Expert mediation is the best option for dispute resolution
The judges in the Technology and Construction Courts are apparently kicking their heels for want of cases to try, while requests for the RIBA to appoint an arbitrator have fallen this year by about 50 per cent. But don't conclude that there has been an outbreak of goodwill and harmony across the construction industry. If only that were so: the other side of the picture is that the number of adjudications is growing and the UStrend to resolve disputes by mediation has also taken root.
It used to be the case in the construction industry that dispute resolution by arbitration or litigation was not contemplated until after the end of a building project. But the recent Construction Act has brought that threshold forward so that, seemingly, the moment a problem arises the rush is on to get the matter decided quickly. Consequently, speed of process is overtaking the quest for absolute fairness. Rough justice!
But how badly is adjudication working? It is curiously difficult to find out. A number of recent adjudication decisions have subsequently been challenged in the Technology and Construction Court, but these cases have been decided on procedural and jurisdictional points, not incorrect findings of fact. Incorrect decisions may, of course, have been decided under the confidential cloak of arbitration - we have no way of knowing.
Nevertheless, I sense that the construction industry is becoming suspicious of adjudication, and some would say that the reason behind this is that the lawyers are again the main beneficiaries of any conflict.
Anecdotal tales already abound concerning the staggering level of costs that solicitors and barristers can rack up in a mere 28 days of adjudication. Parties who have already spent large sums of money on that process will often choose to cut their losses rather than challenge a bad decision by pouring good money after bad with arbitration or litigation.
Once bitten, twice shy!
Alec Grant, the architect barrister who runs the RIBA's arbitration service, suggests that, like many other human activities methods of dispute resolution are susceptible to fashion. I agree, and it must be a concern that the explosion of adjudication across the construction industry is increasing the overall cost of disputes to the industry, precisely the reverse of what Latham intended. At the same time, transferring decisions from judges and arbitrators to a small army of barely trained assessors is now widely rumoured to have resulted in a raft of poor decisions that are a mere apology for justice. It's a frightening prospect that so many quantity surveyors now adjudicate on construction defects for which they have next to no training.
The best way to resolve a difference is by negotiation, face to face. At a general level architects do this all the time, smoothing ruffled feathers at site meetings, suggesting appropriate courses of action, and often giving a lead that prevents direct conflict. If a dispute arises we can attempt to bring common sense to bear and win the participants around to a compromise.
Doesn't it happen all the time? But there are other occasions when positions are apparently so intractable that some kind of third-party intervention, with all its attendant costs, becomes inevitable.
So it is timely that a number of specialists with a huge amount of practical experience in the construction industry have got together to form a non-profit-making organisation called the Construction Contracts Mediation Group (CCMG). Mediators, of course, do not resolve disputes: they merely provide the setting and create an environment conducive to parties to resolve their differences themselves. The French say it better: they are amiables compositeurs. Mediation is increasingly fashionable; the question is whether it will genuinely reduce the cost of dispute resolution, or whether, like adjudication, it will be yet another fashionable opportunity for lawyers to line their pockets. My experience supports the former view: mediation works, works well, and works economically. I wish the CCMG every success with its mission.