M006 Conflict of interest

M006 Conflict of interest

1. Standard form of contract deal with Conflict avoidance and DR

   • ICE, NEC & JCT have adopted adjudication
     • effecive after incorporation of HGCRA Act 1996
     • now statutory requirement of UK contracts
     • decision in 28 days
   • difference between UK Adjudication and FIDIC adjudication
     • UK requirement based on statue
     • FIDIC is a contract based requirement
       • FIDIC 1999 form of contract inc DAB (dispute Adjudication Boards) provision 1 or 3 members. its contractual and all parties to abide by decision
         • DAB provision
           • standing disputes board
           • standing body and visits site reg.
           • 84 days 2 make a decision
           • decision is final and binding if no notice of disatifaction if given

2. Hierachy of DR

   • 1. Negotiaiton
     • 2. Mediation
       • 3. Conciliation
         • 4. Early neutral evaluation
           • 5. Expert determination
             • 6. Adjudication
               • 7. Arbritration/litigation
                 • arbitration: resolve disputes under control of the parties; conditions met e.g. idena genuine dispute, binding agreement 2 submit 2 arb in contract;
                 • Arbitration procedures:
                   • docs only - 30days
                   • short hearing - 30 days
                   • full hearing - long
                 • Difference between Arbitration & litiation
                   • Arbitration:
                     • governed by Arbitration Act 1996
                     • in order 2 arb u must have agreement from both parties
                     • parties have a degree of discretion as to they way proccedings r conducted
                     • similiar 2 litigation in sense of formal submission, expert evidence, hearing & decision by arbitrator
                     • 3 types:
                       • Short hearing - 1 month
                       • Docs only - 1 month
                       • full procedure - long
                     • Advantages: private; parties have flex; arb awards easier 2 enforce
                     • Confidential/ private
                   • Litigation:
                     • presentation of argument in court
                     • public process - follow Civil Proceudure Rule
                     • Advantages: parties don't pay 4 judge/court, speedy & efficient, process can deal with multi parites, Civil Procedure rules = accessibility
                     • good 4 multi-party disputes
                 • Litigation: last resort 2 settle disputes by an action in court of law
                   • Advantages:
                     • 3rd parties can join in on dispute
                     • legal aid avaliable
                     • less expensive than ARB
                     • decisive approach by judge
                   • Disadvantages:
                     • time consuming & unclear results
               • Uk stat DR procedure; relitively quick from submission 2 referral; binding until dispute determined by litigation/arbritation
                 • enforcement in contracts by HGCRA 1996
                   • applies to all E/S/W contracts
                 • if there r no provisions for Adj in contract = Scheme 4 construction contracts applies
                 • its a stat right 2 have adj assuming the contract qualifies under the construction act. if not scheme 4 construction contracts applies
             • resolution by qual. person exp in subject under dispute. they decide the outcome
             • ADVANTAGES:
               • Rapid
               • binding
               • cheap
               • private
               • court gives support to its outcomes/ rulings
           • is a non binding assessment by a neutral professional. this could be used as a bias for settlement
         • Similar 2 mediation; independant party 2 aid agreement; conciliator = no auth 2 seek evidence of call witness; coniliator = makes NO decisions.
           • Difference between Mediation & conciliation:
             • Mediation: brings parties 2gether & agree based on careful approach which best suits both parties
             • conciliation: doesnt try to bring parties together and agrees through a 3rd party acting as a broker
       • ADR - sep 3rd pty 2 mediate & guide a decision optimising parties needs; med encourages coming 2gether and agreeing
         • Centre for effetive dispute resolution CEDR
           • can provide 2 prj mediators 4 a mth retainer 2 a prj
             • attend prj meetings 2 discuss progress - deal with any prb
             • prj mediation w.shop is arranged prior 2 contract commencement - to resolve any conflict using CEDR model mediation procedure
     • parties may through formal/informal process agree to settle the dipute either at high level or in detail & agree 2 b bound by this settlement
       • Success of negotiation: both parties come away happy, costs agreed
   • 1 to 6 are ADR procedures

3. Conflict Avoidance

   • 2 methods
     • management methods
       • reduce risk through better planning e.g. ensuring contract docs are prepared properly & r clear and precise
       • Project & business structures: e.g. partnering/ integrated project teams, using appropriate procurement methods; emp good value management
     • non escalation methods
       • resolving disputes b4 they escalate: e.g. structured negotiation, tired DR mechanisms in contrats
         • using appropriate procurement practice
         • sufficient preparation and tender planning
         • complete design in all respects
         • selection construction contracts e.g NEC/ECC
         • contract docs clear and precise
         • utilising project business structures which reduce risk of disputes e.g. partnering
         • adopt good proj & commercial man practicies
         • pre-contract reviews 2 avoid any issues
         • periodical risk reviews
         • tiered DR mechanisms in contrats
         • use of dispute board and prj mediation
   • project CA
     • client decide what he wants (time, cost, qual, early start)
     • decide appropriate procurement route
     • know the deal with MC - allowcation of risk
     • put in writing all agreed terms & contract docs
     • single pt of responsibility e.g. avoid dispute through bad comminucation
     • ensure the client is always aware of scope/fee inc and costs through financial reporting

4. What is dispute resolution?

   • actions 2 resolve contractural disputes

5. Adjudication

   • not legally binding
   • adj forms an opinion based on evidence
   • parties may accept decision or may agreed to take dispute to a legally binding arbitration or commence litigation
   • referring party: give notice to all others 2 go 4 arbitration
   • fee for adjudication - paid by both parties
     • "pay now, argue later" method adopted in Adj
   • Quick & cost effective
   • Advantages:
     • Independent assessment
     • quick decision
     • binding for duration of contract wrks
     • can b reassessed after completion of wrks
   • Disadvantages:
     • Quick decision
     • used as an ambushing tactic
     • can b reassessed after wks complete

6. Adjudication vs Arbitration

   • Arbitration :
     • consentual process
     • no time limit
     • legally binding
   • Adjudication:
     • right by statute
     • time is limited
     • not legally binding

7. Arbitration

   • settlement of a dispute by an Arbitrator
   • Arbitrator decides the case and award
   • judgement can b incorporated in 2 decree or court
   • Decision = arb knowledge, evidence, enquiries 2
   • Arbitration Act 1996
     • led to the drafting of 2 sets of rules
       • CIMAR (con ind model arb rules 1996)
       • ICE arb procedures 1997
   • Advantages:
     • cheap
     • Quick
     • suitable 4 complex tech matters
     • conveinient
     • private
     • commercially expedient

8. The Technology and Construction Court (TCC)

9. The 4 C's of ADR

   • Consensus (2 find a business solution)
   • Continuity (solution 4 on going business relationship
   • Control (ability 2 tailor a solution geared 4 a business result)
   • Confidentiality (avoid harmful revelations 2 the public