dispute avoidance in practice or how to stop a simple problem spiraling from a breeze to a whirlwind Prologue:Iam going to start this article with a true-life story. Two Parties had entered into a construction contract with no provision for a Punch List Procedure1.  The Employer’s lawyers attempted to make this good by writing a procedure for the Contractor’s review.  The Contractor’s lawyers added their own version side by side with the Employer’s.  The Employer did not entirely agree with the Contractor’s lawyer’s version and so produced another version set out side by side with the other two.  Perhaps unsurprisingly…

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Understanding Mediation: Two sides to every story The construction industry is often said to be confrontational and litigious. It is certainly a fertile breeding ground for disputes and these can arise from uncertainties in the inception, design, procurement and construction of projects. The cost of resolving such disputes could arguably be put to better use in the projects themselves, or improving margins which, of itself; might help reduce disputes. Unfortunately, the nature of construction means that the industry will probably never be entirely dispute free thus the next best thing is to try to minimise their impact. One way to…

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The Concept of Dispute Avoidance Disputes are costly. On average 50% of the legal costs borne by the construction industry are related to disputes and roughly 10% of projects 10% of the total costs were legal costs. If a dispute proceeds to international arbitration, under the ICC process a 10m dispute will cost about $300,000 in administrative and arbitrator’s fees alone and that takes no account of the parties’ legal and management costs and of course the hidden costs of lost reputations and goodwill. An ICC arbitration can typically cost as much as 12% of the value of the dispute.…

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Counting The Cost Litigation has always been expensive but the signs are that it is becoming increasingly so. A survey conducted by the US Chamber Institute for Legal Reform and others1 showed that costs were increasing at a faster rate than increases in hourly rates. In the UK cost budgeting introduced by the Jackson Reforms has made participants more aware of the need to control costs but it is too early to say whether this has reduced them2. Things are little better with international arbitration where both delay and costs appear to be rising3. The costs of litigation, and by…

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Everybody Has Won and All Must Have Prizes Adjudication has been hailed as a great success: it has certainly taken pressure off the courts and compared to litigation and arbitration it has provided, at least in theory, a quick and cheap way for the construction industry to have disputes resolved. But as adjudication has evolved it has attracted criticism for not being as quick and cheap as it was intended to be and for the problems that have sometimes occurred when the process has been used for large and complex disputes, or those not regarded as suitable for this method…

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“Putting Your Money Where Your Mouth Is” or “Practising What You Preach”: The Funding (or not) of Dispute Boards by the International Funding Banks FIDIC contracts are unique because they are the only international standard form suite of contracts to promote dispute avoidance. The vehicle for this is the Dispute Adjudication Board (DAB) and the first role of the DAB is to help the contracting parties avoid disputes, disputes which are inevitably costly in money, time and reputations. The international development banks have recognised it is highly worthwhile dealing with issues before they become fully blown disputes and the World…

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The Expert Witness in Adjudication When introduced in 1998, adjudication was intended to be a quick and cheap method of dispute resolution to help cash strapped contractors and subcontractors avoid insolvency. Since then, because domestic adjudication is the subject of a good deal of case law, the process has become increasingly legalistic and its popularity has led to more complex disputes being referred than was probably ever envisaged when the process was conceived by Latham. Adjudication is now used not only for straightforward disputes but for some that are technically complex and which often cannot be resolved within the prescribed…

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The Sun in a Box – The ITER Dispute Board The Structure of Dispute Boards A dispute board is a tribunal of experts that is independent, impartial, proactive and judicial. The real success of DBs is the way they can proactively assist the parties in avoiding disputes, saving the time and cost of arbitration or litigation and allowing the project to proceed in a collaborative manner. The standing DB, which is appointed at the commencement of the contract, does that by carrying out regular site visits and holding meetings to enable difficulties to be discussed or by proactively making enquiries…

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