A talk given to the Institute of Civil Engineers on dispute resolution and dispute avoidance under standard forms of contract in the UK and internationally by Sean Gibbs of Hanscomb Intercontinental.

1. ICE
Glos City Hub
DISPUTE
RESOLUTION
AND AVOIDANCE
Sean Sullivan Gibbs

2. Sean Sullivan Gibbs
Chartered Quantity Surveyor, Adjudicator, Arbitrator, Dispute Board Member,
Quantum Expert, Advocate and Party Representative
• Director Hanscomb Intercontinental Ltd
• Called to the Bar of England by the Middle Temple July 2017
• Fellow of the Royal Institute of Chartered Surveyors
• Fellow of the Chartered Institute of Building
• Fellow of the Chartered Institute of Arbitrators
• Fellow of the Chartered Institute of Civil Engineering Surveyors
• Associate Fellow of the Institute of Chemical Engineers
• Cardiff University Bond Solon accredited expert witness

3. EXPERT ADVISORY AND EXPERT WITNESS
SERVICES FOR THE ONSHORE AND OFFSHORE
CONSTRUCTION, ENGINEERING AND
SHIPBUILDING INDUSTRIES GLOBALLY

5. Thorn v London County Council (1896) 1 App. Cas. 120
if a contractor promises an employer that he can build a structure then that is what he must do,
irrespective of the physical difficulties involved and irrespective of whether the employer produced
the design. The employer does not impliedly warrant the feasibility of the design in the contract
documents, nor the fitness of the site to enable the contractor to complete the work – it is for the
contractor to make the call that it is “buildable” and that he can carry out and complete the works in
accordance with the contract documents by the contract date and for the price.
In effect, the contractor is regarded as having warranted its possibility and the contract will not be
regarded as frustrated unless the impossibility is caused by some supervening event, such as the
destruction of the whole site (which makes the project itself impossible).
Historically in UK disputes arose in construction

6. Brunel was notorious for not paying contractors in the 1830s
regularly terminating
those who displeased him
McIntoshes :
20 June 1865, the Lord Chancellor ordered the GWR
to pay them the £100,000 of their claim,
with 20 years’ accrued interest, and all legal costs.
Historically in UK disputes arose in construction

7. Standard Form Contracts 1900 to 2000’s
JCT
1903 a standard form was produced “under the sanction of the RIBA and in agreement with
the Institute of Builders and the National Federation of Building Trades Employers of Great
Britain and Northern Ireland.” A revised version of this document appeared in 1909.
In 1931 the Joint Contracts Tribunal (JCT) was formed by the Royal Institute of British
Architects (RIBA) and the first JCT standard form of building contract was issued (although
the forms were not referred to as JCT until 1977). A local authorities version was published
in 1937. Later editions of the contract were revised and published in 1939, 1963, 1980,
2011 and 2016.

8. Standard Form Contracts 1900 to 2000’s
ICE
The first edition was published in 1945 and the seventh and final edition was published in
2001. During this time it was the dominant form of contract for civil engineering.
The key characteristics of the contract were:
Valuation by measurement.
Engineering responsibility for design.
Engineer as the impartial certifier and valuer.
Engineer's decision as the first stage of dispute resolution.

9. Standard Form Contracts – ECC / NEC
NEC
• 1993 first NEC contract – then known as the 'New Engineering Contract'
• 1995 second edition, called the NEC Engineering and Construction Contract (ECC), appeared two years
later together with a new Professional Services Contract (PSC), Adjudicator's Contract (AC) and a back-to-
back set of short forms and sub-contracts
• 2005 NEC3 contract suite in 2005, included a new Term Service Contract (TSC) and Framework Contract
(FC)
• 2010 by a Supply Contract (SC)
• 2013 suite was updated and enlarged to 39 documents in April 2013, including a Professional Services
Short Contract (PSSC)
• 2017 NEC4 contract suite the Design Build Operate Contract (DBO) and Alliance Contract (ALC) was added.

10. Disputes from 1900 to 1998 - Litigation or Arbitration

11. 1998 Statutory Adjudication in UK

12. 2011 Amendments to Statutory Adjudication

13. UK ADJUDICATION
• Sole adjudicator – decision 28 days
• Over 2000 disputes referred to adjudicators per
year
• Over 90% of decisions not challenged
• Pay now argue later philosophy

14. DOWNSIDE UK ADJUDICATION
• Nomination fee not recoverable (£400)
• Adjudicator’s fees (£250-£400)
• Party costs not recoverable (legal, management, expert)
• Decision not final & binding
• Damages relationships

15. International Adjudication
• Australian Capital Territory – Building and Construction Industry Security of Payment Act 2009;
• Ireland – Construction Contracts Act 2013;
• Isle of Man – Construction Contracts Act 2004;
• Malaysia – Construction Industry Payment and Adjudication Act 2012;
• New South Wales – Building and Construction Industry Security of Payment Act 1999;
• New Zealand – Construction Contracts Act 2002;
• Northern Territory – Construction Contracts (Security of Payments) Act 2004;
• Ontario – Construction Act 2019;
• Queensland – Building Industry Fairness (Security of Payment) Act 2017;
• Singapore – Building and Construction Industry Security of Payment Act 2004;
• South Australia – Building and Construction Industry Security of Payment Act 2009;
• Tasmania – Building and Construction Industry Security of Payment Act 2009;
• Victoria – Building and Construction Industry Security of Payment Act 2002;
• Western Australia – Construction Contracts Act 2004.

16. International Construction Forms of Contact

17. Fédération Internationale Des Ingénieurs-Conseils1 (FIDIC) was founded in Belgium in 1913.
1957 the first FIDIC standard form contract was produced. The first contract, known as the Red Book first
edition, was not actually drafted by FIDIC but was instead an authorised reproduction, ‘re-badged’ by FIDIC, of
the ICE Conditions of Contract fourth edition, published by the Institution of Civil Engineers.
Successive editions of the Red Book were issued in 1969, 1977 and 1988.
The other long-established FIDIC contract is the Yellow Book, first produced in 1963 and with subsequent
editions in 1988 and 1987, which is the design and build equivalent of the employer design Red Book.
ENGINEERS DETERMINATION THEN ARBITARTION

18. 1995 DISPUTE ADJDUCIATION BOARD (DAB)
INTRODUCED AS STEP BEFORE ARBITRATION
Conditions of Contract for Design-Build
and Turnkey, 1st ed. (1995).

19. 1999 DISPUTE ADJDUCIATION BOARD (DAB)

20. GLOBAL CONSTRUCTION DISPUTES

21. GLOBAL CONSTRUCTION DISPUTES

22. UK CONSTRUCTION DISPUTES

23. NEC 4 / FIDIC 2017
W1 provides for adjudication outside of the UK Act
W2 UK Adjudication
W3 DAB (Dispute Avoidance Board)

24. NEC 4 / FIDIC 2017
Second edition of the Red, Yellow and Silver books
was unveiled in December 2017, at the International
FIDIC Contract Users Conference in London.
A key theme of the Second Edition is the increased
emphasis on dispute avoidance.
DAAB (dispute avoidance
& adjudication board)

25. NEC 4 2019
Practice Note 5
DAB (dispute avoidance
board)

26. https://www.rics.org/uk/footer/dispute-resolution-
service/conflict-avoidance-pledge/

27. •Royal Institution of Chartered Surveyors (RICS)
•Institution of Civil Engineers (ICE)
•International Chamber of Commerce (ICC) United Kingdom
•Royal Institute of British Architects (RIBA)
•Chartered Institute of Arbitrators (CIArb)
•Dispute Resolution Board Foundation (DRBF)
•Chartered Institution of Civil Engineering Surveyors (ICES)
•Transport for London (TfL)
•Network Rail

28. CONFLICT AVOIDANCE PLEDGE
‘The Conflict Avoidance Pledge is driving behaviour
change in the land, property and construction industry by
encouraging all organisations to consider their working
practices and the way they deal with disputes. The
pledge is voluntary and self-assessed, and can be signed
by any organisation or firm regardless of size or location.’

29. www.hanscombintercontinental.com
5 CHANCERY LANE, LONDON UK
EAGLE TOWER, CHELTENHAM UK
HONG KONG
JOHANNESBOURG
NEW YORK
SEAN SULLIVAN GIBBS
+44 (0)20 3287 8518
sean.gibbs@hanscombintercontinental.co.uk
44 (0) 7722 643 8146