The process whereby the parties work out between them how to resolve any issues that have arisen. Power to settle the dispute rests with the parties.
Involves the use of a neutral third-party who facilitates a negotiation to resolve a dispute. Details of the process to be followed are usually set out in an agreement to mediate which is agreed to by the parties beforehand. Mediations can be face to face or on the telephone and tend to involve both separate meetings between the mediator and the parties and joint meetings where all are present.
This is generally accepted to involve a neutral third-party taking an active role in putting forward suggestions for settlement or an opinion on the case. The conciliator might facilitate a negotiation between parties where possible on their own terms or suggest a potential resolution if the parties cannot agree.
The neutral evaluator provides an opinion at an early stage on the likely outcome of a case if it were to be litigated. The evaluator seeks to bring the parties together and assist them in finding an agreement by common consent. This provides more insight into the strengths and weaknesses of the dispute and helps the parties identify areas of agreement and focus the issues that remain for resolution.
Arbitration involves an independent third-party (the arbitrator) reaching an independent decision on a dispute. The process of arbitration can vary depending on circumstances, but must be agreed in advance in an arbitration agreement. Some arbitrations may involve hearings similar to those used in a court trial, while others will involve only written submissions. In most cases the arbitrator’s decision is legally binding on both sides.
Under section 108 of the Housing Grants, Construction and Regeneration Act 1996 (HGRCA) was introduced in May 1998. It has been widely used in the construction industry and applies not only to building contracts but also to professional appointments. If the Act applies to a contract, then either party may request the appointment of an adjudicator to be made within seven days of servicing a Notice of Dispute, and the adjudicator has 28 days from issue of the Referral within which to issue a decision. That decision will bind the parties and in most cases be readily enforceable in the Technology and Construction Court (TCC). The TCC is the part of the High Court that deals with construction related litigation.
This involves the use of an independent expert to resolve a dispute. There are several forms of expert determination: an independent expert can be appointed to reach a binding decision; an independent expert can be appointed to provide expert advice to an adjudicator who is charged with reaching a decision on the dispute; or the parties may each commission independent expert reports to provide to the adjudicator.
Dispute boards sit somewhere between avoidance and dispute resolution. Their genesis is in Dispute Review or Recommendation Boards. Three dispute board members are appointed at the start of a project. They become familiar with the project by reviewing some of the project documentation and also regularly visiting the site during the course of the works. If issues arise they can be asked for their non-binding recommendation. This may be related to general disagreements or disputes. Often their recommendations are used to resolve disputes between the parties, thus avoiding formal disputes. Dispute review boards began in the US construction industry and have spread into the international construction industry.
