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Commercial drivers
Typical dispute characteristics
Construction practitioner’s toolbox: traditional approach
Mediation – where does it fit?
The new Court-Annexed Mediation Rules
Opportunities for RICS members
- Project value exceeds contractor’s resources
- Contractor’s cash flow critical
- Project duration may be several years
- Project is a team effort –preservation of relationships important
- Expect the unexpected
Complex – contractually and technically
Evidence to be canvassed extensive
Claims often of large value
Often multiple parties
Expensive to prosecute
Expedition and finality Cost-effective By decision-maker with built
environment experience Preserving of the working relationship
EMPLOYER’S REPRESENTATIVE DECISION LEADS TO DISPUTE
ADJUDICATION AMICABLE SETTLEMENT OR MEDIATION
ARBITRATION OR LITIGATION
Sequential process Creates jurisdictional pre-requisites with
time-bars Fosters lawyering and technical point-taking Greatly increases the duration and cost of
dispute resolution
First tier
Either professional or employer’s employee
Not perceived as completely impartial or independent
ADVANTAGES:
Non-consensual: allows joinder of extra-
contractual parties Can deal with refusal to
co-operate
Appeal possible
DISADVANTAGES:
Most Protracted and expensive process:
2 to 5 years
Parties have no control over process or choice of decision-maker
Credibility – perceived home ground advantage
Definition:
Voluntary submission of a dispute to an impartial third party whose judgment is final and binding upon the parties
Advantages:
Consensual jurisdiction: Parties appoint suitably
skilled arbitrator Parties control
procedure, time table and venue
Confidentiality Increased credibility
Finality:
SA Courts respect arbitration awards
No appeals
Disadvantages:
Protracted and expensive:
18 months to two years Does not cost less than
court litigation
No further recourse if award is poor
Advantages:
Allows for appointment of suitably skilled adjudicator
More speed (90 days), less cost, less formality
Adjudicative - interim award operation
Evaluative – increased settlement prospects – form of evaluative mediation?
Supposedly resolves 99% of construction disputes
Disadvantages:
Usually difficult to resolve factual disputes
Not same procedural requirements as arbitration
More superficial procedure Award of lower quality than
on arbitration Remains costly for more
involved disputes Greatly increases time and
cost in extended multi-tier procedure
Definition:
A process, conducted by an independent third party, in a strictly confidential manner, where the object is to facilitate the parties resolving their dispute
Facilitative Inquisitorial process Multi-dimensional
outcome under party control
Participation completely consensual
Completely confidential, privileged process
Adjudicative, evaluative Adversarial process One-dimensional
outcome under third party control
Participation not completely consensual
No privilege, and may also not be confidential
What is it?
The introduction of mediation as a permissible or even mandatory litigation step in the formal Court process
Imported into the Magistrate’s Court process through an amendment of the Court Rules
Pilot project commencing in certain districts from September 2013 onwards
International background: introduced in other jurisdictions during past 15 years:
○ Canada ○ Philippines ○ US ○ India ○ Australia ○ Lesotho
Any party or the Court may refer a dispute to mediation
Dispute Resolution Officer appointed by Court administers mediation process
Party participation completely voluntary Parties carry the mediator’s costs
equally Further litigation steps suspended
pending outcome of mediation
Litigation suspended during mediation process
Mediator plays facilitative impartial role, cannot make any decisions of law or fact
Proceedings confidential All discussions and disclosures, oral or
written, at mediation privileged – unless contained in settlement agreement or otherwise discoverable
Party’s disclosures completely voluntary
Canada – CAM: 75%
Philippines – CAM: 77%
Australia – CAM: 51% less than a day
UK – in construction disputes: 75% less than a day
Minister determines qualification and standards of fitness of mediators
Minister maintains list of accredited mediators Parties may nominate mediator Studies show parties in construction disputes
prefer mediators with knowledge of the built environment
This constitutes opportunity for RICS members who are accredited mediators in construction disputes
Most expeditious and cost-effective procedure
High success rate
Parties in control – can ensure mediator has built environment experience
Preserves the working relationship
Ideal procedure to place between employer’s representative decision and arbitration provisions in standard form construction contract
Mediation
one day
Cost – one day’s fees
Parties define the outcome
Participation carries little risk
Traditional
Months or years
Costs ten to a hundredfold more
Legal remedy predefined
Stakes are high in litigation
It’s new: Advantages not universally known Absence of statutory recognition in South
Africa Mediator training and accreditation a recent
event Cannot replace arbitration or litigation in
standard form contracts Court-Annexed mediation – mainstream
recognition
The Court-Annexed Rules: alternative to mainstream
This will increase practitioners’ familiarity with mediation and the advantages thereof
The built environment has always been pro ADR
JBCC contract has introduced mediation as an option
RICS members represent ideal candidates to mediate construction disputes
Who may refer a dispute?
Any party to a dispute: before or after the commencement of
litigation, but prior to judgment After trial commencement the leave of the
Court is required The Court at any time after
commencement of litigation, if it believes there is good reason for doing so
Who administers the dispute
The appointed Dispute Resolution Officer – a Court employee
DRO acts as liason between parties, the mediator and the Court and manages mediation process for its full duration
The process is voluntary “Voluntary Court-Annexed Mediation Rules”
The parties must enter into a written mediation agreement
Parties cannot be forced to do so
No provision for costs penalty if party refuses unreasonably
Who appoints and pays the mediator?
The parties But failing agreement, the DRO from a list
of accredited mediators Rules will provide for a list of accredited
mediators Mediators need not be lawyers, but must
be accredited Rules prescribe mediator’s fees Parties must agree to share mediator’s
fees equally
What is the procedure? Party or Court refers dispute to DRO for mediation DRO calls upon all parties to attend conference within 10
days to determine parties’ agreement to mediate At conference parties seeking mediation either conclude
mediation agreement or refuse to do so. Agreement to mediate identifies mediator, date time and
venue of mediation, duration of mediation If not yet part of pleadings, statement of claim and of
defence exchanged – 10 days each Mediation takes place on appointed date and time –
duration cannot be extended without parties agreement Upon conclusion of mediation, mediator submits report to
DRO within 5 days If settlement has been reached, this may be noted or
made an order If settlement not reached, clerk of court informed that
litigation must continue