Although parties can regulate their relationships by way of contract, disputes may still arise.
Having an agreed means by which such disputes can be effectively resolved is important. At whatever stage a dispute arises, there are a number of dispute resolution options available. This note highlights the issues which should be considered when selecting the form of dispute resolution and considers recent developments that could affect how construction disputes in Ireland may be resolved.
Dispute Resolution Options
As regards the dispute resolution options available to the parties to a construction contract, some work better than others, depending on factors such as the nature of the project, the issues in dispute, the stage at which the dispute arises and the relationship of the parties. In addition to litigation: arbitration; mediation; conciliation; and, expert determination are all methods of dispute resolution which are either well established or whose usage is increasing. Adjudication has also been utilised more recently as a contractual form of dispute resolution but it has also been formally proposed as a form of dispute resolution which would be available to a party as a statutory right. Save in respect of litigation, they are all confidential processes.
Litigation: is simply the term used to describe the resolution of disputes through the Courts. The nature and level of damages sought will generally determine what court an action will be heard in, which can have a significant impact on the speed and cost of the action. Actions in the High Court Commercial List1 tend to be the most actively managed. Litigation will also allow parties to an action to join other parties in, either as co-defendants or as third parties.
Mediation and Conciliation: are terms which are often used interchangeably but the difference between them is not always clear. Both are based on being a without prejudice process which involves a neutral third party facilitating the parties to reach an agreed resolution to their dispute. However, in mediation, the mediator's role is purely a facilitative role. The mediator does not provide any evaluation on what the solution to the dispute should be. A conciliator on the other hand, if the parties are unable to settle the dispute, may make proposals to the parties to resolve it, usually described as a "recommendation". Generally, the recommendation will become final and binding on the parties if it is not rejected within...