Professional
Bad feelings, good
outcomes by Kay Hill
Everyone hopes a project will go smoothly, concluding with a satisfi ed client and a paid invoice. But what do you do when things go wrong? Kay Hill looks at dispute resolution
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A PROJECT GONE wrong used to be a case of ‘see you in court’. But the modern trend for ADR – alternative dispute resolution – means going before a judge now tends to be the last resort, with an array of experts, arbitrators, adjudicators, and mediators eager to help you resolve the problem. Indeed, for architects the ARB Code of Conduct encourages alternative dispute resolution to be built into any contract. “Anyone who is party to a construction contract, including architects under their appointment contracts, ca n’t avoid adjudication, although they can usually opt out of arbitration and many people do,” says RIBA adjudicator and architect Kathy Gal. More informal methods of ADR can seem appealing, as they are generally less expensive and may seem less daunting, but Gal offers a word of warning. “ADR can be time- and energy-consuming, and, as many forms of ADR are not binding processes, the effort can be wasted if there isn’t a resolution. Also, less honourable parties might use it to fl ush out the state of play of somebody’s argument with them. You put your cards on the table and then the other party walks away with that knowledge. But it can be a good approach to try to avoid more formal action,” she says.
“Adjudication is a very quick process - 28 days is the normal length of time from start to fi nish, and it’s a temporarily binding process – what the adjudicator says, you have to do. If people don’t pay, you can ask a court to enforce payments, in which case a judge generally won’t unpick the case or look behind the decision, provided the adjudicator has answered the right questions.” Where people can go wrong, Gal says, is that if they think they are owed £10,000 they ask the adjudicator to rule on that alone. This means that if, on balance, the adjudicator fi nds they are only actually owed £8,000, the adjudicator will have to refuse it and the creative will come away with nothing. “If you ask for ‘£10,000 or another sum that the adjudicator thinks appropriate’ instead, there are more options for the result,” she says. “The adjudicator is there to determine the facts and the law that applies to these. But provided the adjudicator acts within the rules governing the process, there is tremendous latitude as to how an adjudication process unfolds. Some adjudications can be conducted by email alone, others require meetings, site visits, and possibly even the appointment of additional technical expertise. The adjudicator will also decide on how their own fees are to be paid.
Generally, the ‘losing party’ pays, but the fees can be apportioned between the parties. “ Prevention is better than cure advises Gilly Craft, newly elected president of the BIID. “People usually get into disputes when their paperwork is not good enough. It’s best to use BIID or RIBA contracts that have been written by lawyers who know about this market,” she warns. The BIID contract suggests that negotiation and mediation can be used, but either party can choose to refer the matter to adjudication or litigation. “I would recommend mediation fi rst rather than running to the courts; there are a lot of good mediators out there,” adds Craft. “I’ve noticed that, when disputes happen, it’s often about ‘he said/she said’,” she says. “So, to protect yourself, make sure everything is written down and you can prove what has been said. Keep an email trail, make meeting notes every time, and take a note of every phone conversation. And always be 100% transparent, especially about pricing.”
Third Party Opinion
As a relatively new alternative, this involves both parties appointing a professional to give an opinion and recommendation for a settlement. It is particularly useful where technical matters are being disputed, as
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