Resolving disputes May 2013

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Resolving disputes May 2013

  1. 1. Resolving Disputes CECA North East and Yorkshire and Humberside clear practical advice Sarah Wilson May 2013
  2. 2. 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?
  3. 3. Strategy • • • • What is in dispute? What is your position? What are your / their weaknesses? What can you do? – negotiation – correspondence
  4. 4. Type of disputes tend to be; • Under valued Final Account (variations) • Defective work • Claims for varied works, EOT / LAD’s, costs related to EOT
  5. 5. 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
  6. 6. Informal methods Negotiation • non-confrontational (preserve relationships) • authority to settle • commercial considerations? • settlement parameters? • without prejudice
  7. 7. 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?
  8. 8. Mediation (1) • • • • • Informal Consensual Independent third party Without prejudice and confidential Not binding
  9. 9. Mediation (2) • Cost effective? • Flexible? The process • Appointment of a mediator • Position statements • Joint session/opening statements • Private meetings/bargaining phase • Settlement
  10. 10. Mediation (3) www.cedr.com www.civilmediation.justice.gov.uk
  11. 11. Expert evaluation – independent third party – agree appointment/nomination Best used as the basis of further discussions, rather than by way of a binding determination
  12. 12. Early Neutral Evaluation • non binding • 1st impressions
  13. 13. Adjudication (1) • • • • • Specific to the construction industry Temporarily binding Independent third party Implied by statute Speed – 28 days
  14. 14. Adjudication (2) The process • Adjudication Notice – crystallise dispute – define jurisdiction • Appointment of an Adjudicator – contract – agreement – nomination
  15. 15. Adjudication (3) The process, cont… • Referral Notice – 7 days • Response – 7 days • Further submissions • Meeting? • Decision
  16. 16. Adjudication (4) Why is adjudication becoming less popular? • Rough and ready process • Costs are not recoverable • Intense process - resources
  17. 17. 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
  18. 18. Litigation (3) The process • Statements of case • Disclosure • Witness statements • Expert evidence • Trial Costs are recoverable (60% to 70%)
  19. 19. 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
  20. 20. 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 √ ? ? √√
  21. 21. Recoverability of Costs Cost 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%
  22. 22. Speed, Conclusivity, Confidentiality and Maintaining Relations Speed Time to complete Determinative Confidential Maintain relations Mediation ENE Expert 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
  23. 23. Summary Cost Recoverable from Opponent if successful Payable to Opponent if unsuccessful Time to Complete Determinative Confidential Maintain relations Mediation ENE Expert 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 High Yes – 60/70% Yes 60/70% 12 – 15 months Yes (subject to appeal) Court – no Arbitration yes Litigation Court/Arbitration – XX -
  24. 24. Conclusion What is appropriate in the circumstances? Either one or a combination of methods?
  25. 25. Resolving Disputes CECA North East and Yorkshire and Humberside clear practical advice Sarah Wilson May 2013

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