H24MPP Lecture 12

Alternative Dispute Resolution

Ioannes Tang
Senior University Teaching Fellow
Department of Civil Engineering
Faculty of Engineering
Room: B1C16, Telephone: 03-8924 8346
Email: Ioannes.Tang@nottingham.edu.my

Based on original notes by

W H Askew

Choice of Dispute
Resolution Systems
A range of methods are available
depending on cost and available time due
to the effort and input required.
A decision under many of these can
sometimes be taken to the next level if
dissatisfied with decision.

Types of Dispute
Resolution Systems

Engineers decision
Negotiation
Mediation
Conciliation
Adjudication
Arbitration
Litigation
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Engineers Decision
In ICE Conditions of Contract

Negotiation
Freestyle meetings
Can be formal or informal meetings
between the parties in dispute
May move to the structure of one of the
following systems involving a third party.

Mediation
Neutral 3rd party that gets things moving
Aims to find a middle ground by negotiation.
The formal procedure involves separate,
private negotiation with each party leading
to accelerated settlement discussions.
The outcome can be legally enforceable in
contracts.
The mediator does not express a view
publicly.
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Conciliation
More formal procedure e.g. ICE Conciliation
Procedure in Clause 66(5)
Results are binding unless taken to
adjudication
Conciliator can (and may have to) express a
provisional view on the merits of the case
Decision to refer to adjudication is binding

Adjudication I
Summary process in which parties to a
contract refer disputes to a neutral 3rd party
for a decision
Must be available in Britain under HGCRA
1996 for a decision by an independent
adjudicator, usually an engineer with legal
knowledge
Outcome of adjudication is binding on the
parties
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Adjudication II
Adjudicator cannot be held liable for their
decision unless it can be proved they acted in
bad faith.
On the decision one party is compelled to make
a payment to the other at least temporarily.
This act in itself can make the adjudication
decision the subject of another dispute if one
party feels dissatisfaction with it.

NEC3
Dispute clauses W1.1 or W2.1
A dispute arising under this contract is
referred to and decided by the Adjudicator.
W2.1 adds: A party may refer a dispute to
the Adjudicator at any time. Time periods
are in days excluding Christmas Day, Good
Friday and bank holidays.

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Arbitration
Expensive.
Arbitration Act 1996 provides a statutory
framework for arbitration
Expert Arbitrator hears evidence in
private and makes decision.
Findings only made public if referred to
Appeal (on points of law only).
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Litigation
Action taken through law courts (judge
and jury).
In the High Court would probably involve
the Technology and Construction Court.
Findings made public.

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Partnering I
Key aim is to avoid disputes.
All key players involved from start with express
obligations to work together and individually in
a spirit of trust, fairness and mutual
cooperation.
Use NEC 3 or
PPC2000
A Partnering Adviser supports the Partnering
Team and prepares the partnering charter and
advises on resolution of disputes
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Partnering II
Procedure invokes hierarchy aimed at avoiding
arbitration or litigation.
Financial disputes can be avoided by open book
accounting and refunding contractor with actual
costs with extra for profit and overheads
This requires a Price Framework and Agreed
Maximum Price (subject to allowable change or
risk occurrence).
May be linked to performance as defined
through KPIs.
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