Conflict and avoidance

Question 1

What is Adjudication?

Answer 1

• Quick form of dispute resolution (without going to courts)
• Independent Third-party
• Legally binding unless revised by arbitration or litigation
• In NEC within 28 days the adjudicator needs to make a decision
• W1 and W2 (within contract data part 1)
• Unsuccefull party pays the Adjudicator.
• Neither party can claim any fees incurred by lawyers, experts or anyone else who helps prepare his case.

Question 2

Why does accurate record-keeping avoid conflict?

Answer 2

• keeping accurate records of plant, labour and materials used in the project
• obtaining progress reports from the engineers. Accurate engineering reports

Question 3

What is Arbitration?

Answer 3

• Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
• There must be a written agreement to arbitrate
• It is set out by Arbitration Act 1996
• Section 29 of the Arbitration Act provides immunity for the arbitrator. The arbitrator is not liable for anything done or omitted in the discharge of their function as an arbitrator unless the act or omission is in bad faith.
• It is final and binding
• both parties bear the cost of the arbitrator and the venue

Question 4

What is dispute resolution?

Answer 4

A term that refers to several processes that could be used to resolve conflict

Question 5

Advantages and Disadvantages of Litigation?

Answer 5

Advantages

• High quality decision making
• good timeframes that are enforceable
• the judge can provide interim relief

Disadvantages

• long
• expensive
• reputational damage as its public

Question 6

What is two approaches to negotiation?

Answer 6

Competitive (short term gains, aggressive)

Principled (interest-based approach pursuing a mutually shared outcome)

Question 7

Why does regular reporting avoid conflict?

Answer 7

• Regular progress meetings
• Regular commercial meetings that are followed up with meeting minutes with a actions being recorded
• Key issues will be discussed on regular basis and therefore the risk that they carry could be mitigated before they result into disputes.

Question 8

What is the difference between Arbitration and Adjudication?

Answer 8

Adjudication is of the first instance and then Arbitration is used for an appeal

Arbitration is a more court-like procedure that has a hearing panel

Adjudication is quick process, Adjudication can take months

Question 9

What is Litigation?

Answer 9

• Litigation is the process of taking a dispute to a court of law
• legally enforceable

Question 10

Why does project management avoid conflict?

Answer 10

• Means proactively managing all aspects of time, money and risk
  associated with the project.
• be proactive to address issues when they arise in order to mitigate the issues before they result in arguments and disputes

Question 11

Why is adjudication effective?

Answer 11

• Quick process
• Progress of works is not disrupted and therefore limits cashflow issues
• private and confidential (limits reputation damage)
• less costly than arbitration and litigation

Question 12

What if the contract doesn’t have an adjudicator?

Answer 12

Construction Act 1996 section 108 applies

Question 13

Why does client management avoid conflict?

Answer 13

• good understanding of the client objective and a client’s approach to risk
• building rapport through continues form of communication where the QS will warn the client on the different way of issues and how they can be dealt with

Question 14

What is Mediation/conciliation?

Answer 14

NON BINDING - 3rd Party helps to reach decision.

Advantages – Cheap, Encouraged by courts, Involvement of neutral party

Disadvantages – Only works if both parties agree

Question 15

What is in the Arbitration Act (1996)?

Answer 15

The Act mandates that the general duty of the arbitral tribunal is to:[6]

act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.
The various subsequent provisions relating to the conduct of arbitrations are largely pinned upon this overriding duty. The legislation specifies that “The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it.”[6]

Subject to that overriding duty, the tribunal has broad discretion in relation to matters of procedure and evidence. The legislation provides that “It shall be for the tribunal to decide all procedural and evidential matters, subject to the right of the parties to agree any matter.”[7]

Question 16

How do Construction Acts deal with ADR?

Answer 16

How do Construction Acts deal with ADR?

Part II of the HGCRA 1996 (aka “The Construction Act”) introduced the statutory requirement that an adjudication provision is incorporated into construction contracts
• The HGCRA 1996 enforces minimum requirements that every construction contract must comply with, although parties to a contract are free to devise/incorporate their own rules. If they do not, the provisions of the Scheme for Construction Contracts will apply.
• Summary of minimum requirements prescribed by the Act:
Contract must:
(a) Enable a party to give notice of intention to commence adjudication at any time;
(b) provide a timetable with the object of appointing the adjudicator and referring the dispute to him within 7 days of such notice;
(c) require the adjudicator to make his or her decision within 28 days after the dispute has been referred to him or her;
(d) allow the adjudicator to extend the 28 days by up to 14 days with the consent of the referring party;
(e) impose a duty on the adjudicator to act impartially;
(f) enable the adjudicator to take the initiative in ascertaining the facts and the law;
(g) provide that the adjudicator’s decision is binding until the dispute is finally determined by legal proceedings, arbitration or by agreement;
(h) provide that the adjudicator cannot be liable for anything done in his or her capacity as adjudicator unless the act was done in bad faith

Question 17

What is negotiation as ADR?

Answer 17

NON BINDING - Parties A + B themselves attempt to resolve the issue. Confer with each other to reach a decision

Advantages – Speed, Cheap, Confidential
Disadvantages – If parties too far apart can be difficult to progress

Question 18

What is Mediation?

Answer 18

• The parties agree on an independent, third-party neutral system to facilitate discussions between them, with the goal of reaching a settlement.
• The power to settle remains with the parties, but the process is led by the mediator.
• process is non-binding

Question 19

What is negotiation?

Answer 19

• When parties discuss between themselves to resolve any issues that have arisen in order to resolve it in a way that they both find acceptable
• A negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable

Question 20

What does the Construction Act 1996 do?

Answer 20

The Construction Act 1996 gives a party to a construction contract the right to refer a dispute to adjudication “at any time”.

Question 21

What is adjudication and the adjudication process?

Answer 21

Involves the appointment of an independent adjudicator who considers the evidence and makes a decision which is binding to all parties
The parties must meet their own costs of the adjudication, unless they have agreed that the adjudicator shall have the power to award costs.
Housing Grants Construction Regeneration Act 1996 introduced Adjudication for any contracts in writing -
• Must be a dispute i.e. dispute in payment in valuation
• Notice can be given at any time.
Process -
1. Submit notice of Adjudication
2. Within 7 days of receipt appointing body selects an adjudicator
3. 28 days later decision made by Adjudicator
4. The referring party can extend the 28 day period by 14 days, but any more must be agreed by both parties

There is an obligation on the adjudicator to act impartially and fairly.

Advantages – Simple & Efficient, Adjudicator named in contract, decision binding

Disadvantages – Process can’t be stopped once referred; decisions based on quality of the submissions

Question 22

Why does ‘well-defined contract documentation’ avoid conflict?

Answer 22

• Good documentation means capturing the specific details of the project and addressing the particular circumstances and risks of that project
• Minimizing ambiguities in the contract, having clear and specific outcomes

Question 23

What is ADR and what does it include?

Answer 23

Alternative Dispute resolution

Mediation

Negotiation

Adjudication