Resolving residential occupier's disputes by David Miles FCIArb
CIArb News / 10 December 2009
As is well known, Section 106 of the HGCR Act excludes Construction Contracts with residential occupiers. It has been argued that adjudication is in fact ideal for such disputes.
The problem for the residential occupier, and indeed the contractor, involved in such projects (and their lawyers if they have one) is how to resolve such disputes cost effectively. Such disputes usually (although not always) are of low value such that the legal fees are disproportionate to the amount in dispute. Often they end up in the County Court. They are to construction law, what boundary disputes are to property law.
Specifically to address the problem facing residential occupiers, the Construction Conciliation Procedure was launched in April 2003 by the Construction Conciliation Group www.ccgroup.org.uk
The intention is that anybody is free to download the documents relevant to the procedure and use them without reference or payment to the Group.
It has been designed to take the parties through the whole procedure, from proposing the use of conciliation through to signature of the Conciliation Agreement. The parties can agree any Conciliator of their choosing. However the Group has also established a Panel of Conciliators (who have the dual skills of mediation and adjudication), any one of whom the parties may appoint directly. There is no appointment fee. If the parties cannot agree upon a Conciliator, the Group will appoint upon payment of the fee of £50.
The essentials of the procedure are:
- It is a pre-agreed, fixed period, fixed price process.
- It involves firstly a fixed mediation phase. If no agreement is reached, a binding enforceable Recommendation is made (subject to later litigation/arbitration as in adjudication).
- The amount of documentation is severely limited.
- The whole process must be completed within 28 days
The aim of the procedure is to ensure that the parties will know beforehand what the costs involved will be and that they will end up with a determination of their dispute. It will also be possible to incorporate the CCG Procedure into any contract as a contract term. In the absence of such an incorporation, the procedure can only be used with the agreement of all the disputing parties.
In addition, rejection by one party of an ADR proposal, such as the CCG Procedure, could place that party on risk as to costs, whatever the result.
Of course, such procedure need not be confined to construction disputes.
David Miles is a Fellow of the Chartered Institute of Arbitrators. The CCG has many experienced CIArb members among its practitioners.