation, or conciliation to minimize financial impact Speed and efficiency: - Prioritise methods with faster resolution, such as negotiation or mediation Expertise in the decision-making process: - If a decision on the contractual interpretation is needed, consider a binding reference with a joint memorandum to a senior lawyer Finality of the decision: - Choose a method that provides a final, binding decision to avoid future disputes Privacy: - Opt for private dispute resolution methods like negotiation or mediation to protect sensitive information In this scenario, the best course of action would likely involve initially attempting negotiation or mediation to maintain the commercial relationship while resolving the dispute efficiently and cost-effectively. If these methods fail, consider moving to a binding reference to obtain a final decision on the contractual interpretation.

Answer 18

Timing and project duration: - Consider the remaining six months of the project, which may impact the choice of dispute resolution method Cost and resource management: - Analyze the costs and resources associated with adjudication and arbitration Speed and efficiency: - Evaluate the time required for each method; adjudication is usually faster than arbitration Finality of the decision: - Adjudication provides a temporary binding decision, while arbitration generally results in a final and binding decision Expertise of the decision-maker: - Adjudicators and arbitrators are usually experienced in the construction industry and legal matters, but arbitrators may have more specialized expertise Enforcement and legal precedent: - Assess the enforceability of the decision and potential implications for legal precedents In this scenario, the contractor might initially consider adjudication due to its faster process, allowing for a temporary binding decision while the works continue. This decision can then be challenged in arbitration after the completion of the project, if necessary. However, if the contractor seeks a final and binding decision with potential legal implications, they may proceed directly to arbitration.

Answer 19

Contractual requirements: - Follow the contract's dispute resolution procedure, starting with mediation as a prerequisite to formal dispute resolution methods Communication and negotiation: - Attempt to resolve the issue through open communication and negotiation with the public authority and the architect before proceeding to mediation Expertise and evidence: - Gather evidence supporting the quality of the work and consider involving an independent expert to assess the work quality and provide an unbiased opinion Impact on reputation and public relations: - Evaluate the potential impact on the contractor's reputation and relationship with the local public authority, considering the importance of maintaining a positive image Time, cost, and resource management: - Analyze the costs, time, and resources associated with mediation and potential formal dispute resolution methods Legal implications and precedent: - Consider the potential legal implications and precedents that may arise from the dispute resolution process In this scenario, the contractor should first attempt to resolve the issue through open communication and negotiation with the public authority and the architect. If unsuccessful, the contractor must follow the contract's dispute resolution procedure and engage in mediation, as required. Throughout the process, it is essential to gather evidence supporting the quality of the work and consider involving an independent expert to assess the work quality. Additionally, the contractor should be mindful of the potential impact on their reputation and relationship with the local public authority.

Answer 20

Communication and negotiation: - Attempt to resolve the issue amicably through open communication and negotiation with the main contractor, explaining the financial impact on your company Legal advice: - Consult a legal professional to understand your rights and options under the contract and relevant laws Speed and efficiency: - Consider dispute resolution methods that are fast and efficient, such as negotiation, mediation, or statutory adjudication, to resolve the dispute and recover the withheld funds as quickly as possible Cost and resource management: - Analyze the costs, time, and resources associated with different dispute resolution methods, keeping in mind the company's financial constraints Impact on business relationships: - Evaluate the potential impact on the business relationship with the main contractor and other stakeholders, considering the importance of maintaining good working relationships Enforcement and recoverability: - Assess the likelihood of successfully recovering the withheld funds through various dispute resolution methods and the enforceability of any decision or settlement reached In this scenario, the subcontractor should first attempt to resolve the issue amicably through open communication and negotiation with the main contractor. If unsuccessful, the subcontractor should consult a legal professional to understand their rights and options. Given the financial constraints, it would be wise to consider fast and efficient dispute resolution methods, such as negotiation, mediation, or statutory adjudication. Throughout the process, the subcontractor should be mindful of the potential impact on their business relationships and carefully analyze the costs, time, and resources associated with different dispute resolution methods. Finally, the subcontractor should assess the likelihood of successfully recovering the withheld funds and the enforceability of any decision or settlement reached.

Answer 21

Communication and negotiation: - Initiate open communication and negotiation with the main contractor to resolve the dispute amicably, aiming for a mutually beneficial outcome Expert opinions and advice: - Seek the opinion of a relevant expert (e.g., architect or surveyor) to evaluate the usable space and provide guidance on the matter - Consult a legal professional to understand your rights and options under the contract and relevant laws Speed and efficiency: - Consider dispute resolution methods that are fast and efficient, such as negotiation, mediation, or expert determination, to resolve the dispute and minimize any delays in the project Cost and resource management: - Analyze the costs, time, and resources associated with different dispute resolution methods, taking into account the potential impact on the project's budget and timeline Impact on business relationships: - Evaluate the potential impact on the business relationship with the main contractor and other stakeholders, considering the importance of maintaining good working relationships throughout the project Finality and enforceability: - Assess the likelihood of reaching a final and enforceable outcome through various dispute resolution methods, and the ease of implementing any decision or settlement reached In this scenario, the first step should be to initiate open communication and negotiation with the main contractor to resolve the dispute amicably. Seeking expert opinions from an architect or surveyor, as well as legal advice, can help guide the process. Speed and efficiency are essential in minimizing project delays, so consider dispute resolution methods like negotiation, mediation, or expert determination. It's crucial to analyze the costs, time, and resources associated with different methods and evaluate the potential impact on business relationships. Finally, assess the likelihood of reaching a final and enforceable outcome and the ease of implementing any decision or settlement reached.