Alternative Dispute Resolution (ADR)…in Construction and Civil Engineering Contracts
The UK construction and civil engineering industry has the highest level of disputes. The heterogeneous nature of construction work, poor procurement and frankly the unknown will often lead to claims for extra payment, plus unfortunately the inherent “dog eat dog” culture between contractors, sub-contractors and streetwise traders often leading to dispute, which can be tens or hundreds of thousands of pounds.
Typical disputes include quarrels about the value of interim payments, payment notices and default payments, final accounts, retention, delays, liquidated damages, loss and expense, repudiatory breach, bankruptcy, defects, practical completion, incomplete work, design failure, contract terms and variations. It can get long winded, complex and often deceitful.
Unlocking the negativity of the dispute when it arises requires speed and the lowest possible cost.
"Oh, what a tangled web we weave. When first we
practice to deceive". Marmion - Walter Scott
So how should you deal with the dispute? There are two approaches:
1. Alternative Dispute Resolution (ADR), which is “anything but go to court”.
2. Court proceedings
Arbicon are experienced Experts in the full spectrum of construction ADR processes available.
So why choose ADR and not Court?
You do not need a solicitor or barrister
Often solicitors and barristers have never seen a building site, let alone have any knowledge of construction technology, the culture or the process. You need lawyers for court proceedings which are often lengthy and uneconomic and should be avoided if possible.
You simply do not need to go to court with ADR
The courts themselves recognise that they do not want to see parties burdening the taxpayer, you will most likely be pushed into ADR in any event through the ‘Pre-action Protocol for Construction and Engineering Disputes (PAP)’.
The court process is now governed by strict rules on costs
Only a fraction of costs are often recoverable and the spectre of this possibility before you go to court should be fully appreciated. The unrecoverable court costs (sometimes 75%) might easily outstrip your claim very quickly and spiral out of control.
Arbicon will assist and represent you to find the quickest, most cost-effective way to resolve the dispute by ADR prior to or during court proceedings, typically by:
Expert Negotiation and/or the Threat of Formal ADR
The first step Arbicon will take is to evaluate your legal position and that of the other side and provide an overview plus strategy going forward. Arbicon will set out that position with formal correspondence, which with the threat of proceedings, will focus the other side prompting them to negotiate a settlement or crystallise the dispute. In the latter case your “ducks” will be “set up in a row” ready for the next level of dispute process such as adjudication.
If a settlement is achieved at this stage it will have been an effective, fast and economic end to the problem! If not you will be evidentially set up to proceed to adjudication.
Get in touch with our team of Experts to evaluate your dispute.
Since 1st May 1998, there has been a Statutory right to Adjudicate any commercial construction dispute at any time without the need for a specific contract clause.
The Adjudication infrastructure in place now is a "well-oiled machine", both in terms of the quality of Adjudicators and case law behind it. It is a formal, very fast and effective alternative dispute resolution (ADR) process to end commercial construction disputes and much cheaper than court proceedings. It is a specialist area of law that many solicitors do not have any experience of thus it is essential that any case representation is properly advocated by experienced construction professionals such as Arbicon. The effective Adjudicators and Advocates are normally Chartered Quantity Surveyors as are Arbicon, experienced in working on construction projects and experts in the measurement and valuation of construction work and time.
The adjudication process generally takes 28 days and can be used in disputes going into millions of pounds, irrespective of any Court proceedings that may have already started.
Arbicon and its Directors have been involved in Adjudication since it started in 1998 and can act as both a party Advocate or can appoint an Arbicon Adjudicator.
To find out more about adjudication click here.
Mediation is a well-established process used to resolve disagreements where an impartial third party (the mediator) helps parties to the dispute find a mutually acceptable resolution.
Unlike Adjudication and Arbitration there is no determination of the dispute by a third party. The process is totally without prejudice and confidential. Mediation explores the psychology of the parties in dispute, allowing in a friendly environment the parties to step back to consider their positions to look at the behaviour and reality of what has happened and what will happen if the dispute continues. The process can also recover business relations. It does need both parties to co-operate if a settlement, which is the objective is to be reached at the end of the day.
To find out more about mediation click here.
Arbitration can be used where a party or parties seek a final determination of a dispute. Unlike Court proceedings, which are similar, the dispute is held privately and confidentially as opposed to open Court. The arbitrator is paid by the parties as opposed to a Judge who is free. Legal Costs can be recovered, the Arbitrator decides who pays the costs of his fees and the legal costs of the action depending on any cost agreement or law in respect of "costs following the event".
Arbitration practice and procedure is governed by statute in England, Wales and Northern Ireland under the Arbitration Act 1996. The Act provides mandatory and optional rights to the parties, thus guidance in setting up an arbitration agreement and the execution of arbitration proceedings needs the care and help that Arbicon can provide.
Arbicon arbitrators when appointed take a more modern approach to arbitration, adopting a more commercial, quicker process for the parties. The way the process should be conducted moving away from the old school thinking and expensive approach.
To find out more about arbitration click here.
Arbicon as Chartered Surveyors can provide Expert Determination services and Expert Witness evidence fully compliant with RICS practice statements and CPR 35 for any Court or Tribunal.
To find out more about our Expert Witness service, click here.
If you are seeking to resolve a construction dispute, please use our contact form or call our offices below: