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

  Employer’s representative

  Conventional litigation

  Arbitration

  Adjudication

  Mediation

  First tier

  Either professional or employer’s employee

 Not perceived as completely impartial or independent

Definition:

Formal litigation in the Magistrate’s Court or the High Court in South Africa

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

Definition:

Independent third party determines dispute as expert, not as arbitrator

  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

MEDIATION

  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

Settlement

 Whether partial or complete, must be reduced to writing

 Mediator assists parties   If so requested by parties, agreement

may be noted or made an order of Court   If dispute partially settled, unresolved

issues may thereafter be pursued in litigation