Construction Law – ADR, Adjudication, Mediation, Arbitration, Expert Determination
What does ADR stand for? Essentially Alternative Dispute Resolution such as adjudication, mediation, expert determination, arbitration.
The method of resolving disputes by Adjudication is not novel although the Housing, Grants, Construction and Regeneration Act placed the right to adjudicate construction related disputes on a statutory footing. Matthew Dillon has been involved in Construction Adjudication since the year 2000 when he commenced employment as an in-house solicitor for Jarvis plc.
Adjudication enables clients to secure an enforceable judgment within a matter of weeks and the courts will only decline summary judgment in limited circumstances. Although the successful party within an Adjudication usually recovers the costs of the Adjudicator, he will not, unless the other side consents, be entitled to recover the costs of representation. It is therefore vital that costs remain proportionate to the sums at stake.
Since setting up MJD in July 2010, Matthew Dillon has acted for Referring Parties and Respondents on countless adjudications varying from straight forward “smash and grab” adjudications to complex lost profit and final account claims following repudiatory breaches of contract.
It is perhaps a testament to our expertise that we very rarely see unexpected outcomes in our adjudication work. Very rarely are the decisions we secure challenged in the High Court (Technology and Construction Division) and in fact MJD has never had a decision not enforced. Quite frankly getting adjudication wrong can be expensive and although wayward adjudicator’s cannot be entirely eliminated, securing a decision that is not enforceable is, in our opinion, a failure.
We are not supporters of mediation.
Although we have achieved favourable outcomes for our clients within mediation, generally we do not favour mediation and consider it to be an expensive waste of time and money. In order to avoid potential adverse cost orders, it is however important that mediation is not dismissed out of hand.
Mediation is actively encouraged by the civil procedural rules and the judiciary. There is a body of case law that says a refusal to mediate may be unreasonable and can result in costs being awarded against a party who refuses to mediate. There is a misconception in our opinion as to both the merits and costs associated with mediation. The staring fee for most mediators of any worth is around £2,000 per day plus vat; add on the costs of your legal advisors attending and preparing for the mediation and the costs can be substantial.
The starting point in any mediation is that the Defendant is going to make a payment to the Claimant. The focus of the mediation will therefore very quickly turn to how much the Defendant is willing to pay. Mediation requires both parties to compromise. It requires the Claimant to accept less than what it considers its claim is worth. It requires the Defendant to make a payment that it may think is not due or to make a payment in excess of what is considers is due.
Compromise is not always a bad thing, but should not your lawyer be able to secure a compromise without the input of a mediator? If the lawyer representing one party is weak, inexperienced or misinformed then there will be barriers to settlement but in our opinion such barriers exist regardless of whether settlement negotiations are conducted withing or outside mediation.
If a dispute is really about just about quantum then a mediation may be a sensible option.
Before embarking on a mediation it is vital to understand the reasons for the mediation and the ultimate aim. A Claimant may be eager to mediate because it has no real intent expending resource on litigation or it may want an exist from the litigation that it has commenced. A Defendant may be using mediation as a stalling tactic or simply paying lip service to the need to show willingness to settle; the Defendant may be using the mediation process as a tool in the litigation process and have no desire to compromise.
Matthew Dillon has represented both Claimants and Defendants in mediations ranging in value from £20,000 to in excess of £4 million. Matthew has participated in multi-party complex mediations when his opponents have been represented by top flight law firms and the mediator has been Queens Counsel. Matthew has used the mediation process to secure his claimant clients awards in excess of forecast recoveries and to settle his defendant clients exposures cheaply or at nil cost.
Matthew considers mediation to be one tool withing the litigators armoury. If compromise is possible then it should be possible outside of mediation and Matthew has the experience, confidence and knowledge to attend meetings and endeavour to secure settlement regardless of the opponent. However if mediation is necessary then Matthew is well placed to advise and represent his clients so to secure the optimum outcome.
Expert Determination is a form of Alternative Dispute Resolution. It is a confidential and binding process for settling a technical issue or dispute.
There are no hard and fast rules in Expert Determination. Parties are free to agree whatever processes and rules they wish.
Expert Determination is particularly useful when the parties require a specialist view on a subject matter and are prepared to be bound by the decision of the Expert. It is usual for the decision to be finally binding. Expert Determination can provide a fast and cost effective means of determining technical issues where there are no substantial disputes of fact.
Expert Determination is also beneficial where parties need to maintain an on-going relationship which is often soured by the use of litigation or arbitration.
Arbitration remains a popular forum for resolving disputes where a degree of confidentiality is required or where it is considered beneficial for the Arbiter to have technical expertise. It remains common practice for construction contracts to provide that disputes must be resolved by way of arbitration as opposed to litigation, and in the event that a party erroneously issues court proceedings then an application to stay the court proceedings can be made.
MJD Solicitors have experience of Adjudication and all types of Alternative Dispute Resolution.
Matthew Dillon, the Principal of MJD Solicitors in Brentwood has acted for Employers, Contractors and Subcontractors on a range of adjudications and mediations ranging in value from £15,000 to £4 million. Matthew works with clients in Essex, London, Hertfordshire and Kent and can be contacted here.
Call 01277 280760 today for effective help and advice.