Techniques for resolving conflict in the construction sector

1. RICS Dispute Resolution
Conference
28 January 2014
Early intervention:
Key challenges and new ways forward
Martin Burns BA (Hons) LL.B (Hons) Barrister
Head of ADR Research & Development
Royal Institution of Chartered Surveyors
www.rics.org/drs

2. Why avoid disputes?
Disputes are often the result of minor
issues escalating over time into more
serious issues. When this happens:
•Meaningful negotiations can stall and
positions become entrenched
•Lots of people, capital and resources can
be thrown into the fray again and again,
with little or no success
•People who have got on well may no
longer speak to each other, except through
intermediaries
•Costs can mount out of control
•The dispute spreads and people not
originally involved can get drawn in
•Eventually the small issue which started
the whole thing can end up being all but
forgotten and no one can remember why
there is a dispute in the first place

3. The problem with courts (and
other dispute resolution methods)
They often come too late.
By the time litigation or DR has got started
lots of time and money has usually been
spent on lawyers and claims consultants
Timely completion of the project will have
been jeopardised
And then, when court action or DR has
finished:
•Relationships will have been damaged,
sometimes irrecoverably
•Reputations and brands will have suffered
– (negative press)
•One or both sides will still be unhappy
•Everyone is seriously “out of pocket”

4. Key challenges
Reducing corporate legal spend (a big
motivating factor)
Preventing potential problems from escalating
into dispute that ultimately require litigation
Resolving disputes that do arise quickly and
inexpensively
Encouraging cooperation and equitable risk
allocation.
Concentrating on fixing problems rather than
fixing the blame – or separating people from
the problem
Recognising that it is in everyone’s interest to
co-operate and share allocation of risks
associated with disputes
Prioritising collaborative negotiating as soon as
dispute arise

5. New ways forward
Conflict avoidance, and early intervention
which focusses on solutions
Essential ingredients for avoiding
disputes:
•Early identification of problems/issues
•Early action to deal with them
•Focus on issues
•Structured communications – facilitated
by neutral parties

6. New ways forward
•Making conflict avoidance routine - Building sensible dispute avoidance/resolution provisions into
contract documents
•Encouraging people to take ownership and responsibility for resolving issues - Focussing on
professionalism, objectivity, respect
•Facilitating communication between parties - Managing expectations, being realistic, focussing on
issues and on finding solutions

7. New methods
Conflict Avoidance Panels
•Contractual mechanism to avoid and control
disputes
•Focuses on preventive techniques, including
incentives to encourage cooperation
•Provides equitable risk allocation and
encourages early resolution
•Can be standing or called on when needed (“pay
as you go”)
•Provides for issues to be reviewed by
independent panel (CAP) which makes non-binding
recommendations
•Encourages parties to take ownership of issues,
(CAP recommendations are reasoned and
parties who decline to accept recommendations
must themselves explain why).

8. New methods
Early Neutral Evaluation (ENE)
When contemplating litigation parties routinely ask the
same questions:
1.Do I have a good case?
2.Am I throwing good money after bad?
3.Should I settle, and if so, for how much?
4.If I go ahead with court proceedings, how can I
improve my chances of winning?
5.What will a judge or arbitrator decide on issues of
law?
6.How will the judge evaluate the facts?
7.What will be the judge’s final ruling?
ENE ensures parties have crucial pieces of
information from a neutral person who “has been
there, done that”. This will help them to make
informed decisions, and properly assess risks
associated with going to court
ENE offers a fast, effective and inexpensive way
dealing with issues early and ending disputes before
they escalate

9. Dispute Boards
Includes both Dispute Review Boards (DRBs) and Dispute Adjudication Boards (DABs)
Usually standing boards that exist throughout the lifetime of the contract
DB members will usually be drawn from different professions
Procedure for DB will usually be set out in contract and generally includes:
•Regular site visits
•Project documentation reviews
•Identifying problem issues early and enabling early action to deal with them
•Power to examine all disputes
•Power to make recommendations or decisions

10. Benefits of conflict avoidance
and early intervention methods
•Help to identify problem issues early
and enable early action to deal with
them
•Ensure parties are focussed on
dealing with the problem issues
•Encourages structured
communications, and a “no blame”
culture
•Create a collaborative environment
where all parties work together to
actively seek solutions to problems
Businesses that regularly use conflict
avoidance and early intervention
techniques can function more nimbly
because they can dedicate capital
and employee resources to their
actual business needs

11. RICS Dispute Resolution Service Martin Burns
Surveyor Court Head of ADR Research and Development
Westwood Way mburns@rics.org
Coventry
CV4 8JE
T –020 7334 3806
F- 020 7334 3802
E- drs@rics.org
www.rics.org/drs