Hands up if you\u2019re a contractor or sub(specialist)-contractor and you\u2019ve had a bit of \u201cfriction\u201d with the other party to your contract? Let me guess\u2026 whatever you were arguing about, ultimately, it came down to money, right? For one reason or another, you will have either thought you were being paid too little and\/or too slowly, or you\u2019ll have thought you were being fleeced on a poor job that took too long (depending on which side of the contract you\u2019re on)? That might have been because there was an argument about variations, defects, delays or whatever, but however you slice it up, it was ultimately about who was getting paid what and when. Sound familiar?<\/p>\n
I\u2019ve spoken a lot about dispute avoidance rather than dispute resolution, and I continue to stand by the principle that prevention is better than cure. It\u2019s infinitely cheaper, too, not just in financial terms but in terms of reduced stress, time away from the primary activities of your business and so on. I\u2019ll keep shouting that from the rooftops.<\/p>\n
As I explained last time I was on Own the Build, the most enjoyable part of my job as a construction lawyer, by far, is helping to train clients to prevent these sorts of disputes from occurring in the first place. Unsurprisingly, many businesses don\u2019t want to shell out for legal services until a dispute has actually started. The lawyers are often seen as a distress purchase. Although I think that\u2019s usually a false economy, I get why it\u2019s like that.<\/p>\n
With that in mind, I thought it might be interesting to talk about what happens at the other end of the line. What do we do if there is a dispute? What\u2019s in our toolbox?<\/p>\n
Those who listened last time I was on the podcast will recall that I discussed some of the common mistakes and misconceptions that people in the industry make in relation to critical points of construction law (around how contracts are formed, how the payment mechanism works under the Construction Act, etc.). It\u2019s the same with dispute resolution. There are lots of common misconceptions that we hear repeatedly. We often hear clients who have not been paid say things like, \u201c\u2026but we\u2019ve been told we can just do X,\u201d or \u201cWhy do we need to do Y? We should just go straight to Z?\u201d It\u2019s never entirely clear where the advice about those options has come from, and it\u2019s often misguided.<\/p>\n
I thought I\u2019d take this opportunity to discuss some of those misconceptions and give listeners a bit more insight into the different methods of trying to enforce payment (after all, if I\u2019m not helping clients avoid disputes, my second favourite part of my job is slaying the opposition for them ).<\/p>\n
There are a variety of options available (everything from a stroppy letter to a winding up petition, with adjudication, litigation and arbitration all thrown into the mix, and don\u2019t forget the potential for a negotiated settlement, which may or may not be through a slightly more \u201cformal\u201d process such as mediation).\u00a0 There are significant (but sometimes nuanced) differences between the options, and it\u2019s not uncommon for people to confuse the terminology (is it adjudication or arbitration, for example?).<\/p>\n
Which option is best will always depend on all the circumstances taken together (how much is being claimed, whether it\u2019s admitted or disputed, whether it\u2019s at an interim or final payment stage, the wherewithal of both parties and so on). A one-size-fits-all approach isn\u2019t appropriate, and strategy will always need to be carefully planned, balancing the pros and cons of each approach in the context of the specific circumstances to ensure the most commercially viable approach is taken.<\/p>\n","protected":false},"excerpt":{"rendered":"
Hands up if you\u2019re a contractor or sub(specialist)-contractor and you\u2019ve had a bit of \u201cfriction\u201d with the other party to your contract? Let me guess\u2026 whatever you were arguing about, […]<\/p>\n","protected":false},"author":30,"featured_media":18188,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1,46],"tags":[],"class_list":["post-18183","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-otb-guest-articles"],"acf":[],"yoast_head":"\n