Flashcards in Level 1 - Conflict avoidance Deck (30)
N1. Under JCT how long does an adjudicator have to make his award?
• 28 days from issue of the referral notice, but this can be extended to 42 if both parties agree.
N2. How do you avoid conflict on a project?
• 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.
N3. What is the difference between Mediation and Conciliation?
• 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.
N4. What is ADR?
• ADR stands for Alternative Dispute Resolution, and was introduced as part of the Civil Procedure Rules 1998.
• These Alternative Dispute Resolution procedures are:
N5. What are the Civil Procedure Rules 1998?
• An improvement to the legal system, making it quicker, cheaper and easier to understand through the introduction of Alternative Dispute Resolution (ADR).
N6. What Dispute Resolution method is named in your contract?
• JCT = Adjudication.
• NEC = Adjudication.
• NFDC = Ajudication
N7. . What do you understand by Statutory?
• Statutory Law (Statue Law) is set down by legislate.
N8. Talk me through how you would go about negotiating something?
• 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.
N9. What is the Adjudication Process?
• 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.
N10. What is Litigation?
• 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.
N11. What is Arbitration?
• The use of an Arbitrator to settle disputes.
• It is a private, judicial determination of a dispute by an independent third party.
N12. What is the Arbitration Process?
• 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 Arbitrator exceeded their power.
N13. How do you prepare for a negotiation?
• 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.
N14. What is a Dispute Board?
• 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.
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?
• 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.
N. Once in a Final Account negotiation, how do you proceed to agree the Final Account.
• 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.
6.1 Why can disputes occur?
• 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)
6.2 How are disputes avoided?
• Robust tender and contract documentation.
• Controlled change.
• Informed procurement strategies.
• Sensible risk allocation.
• Appropriate financing.
• Pro-active project management.
6.3 What techniques are available to resolve disputes?
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.
6.4 What are the types of Dispute Resolution?
Mediation and Conciliation
6.41 What is the difference between adjudication and arbitration?
• 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.
6.5 What are the Civil Procedure Rules and how do they apply to the construction industry?
• 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
6.6 What are ADR techniques?
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.
6.7 What types is most popular within the construction industry?
6.8 What does JCT recommend for ADR?
The methods of dispute resolution are referenced in the Articles:
• Adjudication (adjudicator can be named in Contract Particulars)
• Arbitration (Appointing body can be named in Contract Particulars)
6.9 What is conflict?
• When two or more parties have a difference of opinion.
• It can be positive or negative and lead to:
o Dispute resolution.
6.10 What are the different techniques of conflict avoidance?
• 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.
6.11 What is your for conflict avoidance style?
• 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.
6.12 What conflict have you come across and how did you manage it?
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.