Resolving contract disputes in the building industry can be time consuming, especially if a process for resolving such disputes has not been established at the outset.
Alternative Dispute Resolution (ADR) can be a speedier way to get resolution on contractual disputes as it provides a way for parties to resolve issues outside of a court system that is by nature adversarial.
Our Barbados Chapter held a seminar on the evening of July 17 at the Hilton Barbados to examine the use of ADR in standard forms of building contracts issued by the International Federation of Consulting Engineers (FIDIC) and the Joint Contracts Tribunal Limited (JCT).
According to the Barbados Fair Trading Commission’s (FTC) 2016 report on the construction industry, FIDIC and JCT contracts are two of the preferred standard forms of contracts by many stakeholders within the construction industry in Barbados and it recommended the use of ADR for resolving contract disputes.
What makes a dispute?
The legal framework for understanding what makes a dispute was proposed in the case of Amec Civil Engineering Ltd. vs The Secretary of State for Transport 2004 by Lord Justice Jackson who stated that a dispute does not emerge until a claim by one party is explicitly not admitted by the other party or, in the absence of an explicit rejection, is objectively inferred as not admitted from the discussions between the parties or by prevarication or silence on the part of the respondent party.
Disputes are resolved by the parties agreeing a compromise resolution between themselves through negotiation or assisted in that regard through mediation. Where it is not possible for the parties to reach a satisfactory compromise resolution then it is necessary for a neutral third party to impose a decision, award or judgement through construction adjudication, arbitration or litigation.
JCT and FIDIC in their standard forms of building contracts allow the parties to reach final and binding resolutions of disputes by using combinations of the above methods with some parts of the combinations being optional and some being mandatory.
Now let's explore the three ADR mechanisms used in the JCT and FIDIC contracts:
Arbitration is a private dispute resolution mechanism whereby a neutral third party acting judicially provides a final and binding award as the resolution of a dispute which is supported in law and by the courts in Barbados with limited right of appeal.
Construction Adjudication is a similar mechanism whereby a neutral third party provides a relatively quick binding decision as the resolution of a dispute but without legislative support in Barbados to allow the building contract to progress and which may become final unless overturned by another permitted dispute resolution mechanism.
Mediation is a mechanism whereby a neutral third party assists the parties in negotiating a binding compromise resolution of a dispute without the need for an award or a decision to be rendered and without the need for legislative support.
ADR providers in the Caribbean
We have approved ADR services provided by JAMS and ADR Chambers International in the Caribbean region. It's important to know that all Registered Firms and Valuers must have an ADR provider as part of the programs’ requirements. If you have any question please send an email to firstname.lastname@example.org.
Authored by Miles F Weekes, BSc FRICS MCIArb
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