What is Dispute Resolution?
Dispute resolution is the process whereby an independent third party (or group of third parties) considers the positions of the parties and then provides a (usually binding) decision or, depending on the type of dispute resolution) assists the parties in negotiating their own agreement.
Generally, there are two discrete categories of dispute resolution: that provided directly by the state through the courts, known as litigation, and all others which are subject to private agreement and known collectively as Alternative Dispute Resolution (ADR).
Some processes of ADR, whilst they are subject to private agreement, are regulated by the state by way of legislation, for example Adjudication and Arbitration.
The most commonly known process of dispute resolution whereby one party ‘sues’ another in the court and the outcome is decided by a judge. The process is entirely adversarial and bound by format, process and procedure.
Often, litigation is considered to be too slow and costly to be an effective method of dispute resolution for many disputes. In fact, it is said that only 10% of disputes are ultimately heard in court.
As the judges are appointed by the state, litigation falls outside the scope of the Construction Disputes Board services.
If you are considering commencing litigation proceedings, we can assist you to locate an appropriate solicitor to represent you. Please contact us for more information.
Adjudication is a fast track dispute resolution process introduced and regulated by the Construction Contracts Act 2002. Its primary intention is to produce a temporarily (or permanently if the parties choose) binding determination of the matter in dispute to improve cash flow.
The process is compulsory insofar as either party can commence adjudication proceedings against the other without prior agreement. Generally, the parties will make their case in written submissions to the adjudicator (but meetings and site visits can take place) who, within a strict timescale, will issue a determination.
A party can enforce a determination in court if the other party fails to comply.
An adjudicator is either appointed by agreement of the parties, named within the contract or nominated by an Authorised Nominating Authority (ANA).
As a new organisation, we are currently waiting authority from the Minister of Building to act as an ANA; in the meantime, if you wish to have one of our members as your adjudicator by agreement or named in your contract, please contact us for more information.
Arbitration is a formal, private dispute resolution process akin to the courts but with more flexibility. It is regulated by the Arbitration Act 1996 and the Arbitration Amendment Act 2007.
Unlike litigation or adjudication (which are compulsory), arbitration requires the agreement of the parties. Often this is in the form of an ‘arbitration agreement’ contained within the contract. The arbitration agreement can simply be a statement that disputes will be referred to arbitration, or can be much more detailed setting out process and procedure, In either case, the agreement must be compliant with the relevant Acts.
Arbitration procedures can be many and varied and included cost limits, time limits, documents only, full hearing etc. The parties will make their submissions to the Arbitrator, which may include expert evidence, oral hearings and cross examination.
The Arbitrator will issue his award, which is binding on the parties and enforceable in court.
If you want us to nominate an arbitrator, please click here
Mediation is a consensual, confidential and relatively informal negotiation process in which parties to a dispute use the services of a skilled and independent third party called a mediator to assist them to define the issues in dispute, to develop and explore settlement options, to assess the implications of settlement options and to negotiate a mutually acceptable settlement of that dispute which meets their interests and needs.
Generally, any agreement reached will be recoded in writing and will be binding on the parties. Any party to such agreement may enforce its terms by issuing court proceedings.
Mediation has the advantage of assisting in repairing and/or preserving relationships where adversarial proceedings may not. Mediation is a particularly effective process in circumstances where there needs to be an ongoing relationship between the parties.
If you want us to nominate a mediator, please click here
Expert determination is a relatively informal process, requiring the consent of both parties.
Essentially, an independent expert is nominated or agreed by the parties as their expertise is particularly germane to the matter in dispute. The process is entirely ad-hoc but would usually involve the parties putting their respective positions to the expert who then issues his determination.
Beforehand, the parties would need to agree whether the expert’s determination will be binding or not. If it is to be binding, then it will likely be enforceable in court.
As a less adversarial process, it is likely to maintain business relationships.
If you want us to nominate an expert, please click here
Dispute Review Boards
Dispute review boards are normally set up at the outset of a contract and remain in place throughout its duration. Generally comprising one or three members thoroughly acquainted with the contract and its performance, the review board informally assists the parties, if they desire, in resolving disagreements arising in the course of the contract and makes recommendations or decisions regarding disputed referred to it or any of the parties. If you want us to assist in the setting up of a review board, please contact us