Throughout different countries around the world, there are a variety of different legal systems and procedures, and this is no less true when it comes to processes and mechanisms for resolving building disputes.
Notwithstanding this, there are a number of elements which underpin effective systems for construction dispute resolution in any country. It is important to define these so they can serve as guiding principles for policy makers in defining effective systems in this area.
Designed to allow for faster processes, best practice alternative methods of dispute resolution and use of competent and impartial expert witnesses, the 12-point model outlined below can be applied to processes conducted through courts or tribunals but must be established by an Act of Parliament or regulation as the system will be substantially funded by the Crown.
To initiate proceedings, an application in a prescribed form will be filled out and filed online with the dispute resolution theatre, be it a court or a tribunal. There will of course be a prescribed fee.
The form will be receipted, stamped and returned to the applicant who will then serve a copy on the other party.
Within one month of filing, there will be a directions hearing with a decision maker who will ascertain from the parties whether an independent technical expert is required. If the answer is affirmative, the parties will be required to pay for that retainer on a 50-50 basis. The expert will be nominated by from a panel of independent and accredited experts to ensure impartiality.
The expert will conduct an inspection of the works in disputes, caucus with the parties, identify any defects and determine the cost of rectification, if applicable. If the expert considers that an additional expert is required, he or she will notify the decision maker and a further directions hearing will be called whereupon the decision maker will sanction that additional deployment at the cost of the parties and further deployment will occur.
Once the expert’s reports are finalised, the forum will be notified and a compulsory mediation will occur before an independent mediator. The cost of the mediation will be borne by the parties in equal shares. The expert’s reports will be tendered and the expert will be at hand to parley.
The mediation will give regard to the independent technical report notwithstanding that the report will not be binding. It will, however, be considered persuasive in terms of its import, costings and recommendations.
With the assistance of the mediator, the parties will endeavour to resolve the dispute. If this happens, the resolution will be signed and the matter will be at an end.
If no resolution is forthcoming, a new directions hearing will be convened whereupon the parties will be required to file a formal claim, defence and counterclaim and any reply. There will also be a simultaneous order that discovery of all documents relevant to the proceeding be filed prior to pleadings ceasing least any adjustments need to be made to pleadings.
Once pleadings and discovery are completed, the decision maker will order a date for hearing, but on day one there will be a further compulsory mediation and if this proves to be unsuccessful the hearing will commence.
In terms of expert evidence, the sole evidence that will be relied upon will be that of the tribunal/court nominated expert(s). This is designed to ensure impartiality and to reduce the costs of conflicting expert testimony.
At the end of each day of hearing, the party’s advocates will be required to caucus for not less than quarter of an hour lest there is a further opportunity for settlement.
At the conclusion of the hearing, a determination will be made at the earliest possible juncture, the technical expert’s recommendations will be considered persuasive along with the views of the advocates. When the decision is handed down and there is a clear victor, that victor will be entitled to judgment along with reimbursement of the costs of prosecuting the claim. The costs will be reimbursed on a full indemnity basis.
Advantages of this model are many. Compelling the parties to use tribunal/court nominated experts guarantees impartiality and avoids costs and time associated with contradictory expert evidence which sceptics feel is often shaped by the best case scenario wishes of the expert’s fee paying client. Captive to no party, the independent technical assessor (who would of course have to be of the highest qualification and experience criteria) would at least halve the cost of expert deployment and remove opportunities for conflicting testimony. Making mediation compulsory, meanwhile, would also increase the chances of settlement.
By applying the principles outlined above, dispute resolution systems in any country should work effectively for builder and client alike.
I think this is a workable framework. I wonder, however, whether a fixed schedule with timetable for the hearing, and award, might enhance its attractiveness? Having worked in the construction field, and being involved as advocate, arbitrator and mediator, the promptness of resolution is often what is needed to keep the overall project on target for completion. I think the USOC put in this type of system for London, with great success. The "Project Mediation" concept I think will have great utility across all spectrums of construction, but particularly "public" projects.
1. The panel of experts to select from need to be industry recongnised leaders in what they do. If there is only one expert you need to select from the best.
2. To ensure buy in to the procedure by the parties (as opposed to being simply being forced to comply) reasonable opportunity needs to be made for the parties to put their position to the nominated expert. That will take some of the sting out of there only being one expert.
3. Compulsory mediation is great if it gets the parties around a table a couple of times. What is also needed to support that is better education in the industry (all industries in fact) on the cost benefits of early resolution in commercial disputes.
4. The mediators need to be independent and neutral not evaluative. Otherwise parties will fight this sort of format.