M06 - Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

What is an ADR (Alternative Dispute Resolution)

Answer 1

• A form of dispute resolution that does not involve judicial proceedings
• Action to resolve contractual disagreements between two or more parties

Question 2

What is Mediation?

Answer 2

• Voluntary procedure
• Parties not obliged to accept terms of agreement
• Mediator appointed
• Mediator negotiates with parties separately to find compromise and settlement
• If in agreement, a civil law contract is drawn up - both parties commit to it
• Refusal to take part looked at negatively by courts

Question 3

What is Adjudication?

Answer 3

• Both parties have to agree to it
• Adjudicator appointed by Adjudicating body - who is an expert witness
• Advantages are relatively low cost & short resolution time (4-6 weeks)
• Decision made by Adjudicator and is binding, unless revised by arbitration

Question 4

What is Arbitration?

Answer 4

• Both parties have to agree to it
• 1 or more Arbitrators appointed by the disputing parties
• It is a private procedure, the Arbitrators decision ‘the award’ is private
• Advantages are privacy and the ability to appoint Arbitrator with technical knowledge, as opposed to a judge
• Disadvantages are it can be expensive
• Governed by the Arbitration Act
• Decision is binding, unless revised by litigation, where Arbitrator has acted outside their powers

Question 5

What is Litigation?

Answer 5

• Formal legal proceedings
• Advantages = Highest powers available to enforce decisions, sanctions etc
• Disadvantages = cost, time, all information open to public, ability to appeal, Judge doesn’t have technical knowhow
• Common for parties to reach settlement before trial

Question 6

Differences between Adjudication and Arbitration?

Answer 6

• Adjudication = Adjudicator appointed by Nominating Body. Decision is interim as can be escalated to Arbitration
• Arbitration = Arbitrator appointed by disputing parties - Longer timescales

Question 7

Differences between Arbitration and Litigation?

Answer 7

• Parties appoint the Arbitrator (3rd party) to resolve dispute in private
• Litigation is formal legal proceedings conducted in public = more expensive & time consuming

Question 8

What are the timescales for an adjudication process?

Answer 8

• Once the dispute is referred, an Adjudicator is appointed within 7 days
• Decision is give within 28 days
• Can be extended by 14 days if agreed by both parties

Question 9

What are the contractual mechanisms available for dispute resolution under contracts you have been working with (NEC, JCT)?

Answer 9

Mediation, Adjudication, Arbitration

Question 10

How have you implemented conflict avoidance procedures in contracts you have been involved with?

Answer 10

I have yet to be involved in a formal dispute resolution process, but frequently I am required to settle and agree valuations and final accounts with Contractors which requires negotiation and I do this through effective preparation, communication and behaving ethically

Question 11

What in your opinion is the cause of most disputes?

Answer 11

Monetary, specification and programme disputes

Question 12

What act is adjudication based on?

Answer 12

Housing Grants, Construction and Regeneration Act

Question 13

Under JCT what are the ADR procedures that may be used?

Answer 13

1) Mediation
2) Adjudication
3) Arbitration

Question 14

What is the default ADR in JCT?

Answer 14

Mediation

Question 15

What is the default ADR in NEC3?

Answer 15

1st Step - Adjudication

2nd Step - Arbitration or Litigation

Question 16

What could indicate the success of a negotiation on a final account?

Answer 16

Both parties come away happy, and costs agreed within cost report budgets

Question 17

Why is adjudication (ADR) required in the contract?

Answer 17

• The Housing Grants, Construction & Regeneration Act 1996 (more commonly known as the Construction Act) stipulates that it should
• All construction contracts to allow for adjudication; Follow proper adjudication procedure
• Any party permitted to refer dispute to adjudication

Question 18

What if a contract does not have a provision for adjudication?

Answer 18

• The parties have a statutory right to adjudication assuming that the contract qualifies under the Construction Act
• If it doesn’t then the Scheme for Construction Contracts will apply

Question 19

Can you reject the decision from the adjudication process?

Answer 19

Yes and that party can proceed to whichever out of arbitration or litigation is detailed in the Contract particulars.

Question 20

Who appoints the adjudicator?

Answer 20

The adjudicator can either be named in the Contract particulars or nominated by the nominating body identified in the Contract particulars such as the RIBA and the RICS.

Question 21

What styles of conflict avoidance are you aware of?

Answer 21

• Confronting: collaborative, confront issue rather than each other
• Compromising: give and take
• Smoothing; more accommodating than compromising, sacrifices made
• Forcing; force view with no disregard to other view
• Avoiding; postponing, temporary

Question 22

What is the differences between expert determination & mediation?

Answer 22

• Expert determination is a form of alternative dispute resolution whereby the parties to a contract ask an independent expert to give a binding decision on a dispute. If the clause is drafted properly and it is used in the right circumstances expert determination can provide you with a quicker, cheaper and effective means of settling a dispute.

Question 23

Why would you choose litigation over arbitration?

Answer 23

• If the other party is not voluntarily participating in the ADR process.

Question 24

Is adjudication compulsory?

Answer 24

Yes

Question 25

Do you think adjudication is cost effective?

Answer 25

- It depends on the amount of the claim | - Absolutely, when compared against litigation.

Question 26

What law guarantees the right to adjudication?

Answer 26

- The Local Democracy, Economic Development and Construction Act 2009

Question 27

Which high court enforces construction & litigation?

Answer 27

- Technology and Construction Court (TCC)

Question 28

What does the JCT adopt as the go-to ADR method?

Answer 28

- Serious consideration to Mediation - Adjudication - Then Arbitration

Question 29

What section of JCT focuses on ADR?

Answer 29

- Section 9 | - Article 7

Question 30

How do you avoid conflict?

Answer 30

- Good management - Being proactive - Good record keeping - Partnering

Question 31

What is mediation?

Answer 31

- Mediation is a completely voluntary and confidential form of Alternative Dispute Resolution (ADR). It is when an impartial person or mediator - trained in dealing with difficult discussions between 2 opposing sides - acts like a referee in a dispute. - Mediator doesn't make a ruling, they facilitate communication

Question 32

What is the difference between mediation & conciliation?

Answer 32

- In mediation, the mediator acts as a facilitator who helps the parties in agreeing. Conversely, in conciliation, the conciliator is more like an interventionist who provides probable solutions to the parties concerned, to settle disputes.

Question 33

What is adjudication?

Answer 33

- Adjudication is a compulsory dispute resolution mechanism that applies to the UK's construction industry. - Consensual agreement - Legally binding unless undone by arbitration & litigation.

Question 34

Is adjudication binding?

Answer 34

- Yes, unless un-done by litigation of arbitration - Adjudication decisions are binding unless and until they are revised by arbitration or litigation. - Rarely overturned.

Question 35

What is arbitration?

Answer 35

- Arbitration is an alternative to litigation for resolving construction industry disputes. - Consensual agreement - Arbitration Act 1996

Question 36

Is arbitration legally binding?

Answer 36

- Arbitration is legally binding in the same way as a judgment would be.

Question 37

What are the timescales of adjudication/arbitration?

Answer 37

- Adjudication: 28 days | - Arbitration: Can take months

Question 38

Can you extend adjudication?

Answer 38

- Yes, by 14 days if requested by both parties or by the claimant.

Question 39

In JCT, if no adjudicator is named, who will act as adjudicator?

Answer 39

President or Vice President of: - Royal Institution of British Architects - Royal Institution of Chartered Surveyors - Association of Independent Construction Adjudicators - Chartered Institute of Arbitrators

Question 40

In JCT, if no arbitrator is named, who will act as arbitrator?

Answer 40

President or Vice President of: - Royal Institution of British Architects - Royal Institution of Chartered Surveyors - Chartered Institute of Arbitrators

Question 41

How does NEC deal with resolving disputes?

Answer 41

- Option W1: Used when adjudication is the method of dispute resolution and the United Kingdom Housing Grants, Construction and Regeneration Act 1996 does not apply - Option W2: Used when adjudication is the method of dispute resolution and the United Kingdom Housing Grants, Construction and Regeneration Act 1996 applies - Option W3: Used when a Dispute Avoidance Board is the method of dispute resolution and the United Kingdom Housing Grants, Construction and Regeneration Act 1996 does not apply

Question 42

What is a conflict of interest?

Answer 42

- A situation that has arisen that may affect your professional judgement.

Question 43

What types of Conflict of Interest are there?

Answer 43

- Party Interest: Acting for another person with competing interest at the same time - Own Interest: Have obligations or pressures that detract from or affect your relationship with the client - Confidential Information: Are faced with conflicting duties owed to different clients

Question 44

How do you declare a conflict of interest?

Answer 44

- Declare it to the client and ensure they are okay with it | - Get them to sign an “Informed Consent” – RICS provide a template