Why do building conflicts arise
Dispute settlement in case of construction disputes
The cheapest and most amicable dispute resolution is mediation. It describes a voluntary and informal negotiation process led by a mediator. The result of a mediation is not binding, unless the agreement is drawn up in writing.
Adjudication is the standard way of settling disputes in the English construction industry. It should help to settle disputes immediately and on the construction site so that construction work can be continued quickly. The result of an adjudication can be final or an interim solution. It should be faster (28 days in some standard contracts such as the English JCT contract or up to 84 days for FIDIC contracts) and more cost-effective than litigation (court proceedings). Here an independent adjudicator (a kind of arbitrator) listens to the claims of both parties before coming to a conclusion. The adjudication procedure differs from arbitration, a procedure in which, in contrast to adjudication, a fair hearing is granted and a binding decision is to be made for both parties. The basis for this is the construction contract, from which the corresponding claims are derived. Only what is regulated in the construction contract can later be decisive in the procedure. The contract establishes a kind of jurisdiction of the adjudicator and at least temporarily replaces the jurisdiction of the ordinary courts or arbitration tribunals.
The appointment of the adjudicator is either specified in the contract or by a "nominating body" such as the Royal Institute of British Architects or the Royal Institution of Chartered Surveyors. As a rule, courts and arbitrator support the adjudicator's result if it does not obviously violate applicable law.
Arbitration is the most closely comparable arbitration process to a legal process. An independent third party gives both sides a hearing. The trial is less formal than a court case. Usually the judgment is legally binding and the parties are not allowed to go to court following an arbitration if they are dissatisfied with the result. What was originally a simple and inexpensive alternative to court proceedings has become more complicated and expensive over the years through the engagement of lawyers and barristers - as is so often the case in life!
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