Conciliation in construction disputes
This Article is all about Conciliation in construction disputes as a means to resolving these disputes. It is important to note early in this article that Conciliation as a separate form of dispute resolution is slowly dying and it is probably fair to call it simply a form of mediation.
Stravelles run a course in Adjudication which aims to allow the student to run their own adjudication as the referring or responding party without paying for legal representation.
We support legal representation in more complex cases but we want to encourage especially smaller companies to feel more confident fighting for their contractual rights.
Introduction to Conciliation in construction disputes
In the construction industry, disputes are very much the norm rather than the exception. In fact nearly all construction contracts have some form of built in mechanisms to deal with disputes regarding issues with time, costs and quality. Examples would be clauses relating to payment, delays and so forth.
When a dispute over an event or issue cannot be solved satisfactorily within the contract then either or both parties can attempt to solve the dispute through several forms of dispute resolution. The cheapest and fastest form of dispute resolution is of course negotiation. The slowest and most expensive is the courts process or litigation.
In between these extremes are Adjudication and Arbitration which are essentially different formats of the same idea — submitting your dispute to an independent third party for decision. Its essentially like the old story of the two mothers referring a parental dispute over a baby to King Solomon.
Now there are other forms of dispute resolution floating around which are not negotiation between the two parties but are not inviting a third party to decide the issue. These include mediation and conciliation.
Mediation is essentially hiring an independent person to sit down with both parties and to gently assist both parties to come to an agreement. Conciliation is a form of mediation where the independent person might lead the parties to possible solutions using their own initiative.
All of these processes (mediation and conciliation) are completely non binding.
Origin of Conciliation in construction disputes
Conciliation is thought to have evolved in construction as part of the Institution of Civil Engineers’ (ICE) family of contracts and subcontracts. Conciliation is mentioned in these suites of contract as a useful dispute resolution method.
The ICE Conciliation Procedure (1999) outlines the process of how a typical conciliation process should take place. Parties to the contract can agree to resolve a dispute through conciliation.
Now that the ICE contracts have been replaced by the NEC contracts conciliation has essentially been replaced by mediation. Conciliation is now essentially being disappeared and it is being referred to as ‘Evaluative mediation’.
The process of Conciliation in construction disputes
The process is quite simple. Both parties have a dispute that they cannot resolve through negotiation. They both agree to resolve the dispute through conciliation.
A conciliator is appointed to oversee the process.
The process follows the typical mediation process whereby the conciliator leads the parties through the issue.
If one or both parties declare they cannot come to an agreement then the conciliator will issue a recommendation.
This recommendation is binding if neither party rejects it within one month of the issue of the recommendation. This essentially renders it toothless and non binding.