Unit 1

1. Unit 1 Conflict : Disputes & Arbitration

2. Objectives • List and group potential causes of complaints or disputes during construction • Describe the actions available to the parties in the event of complaints or disputes arising • List and describes sources of external advice available to the respective parties involving in the complaint or dispute • Formulate a working plan to review each project with respect to avoiding and/or minimising complaints or disputes using proactive management techniques

3. Objectives • Establish a contingency plan to accommodate unforseen complaints or disputes

4. Complaints • Discuss complaints you’ve had on jobs • Processes to avoid and minimise these complaints • List types of complaints you’ve had on the job • Disputes come in all forms • It is important to stop the complaint becoming a dispute • Good communications • Good practice to avoid all disputes

5. Contracts • What is a Contract ? • Contracts are legally binding agreements between private parties • Enforced by the Government through the courts • Everybody has freedom to contract anything within the law • Parties to the agreement must comply to the terms of the contract • Real or Perceived non compliance can lead to complaints & disputes

6. Contracts • Contracts should be used in all cases • Home building act requires that projects valued over must have a written contract for the builder to be able to claim payment • There are various types of contract • Standard form MBA, HIA • Standard form Department of Fair Trading • Specific purpose prepared by either builder or client

7. Contracts • What other ramifications on type of contract • MBA HIA contract usually favour builder • DFT usually favour client • Specific purpose contract – if somebody goes to the trouble, you can guarantee it will favour the drafter of the contract

8. Contracts • Remember contracts are legal documents • Make sure you understand the requirements as you will be legally bound • Having this understanding of the requirements will be the first step in minimising complaints

9. Complaints • What is the most common type of complaint ? • Most complaints are caused by lack of communication

10. Builder and Client Disputes • Obviously between builder (you) and • Client (the person you’re building for) • Client may also include • Architect (Bayline v ……..Child Care) • Engineers • Financers (Wintertons Vs Hambros) • Architects and other professional agents of the client – ultimate dispute is with client

11. Builders and Client Dispute • Disputes may be wide and varied • Types of finishes specified in contract • More confusingly, items not specified in contract lead to disputes • What type of bath ? • What type of skirting ? • Who pays power fees? • A building contract needs to be very detailed

12. Builder & Client Disputes • Quality of Work • Is the same standard of work required in a Department of Housing Unit as in a unit at Vacluse • Variations • Client always thinks it’s included builder thinks it’s an extra

13. Builder and Client Disputes • Extension of time • Contracts will specify format of claim • How much delay is caused by rain ? • Client can’t make up mind in deciding of tiles • Is it a critical item ? – Not all delays are critical

14. Builder and Client Disputes • Performance and completion • What is the date for practical completion ? • This is dependent on delays, variations, extension of time • Liquidated damages ? • Is the job complete ?

15. Builder and Client Disputes • Document interpretation • Specification says granite bench tops • Plans say laminate • Contract should specify order of precedent • Where does precontractual documentation and correspondence fit in ?

16. Builder and Client Disputes • Progress payments • Has work been completed ? • Is payment due ? • Retention ?

17. Builder and Client Disputes • Disputes may affect • Cash flow • Company reputation • Which may in turn affect the viability off the company • That’s why conflict resolution is an important business management tool

18. Builder and Union • Neglect award conditions • Neglect safety • Disputes may start from very minor issues e.g. pie ovens, dim sim allowance • Disputes may cause stoppages which may be very expensive

19. Builder and Sub Contractor • These types of disputes are similar to client builder disputes • Builder is normally called principal/head contractor • Sub contractor contracts to builder contracts to client – Sub contractor cannot sue client under contract and vice versa

20. Builder and Sub Contractor • Quality off work • Client, builder and Sub contractor may not necessarily agree with each other on required quality of finishes • Client, builder and Sub contractor may not necessarily agree on materials to be used

21. Builder and Sub Contractor • Performance and attendance • Sub contractor may also claim extension of times • Delay may not be caused by client issues – this may lead to Sub contractor having more time to complete works than builder has with client • Subcontractor may have many jobs • This conflict will inevitably lead to builder client conflict

22. Builder and Sub Contractor • Variations • Builder has two different contracts • First contract builder to client second contract builder to contractor • Extremely rare to be same type of contract inevitably there is conflict between the two • Example - Head contract may include rock excavation, Sub contractor may not include it

23. Builder and Sub Contractor • Payments • Payments scheduled on head contract may not match Sub contract – affecting cash flow • What happens if client doesn’t pay and Sub contractors payment is due – non payment is not caused by Sub contractor

24. Dispute Resolution • What do you do? • Firstly try identify the cause • You may be in the wrong • It may be a simple misunderstang

25. Dispute Resolution • Next Step? • Meeting between the parties – try reach mutaul agreement