M006 Conflict of interest

Standard form of contract deal with Conflict avoidance and DR
1. ICE, NEC & JCT have adopted adjudication
  1. effecive after incorporation of HGCRA Act 1996
  2. now statutory requirement of UK contracts
  3. decision in 28 days
2. difference between UK Adjudication and FIDIC adjudication
  1. UK requirement based on statue
  2. FIDIC is a contract based requirement
    1. FIDIC 1999 form of contract inc DAB (dispute Adjudication Boards) provision 1 or 3 members. its contractual and all parties to abide by decision
      1. DAB provision
        standing disputes board
        standing body and visits site reg.
        84 days 2 make a decision
        decision is final and binding if no notice of disatifaction if given
Hierachy of DR
1. 1. Negotiaiton
  1. 2. Mediation
    1. 3. Conciliation
      1. 4. Early neutral evaluation
        5. Expert determination
        6. Adjudication
        7. Arbritration/litigation
        arbitration: resolve disputes under control of the parties; conditions met e.g. idena genuine dispute, binding agreement 2 submit 2 arb in contract;
        Arbitration procedures:
        docs only - 30days
        short hearing - 30 days
        full hearing - long
        Difference between Arbitration & litiation
        Arbitration:
        governed by Arbitration Act 1996
        in order 2 arb u must have agreement from both parties
        parties have a degree of discretion as to they way proccedings r conducted
        similiar 2 litigation in sense of formal submission, expert evidence, hearing & decision by arbitrator
        3 types:
        Short hearing - 1 month
        Docs only - 1 month
        full procedure - long
        Advantages: private; parties have flex; arb awards easier 2 enforce
        Confidential/ private
        Litigation:
        presentation of argument in court
        public process - follow Civil Proceudure Rule
        Advantages: parties don't pay 4 judge/court, speedy & efficient, process can deal with multi parites, Civil Procedure rules = accessibility
        good 4 multi-party disputes
        Litigation: last resort 2 settle disputes by an action in court of law
        Advantages:
        3rd parties can join in on dispute
        legal aid avaliable
        less expensive than ARB
        decisive approach by judge
        Disadvantages:
        time consuming & unclear results
        Uk stat DR procedure; relitively quick from submission 2 referral; binding until dispute determined by litigation/arbritation
        enforcement in contracts by HGCRA 1996
        applies to all E/S/W contracts
        if there r no provisions for Adj in contract = Scheme 4 construction contracts applies
        its a stat right 2 have adj assuming the contract qualifies under the construction act. if not scheme 4 construction contracts applies
        resolution by qual. person exp in subject under dispute. they decide the outcome
        ADVANTAGES:
        Rapid
        binding
        cheap
        private
        court gives support to its outcomes/ rulings
        is a non binding assessment by a neutral professional. this could be used as a bias for settlement
      2. Similar 2 mediation; independant party 2 aid agreement; conciliator = no auth 2 seek evidence of call witness; coniliator = makes NO decisions.
        Difference between Mediation & conciliation:
        Mediation: brings parties 2gether & agree based on careful approach which best suits both parties
        conciliation: doesnt try to bring parties together and agrees through a 3rd party acting as a broker
    2. ADR - sep 3rd pty 2 mediate & guide a decision optimising parties needs; med encourages coming 2gether and agreeing
      1. Centre for effetive dispute resolution CEDR
        can provide 2 prj mediators 4 a mth retainer 2 a prj
        attend prj meetings 2 discuss progress - deal with any prb
        prj mediation w.shop is arranged prior 2 contract commencement - to resolve any conflict using CEDR model mediation procedure
  2. parties may through formal/informal process agree to settle the dipute either at high level or in detail & agree 2 b bound by this settlement
    1. Success of negotiation: both parties come away happy, costs agreed
2. 1 to 6 are ADR procedures
Conflict Avoidance
1. 2 methods
  1. management methods
    1. reduce risk through better planning e.g. ensuring contract docs are prepared properly & r clear and precise
    2. Project & business structures: e.g. partnering/ integrated project teams, using appropriate procurement methods; emp good value management
  2. non escalation methods
    1. resolving disputes b4 they escalate: e.g. structured negotiation, tired DR mechanisms in contrats
      1. using appropriate procurement practice
      2. sufficient preparation and tender planning
      3. complete design in all respects
      4. selection construction contracts e.g NEC/ECC
      5. contract docs clear and precise
      6. utilising project business structures which reduce risk of disputes e.g. partnering
      7. adopt good proj & commercial man practicies
      8. pre-contract reviews 2 avoid any issues
      9. periodical risk reviews
      10. tiered DR mechanisms in contrats
      11. use of dispute board and prj mediation
2. project CA
  1. client decide what he wants (time, cost, qual, early start)
  2. decide appropriate procurement route
  3. know the deal with MC - allowcation of risk
  4. put in writing all agreed terms & contract docs
  5. single pt of responsibility e.g. avoid dispute through bad comminucation
  6. ensure the client is always aware of scope/fee inc and costs through financial reporting
What is dispute resolution?
1. actions 2 resolve contractural disputes
Adjudication
1. not legally binding
2. adj forms an opinion based on evidence
3. parties may accept decision or may agreed to take dispute to a legally binding arbitration or commence litigation
4. referring party: give notice to all others 2 go 4 arbitration
5. fee for adjudication - paid by both parties
  1. "pay now, argue later" method adopted in Adj
6. Quick & cost effective
7. Advantages:
  1. Independent assessment
  2. quick decision
  3. binding for duration of contract wrks
  4. can b reassessed after completion of wrks
8. Disadvantages:
  1. Quick decision
  2. used as an ambushing tactic
  3. can b reassessed after wks complete
Adjudication vs Arbitration
1. Arbitration :
  1. consentual process
  2. no time limit
  3. legally binding
2. Adjudication:
  1. right by statute
  2. time is limited
  3. not legally binding
Arbitration
1. settlement of a dispute by an Arbitrator
2. Arbitrator decides the case and award
3. judgement can b incorporated in 2 decree or court
4. Decision = arb knowledge, evidence, enquiries 2
5. Arbitration Act 1996
  1. led to the drafting of 2 sets of rules
    1. CIMAR (con ind model arb rules 1996)
    2. ICE arb procedures 1997
6. Advantages:
  1. cheap
  2. Quick
  3. suitable 4 complex tech matters
  4. conveinient
  5. private
  6. commercially expedient
The Technology and Construction Court (TCC)
The 4 C's of ADR
1. Consensus (2 find a business solution)
2. Continuity (solution 4 on going business relationship
3. Control (ability 2 tailor a solution geared 4 a business result)
4. Confidentiality (avoid harmful revelations 2 the public

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M006 Conflict of interest

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