Table Of ContentConstruction Dispute
Resolution Handbook
Construction Dispute Resolution Handbook
Construction Dispute Resolution Handbook
Construction
Dispute Resolution
Handbook
Engineers’ Dispute Resolution Handbook
Second edition
By a specialist team of authors in
Keating Chambers
Edited by
Dr Robert Gaitskell QC CEng
Construction Dispute Resolution Handbook
PublishedbyICEPublishing,40MarshWall,LondonE149TP.
DistributorsforICEPublishingbooksare
USA:PublishersStorageandShippingCorp.,46DevelopmentRoad,
Fitchburg,MA01420
Firsteditionpublished2006
Thisedition2011
AlsoavailablefromICEPublishing
ICEManualofConstructionLaw.
V.Ramsey,J.Baster,A.MinogueandM.P.O’Reilly(eds).
ISBN978-0-7277-4087-8
ClientBestPracticeGuide.
InstitutionofCivilEngineersBestPracticePanel.
ISBN978-0-7277-3650-5
DisputeBoards:Procedureandpractice.
G.OwenandB.Totterdill.ISBN978-0-7277-3508-9
www.icevirtuallibrary.com
AcataloguerecordforthisbookisavailablefromtheBritishLibrary
ISBN:978-0-7277-4145-5
#ThomasTelfordLimited2011
ICEPublishingisadivisionofThomasTelfordLtd,awholly-owned
subsidiaryoftheInstitutionofCivilEngineers(ICE).
Allrights,includingtranslation,reserved.Exceptaspermittedbythe
Copyright,DesignsandPatentsAct1988,nopartofthispublication
maybereproduced,storedinaretrievalsystemortransmittedinany
formorbyanymeans,electronic,mechanical,photocopyingor
otherwise,withoutthepriorwrittenpermissionofthePublisher,ICE
Publishing,40MarshWall,LondonE149TP.
Thisbookispublishedontheunderstandingthattheauthorissolely
responsibleforthestatementsmadeandopinionsexpressedinit
andthatitspublicationdoesnotnecessarilyimplythatsuch
statementsand/oropinionsareorreflecttheviewsoropinionsofthe
publishers.Whilsteveryefforthasbeenmadetoensurethatthe
statementsmadeandtheopinionsexpressedinthispublication
provideasafeandaccurateguide,noliabilityorresponsibilitycanbe
acceptedinthisrespectbytheauthororpublishers.
TypesetbyAcademicþTechnical,Bristol
PrintedandboundinGreatBritainbyCPIAntonyRoweLimited,
ChippenhamandEastbourne
Construction Dispute Resolution Handbook
Contents Forewordtothesecondedition ix
Forewordtothefirstedition xi
Listofcontributors xv
01 ................................. Introduction 1
RobertGaitskell
1.1. Thesecondedition 1
1.2. Overviewoftheformsofdisputeresolution 3
1.3. Thesevenformsofdisputeresolution 3
1.4. Planyourstrategy 6
02 ................................. Avoidingdisputes 7
GaynorChambers
2.1. Introduction 7
2.2. Contractualmeansofavoidingdisputes 7
2.3. Effectivecontractmanagement 15
03 ................................. Whendisputesarise 17
PaulBuckingham,SamuelTownendandKristaLee
3.1. Overview 17
3.2. Initiatingaclaim:choosingthedisputeprocedure 18
3.3. Defendingaclaim 20
3.4. Instructinglawyers 22
3.5. Directaccessschemes 24
04 ................................. Litigation 29
FinolaO’Farrell
4.1. Introduction 29
4.2. TheTCCsystem 29
4.3. Pre-actionprotocols 30
4.4. Commencementofproceedings 33
4.5. Casemanagement 44
4.6. Alternativedisputeresolution 44
4.7. Defaultjudgment 45
4.8. Summaryjudgment 47
4.9. Interimpayment 48
4.10. Interiminjunction 49
4.11. Disclosure 50
4.12. Witnessstatements 51
4.13. Expertreports 52
4.14. Pre-trialreview 53
4.15. Trial 54
4.16. Costs 54
4.17. Appeals 57
05 ................................. Arbitration 59
PaulBuckingham
5.1. Whatisarbitration? 59
5.2. Advantagesofarbitration 60
5.3. Disadvantagesofarbitration 61
5.4. Thearbitrationclause 61
v
Construction Dispute Resolution Handbook
5.5. Commencinganarbitration 63
5.6. Multi-partyclaims 65
5.7. Choosinganarbitrationtribunal 66
5.8. Conductinganarbitration 66
5.9. Thearbitrationhearing 69
5.10. Thearbitrationaward 71
5.11. Costs 72
5.12. Challengingarbitrationawards 73
5.13. Summary 74
06 ................................. Adjudication 75
SamuelTownend
6.1. Introduction 75
6.2. TheConstructionActandtheScheme 75
6.3. Applicationofstatutoryadjudication 76
6.4. Thetechnicaluseofadjudication 79
6.5. Constructionconsultant’sfees 82
6.6. Rulesofadjudication 83
6.7. Theadjudicationnotice 83
6.8. Appointmentofanadjudicator 86
6.9. Thereferralnotice 87
6.10. Respondingtoadjudicationproceedings 89
6.11. Substantivecontentsofaresponse 92
6.12. Subsequentprocedures 92
6.13. Thedecision 93
6.14. Enforcement 93
07 ................................. Mediation 97
RobertEvans
7.1. Whatismediation? 97
7.2. Whymediationworks 98
7.3. Facilitativeandevaluativemediation 100
7.4. Whentousemediation 101
7.5. Appointingamediator:CEDRandotherbodies 102
7.6. Themediation 102
08 ................................. Expertdetermination 115
JonathanLee
8.1. Introduction 115
8.2. Expertdeterminationversusotherdispute
resolutionprocesses 117
8.3. Thequestionorquestionstobereferredto
theexpert 121
8.4. Theparties’agreementtoreferaquestionto
anexpert 122
8.5. Thetermsoftheexpert’sappointment 124
8.6. Enforcingorchallengingtheprocessorthe
decision 125
09 ................................. Earlyneutralevaluation 133
RichardCoplin
9.1. Introduction 133
vi
Construction Dispute Resolution Handbook
9.2. KeyfeaturesofENE 134
9.3. TheaimofENE 134
9.4. Whatdoesanevaluatordo? 134
9.5. WhentouseENE 135
9.6. Appointinganevaluator 135
9.7. Preparationfortheevaluation 136
9.8. Theevaluationdecision/recommendation 137
9.9. Summary 137
10 ................................. Internationaldisputeresolution 139
RobertGaitskell
10.1. Introduction 139
10.2. Choosingthedisputeresolutionprocedure 140
10.3. Arbitration 140
10.4. Adjudicationanddisputeboards 149
10.5. Mediationandearlyneutralevaluation 153
10.6. Expertdetermination 154
10.7. Conclusion 154
11 ................................. Immediatehelp 159
KristaLee
11.1. Courtsystem 159
11.2. Precedent 160
11.3. Lawreporting 161
11.4. Referencesources 162
12 ................................. Conclusion 165
RobertGaitskell
Index 167
vii
Construction Dispute Resolution Handbook
Construction Dispute Resolution Handbook
Foreword to ThesuccessoftheFirstEditionofthiswork,Engineers’Dispute
ResolutionHandbook,isnotasurprise.Thebookcoversthe
the second completespectrumofdisputeresolutionexpertiserequiredby
engineersandotherprofessionalsinvolvedinsubstantial
edition constructionprojects,whichisotherwiseavailableonlyin
separateandunconnectedtexts.AspointedoutintheForeword
totheFirstEdition,thechallengeisnotsimplytheeffectiveuse
ofonedisputeresolutionprocedure,butmakingeffectiveuseof
thewholerangeofproceduresavailable.
Thebasicproceduresavailablenownumberatleastsix,allof
whicharewellcoveredinthiswork.Butitwillbefoundthat
partiesarequitecapableof‘inventing’otherprocedureswith
newnameswhich,however,invariablyturnouttobeoneofthe
existingsystems,orperhapsacombinationofthese,repackaged
fortheparticularneedsofthecase.Anexampleofthisisa
‘conciliation’procedureintroducedintoanumberofhighvalue
contractsinTaiwanwhichrequireddisputestobeconciliatedby
apanel;butifthepartiesdidnotreachsettlement,thepanelwas
toissueadecisionwhichwascontractuallybindinguntilafinal
decisionbyacourtorarbitrator,followingtheUKadjudication
model.Themoralisthatthattheprinciplesremainthesame,
whateverthelabel.
Indecidinghowparticulardisputesshouldberesolved,the
choicesfacingthepartiesare:(1)aninitialchoicebetweenstate
courtorprivatedisputeresolution;andifthelatter,(2)achoice
betweenproceduressupportedbycourtpowerssuchas
arbitrationoradjudicationandadhocproceduressuchas
mediation,expertdeterminationandearlyneutralevaluation
(ENE);andthen(3)achoiceastotheextenttowhichadecision
orresultistobebinding.Itisperhapsthislastelementthatcan
surprisethenon-lawyer,asitisthejudgmentoftheHighCourt
thatismostlikelytobereversedonappeal;and,conversely,the
relativelyinformaldecisioninanexpertdeterminationisleast
likelytobeopentochallengeinanyforum.Andalthough
adjudicationis,intheory,bindingonlyuntilthedisputeis‘finally
determined’inanothertribunal,therealityisthatadjudicationis
aboutcashflowand,dependingonyoursourceofstatistics,
somethingwellinexcessof90%ofadjudicationdecisionsare
notchallengedfurther.Attheotherendofthescale,mediation
andENEcreatenobindingresultunlessthepartiesenterintoa
bindingcontractualsettlementasaresult.Evenherethecourts
arebeginningtoentertainlimitedchallenges,buttheprocesses
themselvesremainrelativelyriskfree.
Onemightaskwhyalltheseproceduresareneededandwhy
couldwenotreturntotheolddayswhentheengineerwasking
(seeForewordtotheFirstEdition).Oneansweristhatthe
worldinevitablymovesforwardandlawyersandcontract
draftsmenwillbedraggedalongwiththerestofhumanity.
ix
Construction Dispute Resolution Handbook
Anotheransweristhatcontracts,andthereforethedisputesthat
theygenerate,arevastlymorecomplextodaythanatanytimein
thepast,andcallforacorrespondingspreadofremediessuchas
thosedescribedinthiswork.Anothersignificantnewfacetof
moderndisputeresolutiontechniquesisthattheyareinfinitely
moreavailablethanatanytimeinthepast.Amere20yearsago
theonlyremedyavailabletoacontractorunderanInstitutionof
CivilEngineers(ICE)FormofContractwhowasdissatisfied
withtheengineer’scertificationwastoreferthematterbackto
the(same)engineerwhowasthengiventhreemonthsto
reconsiderand,ifhethoughtfit,toaffirmhisoriginaldecision.
Comparethistothecurrentavailabilityofadjudication‘atany
time’or,ifpreferred,arbitrationoranyotheragreedmethodof
resolution,alsoatanytime.However,itmaybethatthis
abundanceofavailabilitynowcarrieswithitthedangerthat
partiesmaybeprecipitatedintoaformaldisputeresolution
processearlierthanisnecessary,andbeforestepshavebeen
takenthatmightreduceorevenavoidthedispute.Hencethe
importanceofdisputeavoidance(aphrasethatwouldnothave
beenunderstoodinthepast)andthesystematicconsiderationof
thestepstobetakenwhenapotentialdisputelooms.Boththese
subjectsarewellcoveredinthisbook.
Whilethebasicprinciplesremainunaltered,thiseditionhas
updatedthelawandpracticeinanumberofrespects,whichare
reviewedinChapter1.Thebookhasrightlyattractedawide
following,andwillbecomeoneofthestandardpiecesof
equipmentneededbythosewhosebusinessitistosee
engineeringdisputesproperlyresolved.
ProfessorJohnUffCBEQCFREng
KeatingChambers,London
EmeritusProfessorofEngineeringLaw,King’sCollegeLondon
x
Construction Dispute Resolution Handbook
