Conflict Avoidance and Dispute Resolution

Question 1

What is a dispute?

Answer 1

A dispute is a disagreement between parties over an issue (which can lead to a conflict)

Question 2

What is the cause of most disputes?

Answer 2

Time Constraints – delays, extension of time, L&E
Cost – Commercial, overspend, provisional sums
Contractual – disputes over clauses, roles and responsibilities
Quality – Insufficient design information, unclear or conflicting drawings
Changes

Question 3

How can conflict be avoided?

Answer 3

Good management
Clear communication
Clear contract documentation
Collaboration
Regular Reporting
Following Procedures and processes
Following RICS Standards
Risk Management
Record keeping

Question 4

If conflict occurs, how do you deal with it initially?

Answer 4

Raise the issue with all parties, and try to resolve through communication and negotiation
A face-to-face meeting is the best way to find a resolution

Question 5

Explain a time you have managed a conflict well?

Answer 5

On Harwell Quad Three, I had agreed for the obstructions tracker and process to be agreed in the contract.

The Project QS, was not aware that this was included in the contract and therefore had been claiming for obstruction removal costs not in accordance with the contract (i.e. recorded photo’s, drawings and volumes excavated)

Upon discussion, I outlined this process again to them and they understood why I had initially declined the basis of their original substantiation.

Following this, they issued all the relevant information, and I was able to agree the basis of the obstruction being added to the formal tracker.

Question 6

How does risk management reduce conflict / dispute?

Answer 6

Risk management helps reduce conflict by actively managing risk before they become an issue. It puts in place mitigation measures to reduce the likelihood and impact of a risk happening.

Question 7

How do early warning systems help reduce conflict?

Answer 7

Early warning systems used on NEC contracts. It provides a mechanism for identifying project risks that have the potential of impacting the project (mainly regarding time and cost)

Question 8

How do partnering techniques help reduce conflict?

Answer 8

Working collaboratively. Pain / gain. Working together to reach the best outcome

Question 9

What is conflict avoidance?

Answer 9

Conflict avoidance is the process of taking steps or implementing measures to prevent a dispute or conflict arising.

Question 10

Can the RICS help regarding dispute resolution?

Answer 10

The RICS conflict avoidance process (CAP) is a contractual mechanism, which helps parties to avoid getting into pro-longed and damaging disputes. It is used to resolve conflicts early and protect reputation.

CAP enables someone (a professional CAP advisor) who is a third party neutral (could be appointed by RICS) to come in and give the parties their knowledge, advice and recommendation.

Non-binding – but parties can use the recommendation as a basis to arrive at a settlement.

Question 11

What is the CAP process?

Answer 11

The parties to the contract identify an issue which has the potential to grow into a dispute and agree to seek out the intervention of CAP to help resolve it

Question 12

What is the RICS CAP Procedure?

Answer 12

The parties to the contract identify an issue which has the potential to grow into a dispute and agree to seek out the intervention of CAP to help resolve it

One or both parties request the appointment of a suitably experienced or qualified CAP member by the RICS ((and will complete a Dispute Resolution Service (DRS) application form))

Within 5 days of appointment, the CAP member will contact the parties to set out how they will proceed / what information they require

CAP member will aim to complete the full process within 28 days of appointment

Question 13

How much does the CAP process cost?

Answer 13

Average cost of £12k per dispute / query

Compared to between £50k-£500k for adjudication

Question 14

Can you initiate the CAP process even if its not in the contract?

Answer 14

Yes if both parties agree then it can still be considered (even if the clause was not included in the contract)

Question 15

How can a client brief affect conflict avoidance?

Answer 15

The clearer and more robust the client brief, the reduced likelihood of error or misinterpretation

If the employer sets out clear employer requirements, then the contractor has clear objectives to work towards and there is no ambiguity

Question 16

What could initiate the success of a final account negotiation?

Answer 16

Costs agreed and within the client budget
Negotiation resolved in a timely manner
All parties come away happy with the outcome and relationships are maintained

Question 17

What do you do if negotiation breaks down and the matter cannot be resolved?

Answer 17

Consider an ADR (alternative dispute resolution) to resolve the dispute

Question 18

How have you delivered bad news to a client?

Answer 18

What has gone wrong?
Why?
Impact?
What am I doing about it (best vs worst vs likely outcome)

Question 19

What is the RICS Conflict Avoidance Pledge?

Answer 19

The RICS conflict avoidance pledge is a promise or commitment that a number of organisations have signed up to.

By signing the pledge, the organisations are showing that they are committed to avoiding conflicts and to facilitate the early resolution of potential disputes.

Question 20

What happens when a company signs the pledge?

Answer 20

The company will be listed on the Conflict Avoidance Directory (Bronze, Silver & Gold)

Question 21

What are the benefits of the RICS Conflict Avoidance Pledge?

Answer 21

Becoming a pledge signatory signals to clients and suppliers that
- You are a good business to work with
- Focused on maintain good business relationships, dealing with problems early and amicably

Question 22

What is a dispute resolution?

Answer 22

Dispute resolution is a term that refers to several processes that can be used to resolve a conflict, dispute or claim.

Question 23

What are the three pillars of dispute resolution?

Answer 23

Negotiation
Mediation
Adjudication

Question 24

What are the two types of dispute resolution?

Answer 24

Alternative Dispute Resolution
Orthodox dispute resolution

Question 25

What is an alternative dispute resolution?

Answer 25

Alternative dispute resolution is a process whereby the parties to the dispute attempt to resolve matters without using the courts Encourages parties to talk to each other and preserve working relationships ADR is non-binding (unless agreed to be)

Question 26

What are the main forms of ADR?

Answer 26

Negotiation Mediation Conciliation Arbitration Adjudication Expert Determination

Question 27

Benefits and risks of ADR?

Answer 27

Benefits - Encourages the parties to talk to each other - Preserves working relationships - Helps the parties focus on the real matter of the dispute - Avoids legal costs Risks - Non-binding outcomes can be challenged through an orthodox process - Still can cost money (adjudication)

Question 28

What is orthodox dispute resolution?

Answer 28

Orthodox resolution is a process whereby the settlement agreement is made by a third party, and it is final and binding.

Question 29

What is negotiation?

Answer 29

Negotiations are informal discussions between parties on the core issues of the dispute with a view to resolving them on agreed terms. Relies upon the parties finding common ground, make compromises

Question 30

What are the advantages and disadvantages of negotiation?

Answer 30

Advantages: Very Flexible Reputations and relationships can be maintained Relatively quick and cost effective Disadvantages: Non-binding Requires high level of trust Negotiations may not lead to a result

Question 31

What are the two main approaches to negotiation?

Answer 31

Competitive - One party aims to get the best deal possible Collaborative - Seeks a win-win situation

Question 32

What is mediation?

Answer 32

Mediation is a process whereby the parties agree on and appoint an independent, neutral third-party to facilitate discussions between them

Question 33

What are the advantages and disadvantages of mediation?

Answer 33

Advantages Mediation is less expensive than other techniques Flexible and creative Private and confidential Disadvantages Any agreements are non-binding Informal Some disputes may be outside the scope of the mediation process

Question 34

When would you use mediation?

Answer 34

During construction to resolve a dispute. If negotiation has not worked then mediation is a reasonable option.

Question 35

What guidance is there on mediation?

Answer 35

The JCT publish guidance on mediation RICS Dispute Resolution Guidance Note

Question 36

What is conciliation?

Answer 36

Conciliation is a similar process to mediation, a natural and independent conciliator is appointed to facilitate a settlement between the parties Conciliators plays a relatively active and direct role in the actual resolution of a dispute. They will advise the parties on certain solutions by making proposals for settlement. The final recommendation is final and binding. (if the parties agree for it to be)

Question 37

What are the advantages and disadvantages of conciliation?

Answer 37

Advantages Conciliator is normally a legal expert in the disputed field in question Private and confidential Less expensive than other "binding" techniques Disadvantages Not legally binding Voluntary Can be too informal for some disputes

Question 38

What is the difference between Mediation & Conciliation?

Answer 38

Mediation - Mediator acts as a facilitator to help the parties come to an agreement. Conciliation - Conciliator acts as a facilitator but plays a more direct role in the solution of the dispute. Develops and proposes the terms of the settlement.

Question 39

What is adjudication?

Answer 39

Adjudication is a dispute resolution process whereby an adjudicator is appointed to review evidence submitted by disputing parties to come to a decision and determine the outcome of the dispute. The Housing Grants Construction and Regeneration Act 1996 made it mandatory for adjudication to apply to every construction contract

Question 40

What changes to adjudication did the LDEDCA 2009 make?

Answer 40

Adjudication clauses must be in writing, otherwise the Scheme for Construction contracts applies (Part 1 = adjudication, part 2 = payment) It is no longer allowable to define within a contract who should bear the cost of adjudication. Parties should share the cost of the adjudicator’s fees, and the expenses associated with the process in equal proportions. Slip rule – Adjudicators have the right to correct errors in their decisions within 5 days of delivering that decision

Question 41

Who pays adjudication fees?

Answer 41

The construction act generally calls for the parties to share the costs of the adjudicator’s fees. However, the adjudicator can determine that a party is liable to contribute to their fees and expenses in unequal proportion if in the adjudicators view, the claimants claim, or the respondent’s response was without substantial merit or acted in an improper management.

Question 42

What are the advantages and disadvantages of adjudication?

Answer 42

Advantages Decisions are made in private and are confidential A decision will be made in 28 days unless agreed otherwise Disadvantages Sometimes the 28 day period is not enough for a complex dispute Decisions can still be turned over by litigation or arbitration The short time frame can lead to incorrect decisions More costly than other forms of dispute resolution.

Question 43

What are the timescales for adjudication?

Answer 43

Notice of adjudication - Referring party sets out key information such as the details of the party, the contract and the nature of the dispute. Adjudicator appointed - within 7 days of the notice Referral notice - within 7 days of the notice (sets out the referring party's case with supporting evidence and documents Response - within 7 days (can be extended to 14 days) Decision - 28 days from the Referral notice. Binding unless it is challenged by litigation or arbitration.

Question 44

What is arbitration?

Answer 44

Arbitration is a process whereby formal disputes are determined by a private tribunal. It's an alternative to litigation. Must be shown to apply in the contract.

Question 45

What are the different arbitration procedures that can be done?

Answer 45

Documents (30 days) Short hearings (30 days) Full procedure (longer)

Question 46

What 3 things must be in place for arbitration to occur?

Answer 46

There must be a dispute Must be an agreement in the contract for arbitration to apply There must be a submission of the dispute to arbitration.

Question 47

What is the arbitration act 1996?

Answer 47

The arbitration act is a legal framework for arbitration, including recognition of the process, the arbitrator, the procedures, and also the award and enforcement of that award. Aims to ensure that Arbitration is: - Quick, fair and cost effective - Language used is user friendly and readily accessible

Question 48

What is the process of Arbitration?

Answer 48

Preliminary Proceedings Pleadings Gathering evidence and interviewing witnesses Expert reports Hearing Award - Final and Binding

Question 49

What are the advantages and disadvantages of arbitration?

Answer 49

Advantages Arbitration hearings, awards and disputes are private and confidential Speed (compared with litigation) Final and binding decision. Disadvantages Parties pay the costs of the arbitrator Limited appeal rights If money being disputed is small then it might be uneconomical.

Question 50

What is the Technology and Construction Court (TCC)?

Answer 50

The technology and construction court handles disputes about buildings, engineering, and surveying. The TCC does not normally handle cases with a value of less than £250k unless there is a good reason