clear practical advice Resolving Disputes CECA North East and Yorkshire and Humberside Sarah Wilson May 2013
Nov 18, 2014
clear practical advice
Resolving Disputes
CECA North East and Yorkshire and Humberside
Sarah WilsonMay 2013
Resolving Disputes
• Adjudication, mediation or court proceedings• The advantages and disadvantages of these three
methods of resolving disputes• Especially with regard to cost, speed, effectiveness and
recovery of legal costs• In addition, tactically, which is the best option?
Strategy
• What is in dispute?• What is your position?• What are your / their weaknesses?• What can you do?
– negotiation– correspondence
Type of disputes tend to be;
• Under valued Final Account (variations)• Defective work• Claims for varied works, EOT / LAD’s, costs related to
EOT
Issues tend to be:
• Responsibility for defects/varied work/late completion• Who takes the risk under the contract• How has quantum been assessed• How has period of delay (critical delay) been assessed
Informal methods
Negotiation• non-confrontational (preserve relationships)• authority to settle• commercial considerations?• settlement parameters?• without prejudice
Dispute Resolution Clause
• What does the contract say?– are there any restrictions?– does the contract require you to engage in a
particular process (e.g. mediation/adjudication)?– does this create any opportunities?
Mediation (1)
• Informal• Consensual• Independent third party• Without prejudice and confidential• Not binding
Mediation (2)
• Cost effective?• Flexible?
The process• Appointment of a mediator• Position statements• Joint session/opening statements• Private meetings/bargaining phase• Settlement
Mediation (3)
www.cedr.com
www.civilmediation.justice.gov.uk
Expert evaluation
– independent third party– agree appointment/nomination
Best used as the basis of further discussions, rather than by way of a binding determination
Early Neutral Evaluation
• non binding• 1st impressions
Adjudication (1)
• Specific to the construction industry• Temporarily binding• Independent third party • Implied by statute• Speed – 28 days
Adjudication (2)
The process• Adjudication Notice
– crystallise dispute– define jurisdiction
• Appointment of an Adjudicator– contract– agreement– nomination
Adjudication (3)
The process, cont…• Referral Notice
– 7 days• Response
– 7 days• Further submissions• Meeting?• Decision
Adjudication (4)
Why is adjudication becoming less popular?• Rough and ready process• Costs are not recoverable• Intense process - resources
Litigation (1)
What does the contract say? Litigation or Arbitration?
Which track? • < £10,000 = small claims• £10,000 to £25,000 = fast track• > £25,000 = multi track
Litigation (3)
The process• Statements of case• Disclosure• Witness statements• Expert evidence• Trial
Costs are recoverable (60% to 70%)
Arbitration Is there an Arbitration Agreement?
Advantages over litigation
• Privacy and confidentiality
• Enforceability
• Flexibility and formality
• Technical expertise
• Speed (?)
• Cost (?) – recoverable 60 – 70% but also Arbitrator’s fees
• Disadvantage = 3rd parties cannot be joined in usually
Dispute Type v Procedure Type
ENE/Expert Determination
Mediation Adjudication Court/Arbitration
Variations √ √ √ √ ?
EOT/LAD’s/L&E X √ √ ? √
Variations and EOT/LAD’s
X √ ? √ √
Defects √ √ ? √ √
Legal argument √ ? ? √ √
Recoverability of CostsCost Recoverable from
Opponent if successful
Payable to Opponent if unsuccessful
Mediation
ENE
Expert determination
‘Low’ No (possibly in settlement)
No
Adjudication Medium No No
Litigation – Court/Arbitration
High Yes – 60/70% Yes 60/70%
Speed, Conclusivity, Confidentiality and Maintaining Relations
Speed Time to complete
Determinative Confidential Maintain relations
MediationENEExpert determination
1-2 months No – agreement required
Yes – usually √
Adjudication 1-2 months Yes – but (strictly speaking) not binding
No X
Litigation – Court/Arbitration 12 – 15 months Yes (subject to appeal)
Court – no Arbitration - yes
XX
Summary
Cost Recoverable from Opponent if successful
Payable to Opponent if unsuccessful
Time to Complete
Determinative Confidential Maintain relations
MediationENEExpert determination
‘Low’ No (possibly in settlement)
No 1-2 months
No – agreement required
Yes – usually √
Adjudication Medium No No 1-2 months
Yes – but (strictly speaking) not binding
No X
Litigation – Court/Arbitration
High Yes – 60/70% Yes 60/70% 12 – 15 months
Yes (subject to appeal)
Court – no Arbitration - yes
XX
Conclusion
What is appropriate in the circumstances?
Either one or a combination of methods?
clear practical advice
Resolving Disputes
CECA North East and Yorkshire and Humberside
Sarah WilsonMay 2013