Conflict Avoidance, management and dispute resolution procedures

Question 1

What are the conflict avoidance processes?

Answer 1

Conflict avoidance and dispute resolution in construction RICS guidance provides a list of process that includes:
good project management (time, money and risk),
good client management (clients objectives)
clear contract documents
good payment practice.
Record keeping

https://www.rics.org/content/dam/ricsglobal/documents/standards/conflict_avoidance_and_dispute_resolution_in_construction_1st_edition_rics.pdf

https://www.rics.org/content/dam/ricsglobal/documents/standards/conflict_avoidance_and_dispute_resolution_in_construction_1st_edition_rics.pdf

Question 2

What is the RICS Conflict Avoidance Process (CAP)?

Answer 2

CAP is a government-endorsed procedure

resolve disagreements out of court at time of event

can be written into contracts, or it can be utilised on an ad hoc basis

Panel of 1 or 3 professionals (experts in the subject) appointed by RICS

https://www.rics.org/dispute-resolution-service/conflict-avoidance/conflict-avoidance-process

Question 3

What are the three pillars of dispute resolution?

Answer 3

Negotiation - the problem-solving efforts of the parties themselves

Mediation or conciliation - a third-party intervention does not lead to a binding decision being imposed on the parties. But the aim is for parties to reach a binding agreement.

Adjudicative process - the final outcome is determined by a third party who does impose a binding decision on the parties

Question 4

What is the RICS guidance note on conflict avoidance?

Answer 4

‘Conflict avoidance and dispute resolution in construction’ RICS guidance note.

Question 5

What are the dispute resolution methods?

Answer 5

negotiation, mediation, adjudication, arbitration and litigation

the differences between them including which provide a binding decision and which don’t.

Question 6

How do the JCT contract allow the parties to the contracts to deal with dispute resolution?

Answer 6

Negotiation was previously an optional supplemental provision in 2016 but is now standard in 2024.

Most JCT contracts (inc D&B24 and ICD16) allow for parties to use mediation

In JCT either party can refer dispute to adjudication

Parties can select either arbitration or litigation in the contract particulars (Article 9)

Question 7

What is ADR?

Answer 7

Alternative dispute resolution

Alternatives to traditional binding dispute resolution(litigation and arbitration)

Negotiation

Mediation

Adjudication

Question 8

What makes a contract robust?

Answer 8

Use an unamended recognised form of contract such as JCT.

Clear and comprehensive Employer’s Requirements and Contractor’s Proposals

Clear dates and procedures

Efficient contract administration by CA or EA.

Question 9

How does effective management and communication help to avoid conflicts?

Answer 9

Clarifies expectations

reduces misunderstandings

builds trust

identify issues early

Encourages collaboration

Keeps documents accurate

Question 10

What is negotiation?

Answer 10

Discussions that aim to reach a mutual agreement between two or more parties.

Question 11

What are the advantages of negotiation?

Answer 11

Cost efficient

Quick

Private

Question 12

What are the disadvantage of negotiation?

Answer 12

Potential for imbalance of power - More knowledge, finances or negotiation skills

Relies on cooperation from both parties

Not legally binding

Question 13

What is Mediation?

Answer 13

A voluntary, non-binding and private dispute resolution process where a mediator assists the disputing parties in reaching an agreement.

Typically 1 day
Mediator tries to get parties to agree dispute
Parties make outcome decision
Non-binding
Cheap, quick and private

Question 14

What are the advantages of Mediation?

Answer 14

Cost efficient

Quick - 1 day

Private

Question 15

What are the disadvantage of mediation?

Answer 15

Relies on cooperation from both parties

Not legally binding

No guarantee of an agreement

Question 16

What is adjudication?

Answer 16

A process where a neutral adjudicator makes a binding decision on a dispute, often used in construction and contractual matters.

28 day process
Adjudicator is expert in their field
Documents exchanged
Adjudicator controls process
Adjudicator makes decision
Decision is legally binding
Relatively quick
Private

Question 17

What is the timeline process for adjudication?

Answer 17

1) Referring party serves Notice of Adjudication
2) Appoint an adjudicator within 7 days of the Notice of Adjudication.
3) Referral notice served which includes referring party’s case with supporting evidence and documentation
4) Responding party must serve it’s Response (with evidence and documentation) within 7 days of Referral Notice
5) Adjudicator may permit the Referring Party to serve a Reply and in turn, the Responding Party to serve a Rejoinder
6) Adjudicator provides decision within 28 days of the Referral Notice

https://www.bpcollins.co.uk/wp-content/uploads/2022/04/Adjudication-timeline.pdf

Question 18

How is an adjudicator appointed?

Answer 18

Can be agreed and named in the contract

or a nominating body is agreed in the contract (options include Royal Institution of Chartered Surveyors)

Question 19

What are the advantages of adjudication?

Answer 19

Quick and cost-effective compared to litigation

Binding (but often temporarily)

Expert adjudicators with industry knowledge

Question 20

What are the disadvantage of adjudication?

Answer 20

May not provide a final resolution (decisions can be challenged)

Limited appeal rights

Less formal, so procedures may vary

Question 21

What is arbitration?

Answer 21

A private process where a neutral arbitrator (or panel) makes a binding decision after hearing both sides, similar to a court. Typically only for very large disputes.

Parties consent to arbitrate
Arbitrator appointed who is expert in their field
Typically longer and more costly - Multiple years
Legally binding - Arbitrator issues an award
Private

Question 22

How is an arbitrator appointed?

Answer 22

nominating body is agreed in the contract (options include Royal Institution of Chartered Surveyors)

No option for specific name in contract.

Question 23

What are the advantages of arbitration?

Answer 23

Binding and enforceable

Quicker and more flexible than court

Can choose an expert arbitrator

Private and confidential

Question 24

What are the disadvantage of arbitration?

Answer 24

Can be costly (especially with multiple arbitrators)

Limited appeal rights

May lack transparency

Question 25

What about short form arbitration?

Answer 25

A documents only version of arbitration. Can be included in the contract but generally in construction, adjudication is the first dispute resolution method.

Question 26

What is litigation?

Answer 26

A formal process where a dispute is resolved in court, and a judge (or jury) issues a legally binding decision. Take dispute to courts Legally binding costly time consuming in public domain

Question 27

What are the advantages of litigation?

Answer 27

Legally binding and enforceable Clear procedures and rules Public accountability Right to appeal

Question 28

What are the disadvantage of litigation?

Answer 28

Expensive and time-consuming Public (lack of privacy) Can damage relationships Rigid process

Question 29

What adjudication services do the RICS provide?

Answer 29

Construction Adjudication Service (tailored for construction disputes) Low Value Adjudication Service (less than £100k claim) Summary Adjudication Service (Less than £20k) Homeowner Adjudication Service ( between homeowners and contractors)

Question 30

What gives parties the right to refer disputes to adjudication?

Answer 30

Parties to a construction contract have the right to refer disputes to adjudication, as established by the Housing Grants, Construction and Regeneration Act 1996.

Question 31

What is the Housing Grants, Construction and Regeneration Act 1996

Answer 31

applies to all contracts for 'construction operations' (including construction contracts and consultants' appointments). The Act sets out contract requirements: The right to be paid in interim, periodic or stage payments. The right to be informed of the amount due, or any amounts to be withheld. The right to suspend performance for non-payment. The right to adjudication. Disallowing pay when paid clauses. If contracts do not comply then the Scheme for Construction Contracts Regulations (1998) sets out provisions of contract where it has deficiencies.

Question 32

What would you do if the contractor asked you to delete the adjudication clause from the contract?

Answer 32

In many cases if there is no contractual right to adjudicate, the parties will have a statutory right to adjudicate under the Housing Grants, Construction and Regeneration Act 1996. If the Scheme does not apply and parties wish to remove the contractual right to adjudicate then all clauses must be deleted in their entirety.

Question 33

How does arbitration work?

Answer 33

Agreed in the contract particulars One party gives notice to arbitrate Selection of arbitrator by nominating party in the contract. Optional preliminary hearing (timeline, clarify issues, agree procedures) Exchange of statements and evidence Hearing - Either oral with witnesses and argument or just on paper if agreed. Rules are flexible and set by arbitrator and parties. Binding award issued by arbitrator within agreed timeframe Limited grounds to appeal

Question 34

What does the arbitrator produce at the end of arbitration?

Answer 34

The arbitrator produces a written decision called an arbitration award. This award is legally binding and specifies the outcome of the dispute, including any remedies or compensation to be awarded. It also typically explains the reasons for the decision.

Question 35

How does mediation work?

Answer 35

- Mediator appointed - Issue documents to mediator ahead of meeting including a position statement from each side. Be succinct, send relevant documents, not all documents. - Agree and sign a mediation agreement (agreement to participate and follow rules such as confidentiality and without prejudice) - Parties aim to set out a settlement. - If no settlement is achieved, it doesn't mean progress hasn't been made. https://www.rics.org/news-insights/happens-mediation-hearing

Question 36

What is the outcome of mediation?

Answer 36

Mediation outcomes are decided by the parties involved and can be flexible. Could result in: Settlement. No Settlement. Ongoing settlement negotiations. Commitment to do things differently

Question 37

What would you do if you wanted to appoint an adjudicator?

Answer 37

The JCT contract either names an adjudicator or states the nominating body.

Question 38

What is the process for litigation?

Answer 38

7 step process Pre-action - 'Letter before claim' issued setting out dispute, a remedy, and propose an ADR. Recipient has period of time to respond, hopefully agreeing to proposed remedy and settlement can be agreed. Issuing a claim at court - File documents with court and serve to defendant Directions to trial - admin undertaken by the court in advance of trial Going to trial - Claim heard at court Judgement Appeals Assessment of Costs - Generally, the successful party is able to claim a proportion of their legal costs from the unsuccessful party https://healdnickinson.co.uk/litigation-process-explained/

Question 39

Does your company offer a third party redress?

Answer 39

If complainant is still unhappy with complaint outcome than it can be referred to mediation and then arbitration.

Question 40

How would you de escalate a conflict between stakeholders?

Answer 40

I would ask them both to state their position on the situation. I would then try to get them talking, potentially arranging a meeting in a neutral venue.

Question 41

Which of the dispute resolutions can you overturn?

Answer 41

Mediation is non-binding so there is nothing to be overturned Adjudication can be challenged or overturned in later arbitration or litigation proceedings. Arbitration can be overturned by a court but only in limited circumstances (e.g., procedural unfairness, lack of jurisdiction, or fraud). Litigation decisions in the Technology and Construction Court (TCC) can be appealed to higher courts (e.g., Court of Appeal).

Question 42

• How do adjudications costs get split?

Answer 42

Each party is responsible for their own fees to prepare for adjudication. The adjudicator determines who pays the adjudication fees or if there is a split and what that split is.