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Dispute resolution methods in construction

Dispute resolution is the process through which parties involved in a contract, seek a solution on a claim that one party has made against the other.

The options below, describe the most common dispute resolution methods found in construction:

Mediation

Mediation is a dynamic, structured, interactive process where a neutral third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. All participants in mediation are encouraged to actively participate in the process. Mediation is a “party-centered” process in that it is focused primarily upon the needs, rights, and interests of the parties.

Let’s summarise a few of its key points to remember:

  • It’s included in the Landscape Consultant’s Appointment and the JCLI,
  • A third party acts as a Mediator,
  • It’s a private and confidential process,
  • Participation of both parties is typically voluntary,
  • The final agreement compliance is usually high, since the parties have worked together to find an agreeable solution,
  • The costs are much lower compared to the other resolution methods,
  • An additional benefit is the preservation of the relationship between the parties,
  • ‘Good faith’ plays its part in resolving disputes in this method,
  • It is legally binding only with the agreement of both parties.

Conciliation

Conciliation is very similar to Mediation as they are both voluntary and consensual processes of structured negotiation, where a third party assists the negotiation to achieve a resolution.

In Conciliation however the conciliator evaluates each party’s case and makes a recommendation based on his or her view and this is where their main difference lies, as Mediation is described as a ‘facilitative’ process, whereas Conciliation is described as an ‘evaluative’ process.

Adjudication

This is the process by which disputes between parties to a contract are decided by a third party adjudicator and it is used to obtain a quick, neutral decision on disputes arising from a contract.

During this process, an arbiter or judge reviews evidence and argumentation including legal reasoning set forth by the opposing parties or litigants, and then comes to a decision which determines the rights and obligations between the parties involved.

Again, a few of the key points of this method include that:

  • It is also included in the Landscape Consultant’s Appointment and the JCLI,
  • The right is compulsory in almost all construction contracts,
  • The Adjudicator is appointed by agreement between the parties or by the Construction Industry Council Adjudicator Nominating Body,
  • The Adjudicator appointment is made within 7 days of notice of intent given,
  • The Adjudicator’s decision must be made within 28 days, unless there is an agreed extension by both parties (the Adjudicator can also add 14 days),
  • The decision may be overturned (reversible) by a later decision of an Arbitrator or the Court,
  • The decision is binding and enforceable,
  • There is no right of appeal.

Arbitration

Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the courts. The dispute will be decided by one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), which renders the “arbitration award”. An arbitration award is legally binding on both sides and enforceable in the courts.

The key points for Arbitration include that:

  • It is also included in the Landscape Consultant’s Appointment and the JCLI,
  • It’s also a private resolving mechanism,
  • Parties agree to be bound by a third-party’s decision maker who is appointed by agreement between them,
  • The third party’s decision is legally binding,
  • The award is not directly enforceable, unlike of what may happen in courts,
  • There’s a limited right of review & appeal of the award,
  • And finally concluding to an award is not as speedy as in Adjudication.

Litigation

Litigation is the process of making a civil claim in a Court of Law, where Barristers act on each party’s behalf.

In Litigation there’s normally a formal hearing involved, where in the presence of  a judge, expert witnesses or other witnesses are examined by their own Barrister and also cross-examined, which means that they are examined by the opposing side’s Barrister. The judge will then reach a decision which will be announced and the parties have the right of appeal if they disagree with the decision.

Finally, Litigation’s key points include that:

  • It takes place in a court so it is not private,
  • One party commences a claim against the other in a civil court,
  • The court depends on the specialist nature of the case,
  • There are significant cost and time implications,
  • It’s a less common process, since the other options are now available to most construction contracts,
  • It’s a ‘relationships killer’,
  • The court decision is binding and enforceable.

As mentioned above, expert witnesses are called to be examined and this is a field of expertise that quite a few landscape practices in the UK promote as one of their services, so when you think of an expert witness, try to imagine a Landscape Architect who has scrutinised the evidence provided by the Client and is comfortable enough when being examined, to answer any question by the opposing side’s Barrister and ultimately help the Client win the case through their truthful testimony and support.

 

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