Managing Disputes Effectively
- November 6, 2023
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This month’s article has a rather broad title! ‘Managing disputes’ can cover a multitude of sins, but we’ll stick to construction and see how we get on.
What is a Dispute?
So you have a construction project which you think might not be going as smoothly as planned. Nine times out of ten you’ll be able to negotiate minor issues as they go along. Normally you’d be able to negotiate even some of the bigger issues in the final account agreement. However, it would be better to “head these off at the pass” as it were, and discuss them as they arise.
Avoidance and negotiation is undoubtedly the best solution. Formal disputes can be costly. Even the smallest of projects can quickly spiral out of control if disputes are left unchecked. In extreme cases, disputes can cost many millions or even hundreds of millions.
What if you can’t agree? Do you have a dispute?
Black’s legal dictionary describes a dispute as, “a conflict or controversy, esp. one that has given rise to a particular lawsuit”.
It’s perhaps helpful to note that people often refer to a claim and a dispute in separate terms with a claim being simply a contractual entitlement that you put to the employer (or relevant party to the contract) for agreement. Then a dispute, therefore, appears to be an issue that cannot be resolved through the contractual mechanisms available. As a result, it may require third-party input. As mentioned in our other articles, there are many different ways to resolve a dispute.
What is Dispute Management?
As you might expect, it’s pretty much what it says on the tin. You will find that, like most things in life, there is a process to be followed for the resolution of a dispute. That process will differ, depending upon how you choose to resolve the dispute and many other factors.
To avoid falling foul of a technicality, you’ll need good advice and support throughout the process. A specialist advisor can help ensure you take the right decisions and get the right advice to take you through what can be a complex process.
Just as a good project manager is important in construction, efficient dispute management is necessary. It can also help you resolve issues with the minimum disruption to your business.
Check the Contract
There are far too many considerations to include in a short article like this, but as always, the starting point will be your contract. There may well be a clause or number of clauses that advise you on how to tackle your dispute. You may have a tiered system – which might include mediation, adjudication, arbitration or any number of steps.
There may be dispute avoidance procedures in the contract, or other mechanisms. Be sure to check them, because failure to do so will likely place you in breach of the terms of the contract.
Depending on the contract, you may need a different strategic approach.
Dispute practitioners such as Overford can set out your options and discuss the pros and cons of each. We would advocate where necessary that legal advice, usually from a qualified solicitor, will help you ensure you get the processes correct. This is particularly important with the more onerous procedures.
When going to court, it’s important to prepare submissions and documents carefully. This helps avoid breaking any rules or procedural requirements. If engaging consultants to help, they will also need to understand their role in the process.
Above all, following the correct processes should minimise costs. This includes both your time and the time billed by legal advisors. Having someone on your side to manage the dispute resolution process is crucial for avoiding pitfalls and achieving your goals.
And as always, do get in touch if we can help at all.