When Is There a Building Dispute?
A building dispute occurs when one of the parties to a construction contract violates any provision in said contract, or when one party violates any of the express or implied warranties therein.
An example is when a builder or a landscaper you contracted causes damage to your property in the course of, or as a result of, the work they did.
Modes of Settling Building Disputes
The modes of settling domestic building disputes are categorized as follows:
Alternative Dispute Resolution (ADR)
Arbitration
Litigation
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) is an umbrella term for different methods of resolving disputes in a non-adversarial, amicable manner.
None of them involve the courts or the rendition of a final judgment. Decisions arrived at by the parties through ADR are binding, though.
Forms of ADR
The different types of ADR processes include:
- Negotiation
- Early Neutral Evaluation
- Expert Determination
- Mediation
- Conciliation
- Adjudication
In what instances should the parties undergo ADR?
In case of dispute, the parties should undergo ADR:
1. When it is provided in their contract
3. When it is ordered by the NSW Civil and Administrative Tribunal (NCAT) or the courts
What are the most commonly resorted to modes of ADR?
These are mediation, conciliation, and expert determination.
Mediation
Mediation is a private and confidential process, where the parties will try to settle their dispute by arriving at a compromise. It is facilitated by a neutral, third party mediator, whose role is not to decide the dispute on the merits, but to help the parties arrive at a mutually acceptable resolution.
Conciliation
Like mediation, conciliation involves a neutral third party facilitator whose objective is to help the disputing parties arrive at a settlement agreement. Unlike in mediation, however, the facilitator in conciliation proceedings (the conciliator), is less involved in the discussions.
Expert Determination
Another type of ADR is expert determination, wherein the parties agree to appoint a third party expert, like a building consultant, who is tasked with making an independent assessment. This is most relevant in cases where there is damage to the works or to the property. The expert’s findings are generally binding.
Arbitration
Arbitration is resorted to if the same is provided for in the construction contract. The process is very similar to a court litigation, with the same formalities and procedure. The arbitral award is binding and enforceable.
This is not a common remedy in domestic/residential building disputes, and is generally more applicable to international construction contracts.
Related content: Arbitration: Is It An Effective Form of Dispute Resolution?
Litigation
Litigation is a full-blown court proceeding, either in the circuit courts, or in the supreme court. Resort to the courts may only be had if ADR or tribunal hearings fail.
Related Content: The Litigation Process: What You Need to Know
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