ADR and Adjudicationin Construction Disputes

Peter HibberdMSc, FRICS, ACIArbandPaul NewmanMA (Cantab), DipLaw, FCIArb, Barrister

bBlackwellScience

Contents

Preface ixList of Abbreviations xiii

1 Construction Contracts: An Inevitable Source of Conflict? 1Conflict, claims and disputes 1The problem of profit 2The contract as an agreement and a means of redress 3Allocation of risk 5Standard forms of contract and their drafting 6Standard forms of contract and dispute resolution 8The procurement process and its management 8Is conflict inevitable? 10Using and alleviating conflict 12

2 Arbitration and Litigation: A Tarnished Reputation 16Problems of traditional dispute resolution 16The challenge of ADR 21Can arbitration ever be simple? 23Arbitration rules 26When not to arbitrate 31

3 The Growth of ADR in the United Kingdom, Australia andHong Kong 36ADR in the UK 36ADR in Australia 41ADR in Hong Kong 46

4 Mediation and Conciliation 57Definition 57Approaches to mediation 59The mediator 62Functions of a mediator 63Skills of a mediator 64Mediation agreement 66Mediation procedure 66Guidelines for mediation 69Progressing the mediation 74

vi Contents

Types of dispute suited to mediation 76Circumstances where mediation may not work 79Advantages and disadvantages of mediation 81Conciliation schemes 84

5 Adjudication and Expert Determination 88Adjudication 88The adjudicator 95Adjudication and expert determination clauses 98

6 Dispute Review Boards and Dispute Advisers 105Dispute review board 105Dispute adviser 109Refinements to dispute review boards 112

7 Other Forms of ADR 115The mini-trial 115Mediation-arbitration (MedArb) 122Rent-a-judge 131Other ADR techniques 132

8 Practical and Legal Concerns in Using ADR to ResolveDisputes 135Practical concerns 135Legal concerns 140

9 Adjudication and the 'Construction' Act 151Legislation on construction contracts 151Housing Grants, Construction and Regeneration Act 1996 152Exclusion orders 161Approved Scheme for Construction Contracts 162Other matters related to the statutory need for adjudication

provisions 168

10 JCT Standard Forms of Building Contract and AssociatedSubcontract Forms 170Generally 170JCT Standard Form of Building Contract 1980 0CT 80) 170JCT Standard Form of Building Contract With Contractor's

Design 1981 (JCT 81) 171Amendment 18 JCT Standard Form of Building Contract 1980 173Amendment 12 JCT Standard Form of Building Contract With

Contractor's Design 1981 179Amendment 12 JCT Intermediate Form of Building Contract

1984 Edition 180

Contents vii

Amendment 11 Agreement for Minor Building Works 1980Edition 181

Subcontract forms of contract 181Subcontract forms of contract for nominated subcontractors 184Standard Form of Employer/Nominated Subcontractor

Agreement NSC/W 1991 Edition 186NAM/SC subcontract conditions 186Standard Form of Subcontract for Domestic Subcontractors

(DOM/1) 186DOM/11998 revision 187

11 General Conditions of Government Contracts for Buildingand Civil Engineering Works 190Introduction 190Form GC/Works/1 Editions 1 and 2 190Form GC/Works/1 Edition 3 (Revised 1990) 190GC/Works/1 (1998) 194PSA/1 202

12 Engineering Forms of Contracts 203ICE Conditions of Contract 6th Edition 1991 203ICE Conditions of Contract 6th Edition Revised 1998 204ICE Design and Construct Conditions of Contract 1992 207ICE Design and Construct Conditions of Contract Revised 1998 208ICE Conditions of Contract for Minor Works 2nd Edition 1995 208ICE Conditions of Contract for Minor Works 2nd Edition 1995

Revised 1998 209ICE Conciliation Procedure 1994 209ICE Adjudication Procedure 1997 211FIDIC Conditions of Contract for Works of Civil Engineering

and Construction Fourth Edition 1987 216Supplement to Fourth Edition of FIDIC First Edition 1996 218FIDIC model terms of appointment for a dispute review

board 222Procedural rules for a dispute review board 224IChemE Model Form of Conditions of Contract for Process,

Plant, Lump Sum Contract, 1995 225The Red Book and the Housing Grants, Construction and

Regeneration Act 225Reference to an expert 226Disputes 229Arbitration 230IChemE Yellow Book Subcontract 2nd Edition 1997 230IChemE Model Form of Conditions of Contract for Process

Plant, Reimbursable Contracts, 1992 231IChemE expert procedures 231

viii Contents

13

14

New Engineering Form of Contract and the Adjudicator sContractGenerallyThe consultative documentsFirst editionSubcontractEngineering and Construction ContractSubcontract 2nd EditionNEC Engineering and Construction Contract and Subcontract

Addendum 1998Addendum clause Y2.5The futureNEC Adjudicator's ContractProfessional Services Contract

Model Rules for AdjudicationGenerallyCIC Report on Appointment of AdjudicatorsCEDR Rules for AdjudicationRules of conductCEDR mediationCIC Model Adjudication ProcedureCIC Adjudication Advice ServiceORSA Adjudication Rules (now TecSA rules)

Appendix 1Australian Standard AS 2124-1992Australian Standard AS 4300-1995

Appendix 2Extracts from Australian Department of Defence contracts

Appendix 3Adjudicator Nominating Bodies

Appendix 4The Secretary of State for Transport and Severn River Crossingpic Concession Agreement

Appendix 5The Woolf Reforms and the Civil Procedure Rules

References

Table of Cases

Index

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