Level 1 - Conflict avoidance

Question 1

N1. Under JCT how long does an adjudicator have to make his award?

Answer 1

• 28 days from issue of the referral notice, but this can be extended to 42 if both parties agree.

Question 2

N2. How do you avoid conflict on a project?

Answer 2

• Firstly, ensure that the tender information is clear, concise when tendering the project. i.e. a clear scope of works.
• If there is a dispute, use a people approach first and try to negotiate an agreement before going legal.
• As a last resort you should go legal.

Question 3

N3. What is the difference between Mediation and Conciliation?

Answer 3

• Mediation is a voluntary procedure, which involves the appointment of a third party mediator, who will help to facilitate negotiations between parties. Them aim of mediation is to help the parties reach an amicable agreement.
• Conciliation is also a voluntary procedure, which involves the appointment of a third party Conciliator. The role of the conciliator is to also facilitate negations, however the Conciliator will create a settlement proposal.

Question 4

N4. What is ADR?

Answer 4

•	ADR stands for Alternative Dispute Resolution, and was introduced as part of the Civil Procedure Rules 1998.
•	These Alternative Dispute Resolution procedures are:
o	Negotiation.
o	Mediation.
o	Conciliation.
o	Adjudication.
o	Arbitration.
o	Litigation.

Question 5

N5. What are the Civil Procedure Rules 1998?

Answer 5

• An improvement to the legal system, making it quicker, cheaper and easier to understand through the introduction of Alternative Dispute Resolution (ADR).

Question 6

N6. What Dispute Resolution method is named in your contract?

Answer 6

• JCT = Adjudication.
• NEC = Adjudication.
• NFDC = Ajudication

Question 7

N7. . What do you understand by Statutory?

Answer 7

• Statutory Law (Statue Law) is set down by legislate.

Question 8

N8. Talk me through how you would go about negotiating something?

Answer 8

• Firstly I would prepare, as understanding you points fully is critical.
• Secondly I would pre-determine what I can afford to give away, know my bottom line.
• Focus on the bigger picture, don’t get stuck on one item.
• Try to negotiate a win/win situation.
• Never accept the first offer.
• Finally, I would negotiate the small deals before the big ones.

Question 9

N9. What is the Adjudication Process?

Answer 9

• Notification of Adjudication from one party to another.
• From receipt of notification, parties have up to 7 days to appoint the adjudicator.
• Adjudicator will review parties cases, and make their decision within 28 days. (This can be extended to 42 days)
• The adjudicator does not have the power to award costs, unless the parties agree to grant him this power.

Question 10

N10. What is Litigation?

Answer 10

• Litigation is the process of taking legal action, i.e. in the construction industry, it will typically be taken to the Construction and Technology Court.

Question 11

N11. What is Arbitration?

Answer 11

• The use of an Arbitrator to settle disputes.

* It is a private, judicial determination of a dispute by an independent third party.

Question 12

N12. What is the Arbitration Process?

Answer 12

• The appointed Arbitration body must be notified, and they will appoint an Arbitrator.
• The main hearing will be held, whereby each side will present their version of the conflict, along with their evidence.
• The arbitrator will hen base their decision on what they believe to be fair and just, as they are not required to follow the law or reasoning of earlier case decisions.
• It is very difficult to appeal an Arbitration, they can only be appealed if it can be proved that the arbitrator was:
o Corrupt.
o Bias.
o Arbitrator exceeded their power.

Question 13

N13. How do you prepare for a negotiation?

Answer 13

• I will always familiarise myself before the negotiation with what is being negotiated.
• This will allow me to better understand my own argument, help me to pre-empt their argument/responses and allow me to better portray my point.

Question 14

N14. What is a Dispute Board?

Answer 14

• A group that is assigned to a project from inception. They are more a preventative form of dispute resolution rather than reactive, as they will try to identify where disputes may arise, and takes steps to ensure they do not happen.
• Usually being used on Massive jobs.

Question 15

N. In your submission, you mention that you were negotiated a Final Account at Crest Nicholson. Can you please elaborate on how you prepared for this negotiation?

Answer 15

• I prepared for his negotiation by reviewing my financial position, i.e. comparing the cost of the works against the value I have claimed, therefore allowing me to better understand my bottom line.
• Following this, I reviewed the outstanding variations and items that were being disputed by the client, to better understand my position.
• From undertaking this preparation, I was able to produce a well rounded case for each outstanding item, and pre-empt the clients responses.

Question 16

N. Once in a Final Account negotiation, how do you proceed to agree the Final Account.

Answer 16

• I started by negotiating and agreeing the smaller items first, adopting the collaborative approach to negotiation, to try and satisfy both parties interests.
• Following this I moved onto the larger more disputed items, which I presented my backup information for, and further negotiated a win/win situation for both myself and the client.
• Subsequent to the meeting, I issue a formal email, detailing the extent of what had been confirmed, such as the prices for the variations, and the Final Account Figure.

Question 17

6.1 Why can disputes occur?

Answer 17

• Poor performance of parties.
• Uncontrolled change.
• Complex contractual relationships / inadequate tender and contract documentation.
• Inability or reluctance to pay.
• Inappropriate procurement.
• Pressure to start on site before design and or contract finalised e.g. Letters of Intent (LOI)

Question 18

6.2 How are disputes avoided?

Answer 18

• Robust tender and contract documentation.
• Controlled change.
• Informed procurement strategies.
• Sensible risk allocation.
• Appropriate financing.
• Pro-active project management.

Question 19

6.3 What techniques are available to resolve disputes?

Answer 19

The 3 Pillars of Dispute Resolution (Professor Green of Boston University)

1. Negotiation – problem solving efforts of the parties themselves.
2. Mediation or conciliation – 3rd party intervention makes a non-binding decision.
3. An adjudicative process – final outcome determined by a 3rd party who’s decision is binding.

Question 20

6.4 What are the types of Dispute Resolution?

Answer 20

Negotiation
Mediation and Conciliation
Expert Determination
Adjudication:
Arbitration:

Question 21

6.41 What is the difference between adjudication and arbitration?

Answer 21

• Parties to a construction contract are entitled to adjudication under English law even if it is not stated in the contract (under the Local Democracy, Economic Development and Construction Act 2009 amendments in 2011 to the Housing Grants, Construction and Regeneration Act 1996).
• In JCT contracts, where is no nominated adjudication body, it will be the RICS.
• Adjudication is meant to be quicker and cheaper than arbitration or litigation, as adjudicators must reach a decision within 28 days. Adjudication decisions can be appealed and taken to arbitration or litigation.
• Arbitration is an alternative to litigation. Arbitration can only be used if it is stated as being able to be used as an alternative to litigation in the contract. Where arbitration is allowed for in contracts, the President or Vice President of the RICS will select the Arbitrator.
• The decision reached in arbitration is final and binding (as it is the equivalent to litigation), unless appealed and taken to the court of appeal.
• Adjudication is confidential, unless appealed to arbitration / litigation where it could be public.
• Arbitration is only confidential if parties agree for the case to be confidential.
• Adjudication was designed to be more informal to enable fast and cost effective dispute resolution in contracts (under the Housing Grants, Construction and Regeneration Act 1996). If you are not happy with the adjudicator’s decision, you can go to court and enter arbitration. However with arbitration, unless you can go to the Court of Appeal, the decision is final and legally binding.
• With adjudication you can take your problem to court if you’re not happy with the outcome. With arbitration you will have to go with arbitrator’s decision and you may not be able to go to court later if you don’t agree with the outcome.

Question 22

6.5 What are the Civil Procedure Rules and how do they apply to the construction industry?

Answer 22

• The rules used by courts in England and Wales.
• The CPR aim to improve access to justice by making legal proceedings cheaper, quicker and easier to understand for non-lawyers.
• The CPR encourages the use of ADR to settle disputes outside of court.
• Depending on the value of the case, the CPR prescribes different routes to manage the case:
o Small Claims Track – below £1K
o Fast Claims Track – up to £25K
o Multi Claims Track – above £25K

Question 23

6.6 What are ADR techniques?

Answer 23

This stands for Alternative Dispute Resolution and refers to any technique that is not litigation or arbitration.
Advantages of ADR:

 Speed – takes less time than court proceedings following the CPR.
 Informality – outside of court.
 Greater opportunity for negotiation.
 Cost – less money on professional fees that litigation.
 Quality of decision making – as it’s made by experts in the field not judges.

Question 24

6.7 What types is most popular within the construction industry?

Answer 24

Adjudication.

Question 25

6.8 What does JCT recommend for ADR?

Answer 25

The methods of dispute resolution are referenced in the Articles: • Mediation • Adjudication (adjudicator can be named in Contract Particulars) • Arbitration (Appointing body can be named in Contract Particulars)

Question 26

6.9 What is conflict?

Answer 26

• When two or more parties have a difference of opinion. • It can be positive or negative and lead to: o Arguments. o Negotiation. o Dispute resolution. o Innovation.

Question 27

6.10 What are the different techniques of conflict avoidance?

Answer 27

CCSFA • Confronting – collaborative, confront the issue rather than each other. • Compromising – give and take. • Smoothing – more accommodating, involves sacrifice. • Forcing – force your view to complete disregard of the other view. • Avoiding – postponing.

Question 28

6.11 What is your for conflict avoidance style?

Answer 28

* I generally confront the issue as I feel that this is the quickest and least adversarial way to avoid conflict, by dealing with the facts. * I would be forcing when I believe the position is clear cut in order to protect the client.

Question 29

6.12 What conflict have you come across and how did you manage it?

Answer 29

Cost of a variation (Coventry Furniture Removal) • If email has not reached an agreement then have a meeting ensuring all information and parties who can make decision present. • Mediate session, trying to promote a non-adversarial atmosphere, allowing conflict of facts not feelings. • Apply the RICS professional and ethical standards, integrity and respect.

Question 30

6.13 If you cannot resolve an issue during the meeting what would you do?

Answer 30

I would deal with the above by: • Suggest that the issue be taken ‘off-line’ which is avoidance and postponing the conflict. • This allows actions to be agreed to ensure that the information has been provided and digested by both parties. • I would call each party separately and discuss their thoughts prior to arranging a follow up meeting. • Sometimes it is not possible for everyone to be happy with a decision. • I would speak to the unhappy party privately and seek commitment that their performance would not be affected.