Trends in construction dispute resolution
10% of the UK’s gross national product is accounted for by construction activity, meaning there is a lot of dispute resolution and it comes in a wide variety of flavours. 35 years ago ‘alternative dispute resolution’ did not exists (Gaitskell states 27 years, but paper was done in 2005…), and the phrase ‘dispute resolution’ was rarely used. The only forms of dispute resolution regularly employed were court litigation and arbitration. On isolated occasions there might be an expert determination. These are all final determinations, subject only to appeals in confined circumstances.
In the last 10/18 years a range of new dispute resolution procedures has become available particularly in the construction industry. These new procedures are generally not finally determination in the same way that litigation, arbitration or expert determination is. They are mainly processes parties can use if they choose, in order to avoid final determination by a court, arbitrator or expert.
These new procedures have been adopted widely in the UK and abroad, because they offer parties the possibility of controlling and reducing the particular hazards associated with the determination procedures; namely cost, time and uncertainty of outcome.
The seven types of dispute resolution in this paper naturally divide themselves into two categories.
Final Determination Procedures
- Court Litigation
Preliminary Determination Procedures
- Early neutral evaluation
- Dispute boards/panels
Final Determination Procedures
For the purpose of construction disputes ‘court litigation’ means trials in what was known as the Official ...
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... any incipient disputes. This generally avoids a dispute turning into arbitration.
The decision made is only temporarily binding, and can be disputed by a party, which will then have to go to court of arbitration. However dispute boards have good records, some 97% of disputes referred never go to arbitration or litigation. Use of dispute boards started in the US during the 1970s, and was adopted by the International Federation of Consulting Engineers (FIDIC) in the mid 1990’s. ICE published it’s dispute board rules in 2005, and its use looks set to expand further.
Broadly the number of construction arbitrations and court cases has reduced, by about a third in recent years as a result of the combined effects of the CPR on court litigation, adjudication and mediation. This is mainly driven by the obvious attractions of relatively low costs and high speed.
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