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