This document discusses construction dispute resolution and avoidance in a booming construction market. It summarizes various dispute resolution methods including (1) adjudication which provides quick, binding interim decisions but may be less suited to complex cases; (2) court proceedings through the specialist Technology and Construction Court which are suited to complex cases but slow and expensive; (3) arbitration which is confidential but can be slow to start; and (4) alternative dispute resolution methods like mediation and dispute boards. It stresses that dispute avoidance through careful contract drafting and project management is the cheapest option.

1. Ben Worthington, Senior Associate | 18 June 2015
ben.worthington@olswang.com | +44 20 7067 3541 | @disputes_lawyer
London Build 2015
Construction Dispute Resolution and
Avoidance in a Boom Market

2. |
Introduction
constructiveblog.comConstruction Dispute Resolution and Avoidance in a Boom Market2
• Current trends
• Methods of resolving disputes
• Adjudication
• Court proceedings
• Arbitral proceedings
• ADR
• Dispute avoidance

3. |
(1) Adjudication
constructiveblog.comConstruction Dispute Resolution and Avoidance in a Boom Market3
• Introduced by the Housing Grants, Construction and Regeneration Act 1996
• Applies to construction contracts
• Key features :
• Right to refer disputes to adjudication at any time
• Parties to a construction contract cannot contract out
• Speed (28 days – 42 days)
• Cost (versus other tribunals)
• Binding on an interim basis
• Courts will usually enforce
• Private process (unless it goes to enforcement)

4. |
When to use adjudication
constructiveblog.comConstruction Dispute Resolution and Avoidance in a Boom Market4
• Adjudication is ideally suited to :
• Payment disputes (interim or final account disputes)
• Extension of claims
• Disruption claims
• But is (arguably!) less well suited to :
• Factually complicated disputes
• Disputes that that require substantial expert evidence
• Professional negligence claims

5. |
Common issues in adjudications
constructiveblog.comConstruction Dispute Resolution and Avoidance in a Boom Market5
• Ambush
• Jurisdictional and other challenges are commonplace
• No dispute
• Failure of appointment process
• Breach of natural justice
• Quality of the decision
• “The need to have the "right“ answer has been subordinated to the need to have an answer quickly.
The scheme was not enacted in order to provide definitive answers to complex questions.” Chadwick
LJ in Carillion Construction Ltd v Devenport Royal Dockyard Ltd (CA) (2005)

6. |
(2) Court proceedings
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• Technology and Construction Court
• Specialist court
• Full time TCC judges in London, Birmingham, Manchester and Liverpool
• Default option under many standard form contracts
• Key features
• Ideally suited to complex disputes
• High quality decisions by experienced judges
• Wide ranging powers
• Pre-Action requirements
• Slow / expensive
• Lack of flexibility
• Publicity

7. |
Pre-Action Protocols
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• Govern pre-action conduct
• Encourage the exchange of information early
• Letter of Claim
• Letter of Response
• Reply
• Pre-Action Meeting
• Expert evidence
• Costs

8. |
(3) Arbitration
constructiveblog.comConstruction Dispute Resolution and Avoidance in a Boom Market8
• Why bother?
• Adjudication seems to suit much of the UK construction market
• Courts are good
• Judges are more or less free!
• Money judgments are enforceable across the EU
• When to use it?
• International contracts
• You wan to avoid local courts
• You want to limit document disclosure
• You want to choose your tribunal
• You want a shorter hearing

9. |
Pros and Cons of arbitration
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• Pros:
• Confidentiality – hearings and decisions are private
• Enforceable
• Limited appeal
• Flexible procedure agreed by the parties
• Choose your own judge / tribunal
• Cons:
• Certain types of relief difficult to obtain e.g. interim injunctions / summary judgment
• Speed – it can take 3 months to appoint arbitrator
• Compromise decisions
• Cannot add unwilling parties

10. |
(4) Other forms of dispute resolution
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• Mediation
• Flexible
• Private
• Preservation of relationships
• Dispute boards
• Project specific appointments - board members become familiar with the project and
issues as they arise
• Flexible
• Expensive
• Expert determination
• Technical issues
• Valuation disputes
• Not suited to factual or legal issues

11. |
(5) Dispute avoidance
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• Cheapest option!
• Contract drafting
• Problem solving hierarchies
• Core groups
• Training and awareness - understanding the contract and the parties’ roles
• Design

12. |
For more information please contact
Olswang:
Changing Business.
www.olswang.com
Ben Worthington
Construction
+44 20 7067 3541
ben.worthington@olswang.com
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+49 30 700 171 100
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+32 2 647 4772
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+44 20 7067 3000
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