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© 2019 by Palm Commercial Services Ltd, 4 Royal Meadow Way, Sutton Coldfield, West Midlands. B74 2FE.  United Kingdom.

Adjudication
Negotiation

Negotiation is the preferred way to settle disputes. The cost can be

low, the process is simple and it should definitely be quicker than

using litigation or other types of ADR. Both parties remain in control of

the problem and are not reliant on third party opinion. It could be the

case, however, that a stronger party can push a weaker party into

accepting a decision.

 

Negotiation is only appropriate and likely to be successful if the parties

want it to succeed.

Adjudication was recommended as the process to be used for all

construction contract disputes in the Latham Report.39 Adjudication is

gaining popularity internationally. It is the most widely used form of

dispute resolution in the United Kingdom construction industry. The

Housing Grants, Construction and Regeneration Act 1996 (‘HGCRA

96’)40 was introduced to aid confidence of payment in construction

contracts. The Construction Act introduced a quick, easy and cheap

provisional answer to disputes. Adjudication can also be utilised after a

contract has been determined.

 

Lord Denning famously stated in Gilbert-Ash (Northern) Ltd v Modern

Engineering (Bristol) Ltd, ‘There must be a cash flow in the building

trade. It is the life blood of the enterprise’. Adjudication has been an

outstanding success in redressing the balance of power between the

payer and payee since it provides a quick, easy and cheap solution for

disputes.

Dispute resolution boards are often used on large, multinational

projects. They act to solve disputes throughout the construction

project as and when they occur. They can act quickly since they are

appointed at the start of a project (the team is usually specified in the

contract documentation) and can work with the parties to maintain

relationships.

 

Dispute Review Boards received major attention and support in

international construction in 1995 when the World Bank, the largest

financing agency in the world, adopted a certain dispute resolution

procedure provision. The first edition of standard bidding documents

for the procurement of civil engineering works insisted on the use of a

Dispute Review Board to resolve disputes between the employer and

contractor.

 

This method can enhance both parties behaviour and encourage an

employer to address claims seriously and deter a contractor from

pursuing spurious claims which will never succeed.

 

The FIDIC forms of contract contain a Dispute Adjudication Board

procedure which enables a decision to be enforceable in recognised

jurisdictions.

 

The use of Arbitration in England is claimed to be as old as legal

history. It has certainly been recognised in common law since the start

of the seventeenth century. The first statute governing arbitration was

the Arbitration Act 1697 and there have been several enactments since.

This process is currently regulated in the UK by the Arbitration

Act 1996.

 

Arbitration is to a dispute resolution mechanism whose outcome is

legally binding and the decision is enforceable with res judicata effect

(once a dispute has been decided upon, the same parties cannot

attempt to raise the issue again by or during further proceedings).

Only litigation has such universal enforceability.

 

Both parties can choose their arbitrator based on previous expertise.

The process is confidential between the parties and the arbitrator.

Arbitration is flexible and the hearing can be held anywhere at any

chosen time. Provided that the award is made in accordance with the

relevant statute, it can be enforced in the same manner as a

judgement.

 

There are several processes to arbitration and therefore takes longer

than other available mechanisms.

 

Arbitration, along with litigation, can be the most expensive method of

resolving a dispute.

Dispute review boards
Arbitration

Dispute Management

 

Palm has extensive experience with managing disputes. Although Palm prefers to avoid disputes, in the unfortunate event that a dispute has arose on your contract, Palm can ensure that the dispute is managed in accordance with the contract or as required under any local laws. Palm summarises below some of the dispute resolution methods often used.

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