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If there has been a breach of contract or there is a negligence issue in construction proceedings (i.e. professional negligence) then the innocent party will normally wish to commence proceedings to obtain a remedy for any loss they have suffered as a result. There are three main means through which construction disputes can be resolved;

  1. Mediation 
  2. Arbitration
  3. Litigation

The first thing to consider are the terms of any written contract and in particular the dispute resolution clause.  This generally sets out how disputes will be resolved.  Most construction contracts contain such a clause but in the absence of one all options are open to the parties to choose which method they deem most suitable in the circumstances. 

It is worth noting however that if an “arbitration clause” exists and one party attempts to issue proceedings in Court rather than resort to arbitration the other party can make an application to delay the claim so that arbitration can take place. Under s.9 of the Arbitration Act 1996 the Court must stay the process if it is satisfied that there is such an “arbitration clause” (if specific circumstances do not exist that prevent the matter being stayed). 

Mediation

Mediation is an alternative way to resolve disputes and is particularly helpful in minimising the legal costs incurred by both parties and any publicity as it is an entirely private matter.  A mediator assists the parties to negotiate their way to a mutually agreed settlement. The mediator has no authority to impose one and will not make any decision that the parties are expected to abide by. Neither will the mediator give any opinion on the rights of any of the party’s involved.

This process is encouraged by the courts and it is not unknown for the courts to rule that any party that refused to try mediation behaved unreasonably, and can make a judgement against such parties based on that ruling.

The written agreement which sets out the terms of any settlement agreed in the mediation process is the enforceable by the courts and breaches of that settlement can create a further claim for damages. As a result it is often wise to have legal representation at the hearing.

Arbitration

Arbitration can also offer a cheaper way of resolving a legal dispute, for example in a short informal process without a formal hearing. However, if the matter is complex then it can potentially be far more expensive than the court process as the parties must pay for the arbitrator’s time and hiring the venue., for example in a short informal process without a formal hearing. However, if the matter is complex then it can potentially be far more expensive than the court process as the parties must pay for the arbitrator’s time and hiring the venue.

The benefits of Arbitration are;

An independent Arbitrator makes the decision at conclusion of the proceedings
The proceedings are private
Expert witnesses can be called
It should be less time consuming and is more flexible
The decision is legally binding
It is less confrontational than court proceedings

One of the disadvantages of the arbitration is that if the arbitrator finds against you the decision is final and binding. There are limited rights of review and appeal of arbitration awards. As arbitration is more formal than mediation, it is almost always advisable to have a lawyer representing you in the proceedings.

Litigation

Litigation is often a very expensive process.   There are legal fees, court fees, and expert witness to pay as well as the costs of the trial.

Court proceedings are also much more time-consuming and getting a case to trial can take years if the issues are complex.   The court procedures are very rigid and failure to comply with them can result in the case being thrown out on a technicality.  However, the Judges hearing these cases often sit in specialist Commercial or Construction Courts and they are very experienced in getting to the issues in dispute quickly.  

Conclusion

The courts recognise that construction disputes are well served by the parties attempting to resolve them through Mediation or indeed Arbitration where the contract provides for this.  Whilst all options should be explored it is important that you seek legal advice as to the best course for you.

 

Please NoteThis document is for general information only. It is not legal advice and should not be acted or relied on as being so. It does not create a solicitor-client relationship between Temple Legal Solutions Ltd and any other person. Legal advice should be taken before applying any information in this document to any facts and circumstance. 

If you contact Temple Legal Solutions or call 01483 514814 to make an initial enquiry, you will then referred to an appropriate, experienced law firm.