co-operation of the parties and others do not, and some are more open to challenge in the courts than others. They have spawned a lot of business for claims consultants, lawyers and other professionals, and the number of methods available can be bewildering to clients.
Litigation or arbitration are, in one sense, the easiest methods. Their primary advantage is that the awards or judgments produced are final and binding, and they are enforceable. There is a restricted right of appeal against arbitration awards, but judgments can be more easily appealed against. The costs can be substantial, however, and the losing party usually pays a substantial proportion of the winning party's costs.
With a view to avoiding the costs of arbitration or litigation, other forms of dispute resolution have become more popular. Mediation is a process by which parties to a dispute try to resolve it by means of a – usually independent – mediator. Provided there is a genuine mutual interest in settling the dispute, mediation can be helpful in bringing the parties together; the mediator can help by encouraging the parties to go the extra mile to resolve their disputes.
Conciliation involves a similar process where the conciliator tries to bring the parties together to resolve their differences. If a settlement cannot be reached, the conciliator issues the parties with recommendations that are intended to provide a basis for further discussions and future settlement. Usually, neither mediation nor conciliation are binding upon the parties.
Adjudication has become more popular since the 1996 Construction Act. Such adjudications apply only to construction operations of a general type, but not to construction involving, for instance, the power and petroleum industries.
A serious problem with mediation, adjudication and conciliation is that claims consultants and lawyers are becoming more involved in preparing and presenting claims
Statutory adjudication is a short procedure that produces a temporarily binding decision. It remains binding until a final arbitrator's award or court decision finally decides the rights and liabilities of the parties. There has been some criticism of such adjudications in the past two years and substantial loopholes have opened up, allowing adjudicators' decisions to be challenged in the courts on a variety of grounds.
The binding expert determination procedure is not dissimilar to adjudication, except that the parties usually agree that the expert's decision will be permanently binding. The problem with expert determination is that there is very little right to challenge: one can usually appeal against the expert's decision only if the expert has not addressed the right questions.
A serious problem with mediation, adjudication and conciliation is that claims consultants and lawyers are becoming more involved. Their role is in preparing and presenting claims, arguments and negotiations. Sometimes these processes can be abused by one or both parties. For instance, a party may agree to mediation simply to find out the strengths or weaknesses of the other party's position. It is questionable whether this is a sensible commercial approach.
Parties that wish to adopt alternative dispute resolution processes must consider carefully not only their own motivation but also that of the other party. They should weigh up against the potential prize of an early, sensible and cheap settlement the prospects of actually achieving such a settlement. If no resolution is achieved, considerable money and time may have been wasted.
Postscript
Robert Akenhead QC is a barrister specialising in construction law at Atkin Chambers and joint editor of Building Law Reports.
