This article considers the benefits of retaining professional construction (claims) consultants to represent parties in non-litigation forms of dispute resolution. Specifically, it considers whether representation by professional consultants might improve the effectiveness, speed and cost of dispute resolution.

Professional construction consultants are often the first to be retained by a party to a dispute. They develop and analyze the issues and make reasoned and informed opinions. This often involves extensive document inspection, technical analysis and contract review. Frequently the consultant’s work is sufficient to facilitate negotiation and settlement. Sometimes it is not. If the dispute heads to court the client must retain an attorney.

If it moves to ADR (Alternative Dispute Resolution), the client may use an attorney or the consultant to represent him/her. In the UK, where adjudication is now the leading form of dispute resolution it is common to retain a construction consultant for formal dispute resolution. In the USA it is the exception.

In this article, I propose that the most appropriate person to represent a party in ADR is simply "the best qualified person", by which I mean the person with the best skills for the particular situation, and not simply one with a specific label. Indeed, this is one of the positive advantages of ADR; the parties, and not the method of dispute resolution, retain the right to make that determination.

The article poses a few fundamental questions and concludes with the opportunity to express your opinions in an on-line survey, the results from which will be presented in a follow-up article in October.

Construction Dispute Resolution

Construction disputes are resolved formally by:

a) litigation in a court of law

b) one of many forms of alternative dispute resolution (ADR), i.e. Arbitration; Dispute Review Board, Court of Contract Appeals (Army Corps of Engineers); Contract Review Board (various state agencies); Dispute Review Boards; Mediation.

A construction contract will normally specify the method of dispute resolution; if it does not then the only recourse (without additional agreement) is litigation. It is therefore very important to consider contract provisions for dispute resolution and parties should solicit professional advice if they are uncertain.

Only a qualified attorney may represent a party in court. However, with ADR, a party need not be represented by an attorney in the lead role. Instead, ADR typically provides that the parties may be represented by a person of their choosing, this would include a professional construction consultant.

Merchants for centuries preferred arbitration over litigation so that they could retain persons experienced and qualified in their trade. It was of paramount importance to the merchants to retain control of and preserve the standards, customs and practice of their trade. Having disputes prosecuted by and heard by one’s peers is a central tenet of ADR.

The question I pose then is: Why are parties reluctant to consider retaining a professional construction consultant to represent them in ADR and instead, seemingly automatically, retain an attorney?

Best Qualified Representative

Construction dispute resolution is a complex process involving not only the subject matter area, but also the areas of law, anthropology, sociology and psychology, to name but a few. It requires a wide range of skills of which knowledge of law is but one.

Putting aside, the "non-technical" skills necessary (assuming for now they are attainable equally by all would-be representatives) the principal knowledge and skills needed to successfully represent a client in ADR are:

• Subject matter expertise
• Knowledge of construction/contract law
• Advocacy skills
• Negotiation skills

Subject matter expertise sits at the center of any dispute and, for many forms of ADR, is historically the quintessential prerequisite for representing a party in a construction dispute. Without subject matter, there can be no dispute. Subject matter expertise is what defines a professional construction consultant.

Arbiters of a dispute will evaluate the subject matter in conjunction with the underlying contract, and to varying degrees the law and legal precedents: knowledge of contracts and law of the subject matter is therefore essential.

(It is noteworthy that construction arbitration under AAA rules is based in equity and arbitrators are not bound to strictly follow the law or legal precedent). A pertinent question then is just how much knowledge of law does a would-be representative require and how can this knowledge be obtained (see below).

The ability to frame and present arguments is crucial but advocacy skills are often a quality intrinsic to the individual. While it is true that attorneys are trained and on how to be good advocates, there are equally good advocates who are not attorneys including many construction dispute professionals.

Court room histrionics might favor the highly skilled litigator but an ADR panel comprised of ones experienced peers, rather than a judge and jury, is less likely to be less swayed or prejudiced by courtroom theatrics.

I contend the individual best able to represent a party in a construction dispute will be the one with the best combination of skills for the dispute at hand. Is the issue a complex technical matter with the normal basic legal underpinning, or are complex legal considerations involved? Are the parties so entrenched in their positions that only the most skilled advocate/adversary will make a difference?

Parties should identify, evaluate and prioritize the needs of their dispute and select the best qualified professional to serve them.

 Overcoming the "Unauthorized Practice of Law"

Professional construction consultants prima facie have subject matter expertise and may be good advocates or respected adversaries. Those who specialize in dispute resolution also have a good working knowledge of the primary areas of construction law from their close affiliation with the subject matters. Some may be qualified in relevant areas of law.

Nevertheless, the potential for being accused of engaging in the unauthorized practice of law ("UPL") is the shadow hanging over construction consultants who are otherwise highly qualified and fully capable of representing clients in ADR.

For two reasons, I suggest that UPL legislation was not intended to prevent non-legal professionals from providing professional services in ADR. The first is that UPL legislation is provided ostensibly for protection of the public and construction disputes rarely involve the man in the street. Instead they involve competent business entities employing persons qualified to make reasoned business decisions.

 Secondly, ADR is, as emphasized, not a legal proceeding and serious questions exist on whether UPL actions could even apply to a process that expressly allows for proceedings that are not based in law. Unfortunately, the very definition of UPL is vague and varies widely among jurisdictions. It is interesting to note that in 1986, Arizona’s legislature declined to re-enact its UPL statute since many non-legal professionals had provided varying degrees of "legal assistance", apparently successfully.

Removing the UPL threat will provide parties in ADR with a wider choice of alternatives for representation, which may in turn lead to speedier and more economic resolution of disputes.

Regulatory Controls – A Dispute Resolution Professional?

To be clear, I am not asserting that anyone should be able and allowed to represent a party in the ADR process and/or proceedings. What I emphasize is that there are many professional construction (claim) consultants qualified, experienced and capable of representing clients in ADR but who are overlooked by parties partly due to a predisposition or perceived requirement to reach for an attorney but also perhaps because of unfounded concern over their ability.

Given the often high stakes involved in construction disputes it makes sense to qualify persons before they can represent clients. However, is it really necessary to require the all encompassing education and training of a qualified attorney when the areas of law involved are limited to the professional’s subject matter expertise?

Perhaps the answer is to create the Dispute Resolution Professional similar to how the medical profession created the Physician’s Assistant. This model, which has been extremely successful in the medical profession, provides for regulation and control, while affording broader and more economical choices to the parties.

Project Managers – another parallel

In many ways the approach described above mirrors the transition we saw in the front end of construction projects. Historically, the architect or engineer was the "obvious choice". Then came the Project Management movement and now we often see the PM as the first person on board who may be neither Architect nor Engineer but is nevertheless the best qualified to get the job done.

Naturally there was initial resistance and some remains but by and large the various professionals show mutual respect and work well together. Above all, the client, after being introduced and informed of the concept, recognized and embraced it and became the ultimate winner, as he/she well should.

Summary

ADR is not litigation and is not bound by the same regulatory controls. Parties are or should be free to select who represents them.

Client should evaluate the needs of their dispute and select a representative with the most suitable qualifications and experience; this may be an attorney or a professional construction consultant.

Parties in construction disputes likely desire, and should be afforded, assurances that their representative is qualified.

In twenty years of major construction contract experience, twelve specializing in dispute resolution, my experience is that only rarely and/or in the largest of disputes are the legal issues and underpinnings that "complex" or pivotal.

Given the foregoing clients and parties to construction disputes should constructively consider professional construction consultants when they require representation in ADR.

This is valuable research being overseen by two leading international schools in Construction Management. To take part in this survey please click here or email icartwright@pinnacleone.com