Dispute Resolution In Commercial Construction Projects

Project Overview

The nature of the dispute is of civil nature and is covered under the Civil Dispute Resolution Act 2011. The parties to the dispute are the contractor who is the builder and the client. A civil dispute is a disagreement between two or more parties which leads them to threaten or to file a case against the other (Australian Government, n.d.a).

In all the civil matters the parties can precede Pro Se i.e. without any representation of the attorneys, but it is important to have an attorney to represent the party.

This is to bring to your kind notice that the money deducted due to delays and penalties in pursuance of the contract for building the apartment situated at XYZ road in Melbourne. You had deducted the amount of $10,000 per week for four weeks as against the delay in completing the contract. Furthermore, you had also   retained the amount for the defects liability period which is clearly unjustifiable

Here is the justification on our part to prove that we had completed the construction of the building as per the conditions specified in the contract. The delays were not committed on our part. The delay regarding the instructions was due to your late response on a number of issues (Silverman,2014).  

Moreover, the poor service from the aluminum windows manufacturer resulted in units which were delivered three weeks behind the negotiated date. The supplier was recommended by you. We had requested for the early delivery but he failed to deliver the windows on time.

A failed concrete test on a sample of wall panels, later on, proved to meet the specifications which were outside the conditions mentioned in the contract. Certain issues were also faced due to the disturbance created by the neighboring owners of property which proved to be time-consuming and annoying while maintaining the peace of the project (Dragos and Neamtu, 2014).

So, it is hereby stated that we had fulfilled the conditions of the contract and the delays were not committed on our part. We thereby requested you to reimburse the deducted amount. Your failure to pay the amount will further cause the filing of a civil suit in the eligible Court according to the Civil Dispute Resolution Act 2011(Cth )(Zamir and Ritov,2012).

1. The applicant who initiated the civil proceedings in the eligible court must file a step statement at the time of filing the application according to subsection1 of Part 2 of the Civil Dispute Resolution Act 2011.
2. The genuine step statement filed under subsection 1 must specify the steps taken for the resolution of the issues between the applicant and the respondent in the proceedings. The reasons for not taking the must relate to the urgency of proceedings.
3. The genuine steps statements must not be filed in relation to the wholly or partly excluded proceedings. The genuine step statements to be filed by the respondent must be before the date of hearing stated in the application.
4. The genuine step statement must specify the fact that the respondent agrees with the genuine step statement filed by the applicant. If in case, it is disagreed by him, then the reasons for his disagreement should be stated by him.
5. The genuine step statement must abide by the rules of the court regarding the eligible court as per section  18  of the Act.
6. It is the duty of the lawyer to advise the people regarding the requirements of the Act. However, if a party fails to file a genuine step statement then it does not invalidate the application initiating the proceedings or a response to such application (Australian Government, n.d.b).

The dispute could have been avoided by implementing the modes of alternative dispute resolution in the case of civil disputes. It is the method for resolution of disagreements without  filing the suits in the court . The alternative dispute resolutions comprise of different procedures namely mediation and facilitation , negotiation  and arbitration.

Challenges Faced

Negotiation is one of the methods adopted for resolving most of the disputes. It involves both the parties in the dispute. They discuss the problems orally or with the help of written agreements. The parties present the options for resolving the dispute and arriving at an agreement about its settlement. So the contractor who is the builder and the client could have negotiated and arrived at an agreement for the settlement of the dispute ( Redfern, 2015).

Mediation is the process in which the independent party is involved in assisting the parties which are involved in the dispute. The mediator who is the independent party does not have to express his views on the merits of the matter noes does he gives any legal advice or decides over the matter.

The dispute is settled when the parties agree amongst themselves. If the dispute is not resolved then the legal right of the parties does not have an impact. Facilitation is similar to mediation. However, it involves a group of people who are unable to resolve their dispute.

Arbitration is amongst the formal processes for alternative dispute resolution in the matters of civil disputes. The parties to the disagreement are invites for arguing the case in front of an independent person capable of making decisions regarding the resolution of the issue.

The parties must abide by the decisions of the arbitrator. One of the parties can apply and then another one can participate. The award given by the arbitrator is binding like the decision of the court as per the International Arbitration Act 1974.

So, the parties could have resorted to the alternative methods of resolution of disputes and resolved the dispute differently instead of filing litigations in this regard (Mackie and Mackie, 2013).

The Dispute Resolution Procedure for the company can be explained as follows:

The nature of the dispute is associated with the relationship of commercial nature. This may include but not limited to the commercial transactions for exchange or supply of products and services and the agreements pertaining to distribution.

It may also comprise of commercial representation or agency, leasing and factoring along with the construction work, engineering and consultation and activities related to licensing, investment, financing, banking and insurance. The nature of dispute can also comprise of activities such as exploitation agreement, concession carriage of goods or passengers along with joint venture and other forms of industrial or business cooperation (Wang, 2014).

Disputing Liquidated Damages

As the alternative dispute resolution methods are referred outside the courtroom but that does not mean that they are outside the legal system of the country. SO the parties involved in the decision-making process are the contracting parties i.e. client and the contractor who is the builder along with the mediator or the arbitrator.

The parties involved in the ADR are motivated for communicating and understanding the issues causing the dispute and to work mutually for finding an acceptable solution which may be beneficial for both of them( Fiadjoe, 2013).

The process adopted for resolving the disputes can be reviewing the contract. The first step for resolving the dispute is to reconsider the contract again. The clauses which specify the dispute should be considered. It should be verified that if the parties have fulfilled their obligations.

The dispute resolution clause mentioned in the contract shall set the processes for resolving the dispute. The termination clause shall set out the method to end the contractual relationship if the parties wish to do so.

The second step is to negotiate between the parties. Through negotiations, the parties should clearly communicate amongst them regarding the omissions and commissions committed by them and the actions taken by them to resolve the issues within the given deadlines.

The third step can be resolving the dispute by alternative dispute resolution methods. It is a more organized step as compared to negotiation. It can be supervised by an independent person known as a mediator. The mediator shall help the parties in identifying the issues and reaching a satisfactory agreement.

The last resort for resolving the disputes can be litigation. It involves one of the parties to initiate the proceedings against the other party for the enforcement and defense of the legal right (Goldberg, Sander, Rogers and Cole, 2014).

The issues can be documented with the help of the contract in which the arbitration clause is mentioned. It shall allow the parties to the dispute to adopt the procedures for alternative dispute resolution. If the parties adopt the arbitration procedure, then the award given the arbitrator is also documented in this regard (Feliciano, 2017).

In order to resolve the disputes in a proper way, appositive attitude towards disputes is maintained. The company should adopt a policy for resolving internal and external disputes. It must work for building a culture of acceptance, genuine responsiveness and resilience in association with the disputes.

Alternative Dispute Resolution Methods

While evaluating an effective dispute resolution plan, it is important to include strategies for the parties in order to improve the quality of conversations with them. The policy regarding the dispute resolution shall require the parties to promote and be accountable for effectively resolve the disputes as a part of the quality improvement.

The components of the dispute management plan should be clearly comprehended by the parties. The staff must be properly trained, assisted and resourced while handling the disputes. The company should appoint a senior staff member who is accountable for handling the dispute management plan and his reporting to the top management.

The policy must help in safeguarding the relationships amongst the parties and reduce the disputes in future (Australian Government, n.d.c).

The parties must remain calm, professional and polite in their verbal and written communications while resolving the disputes through alternative dispute resolution mechanism.They must avoid abusive and emotional language and blame on each other.

They must comprehend the situation from the perception of the other party. They must think of creative solutions and win-win strategy for restoration of the business relationship. They must make a list of probable solutions for discussing with the other party. They should be realistic and be prepared for negotiations.

They must contact the other party for negotiating on the solution. They must ensure that the person with whom they are interacting must be authorized for settling down the dispute. They must listen to the other party carefully and take notes of their conversation. They must not interrupt in between and respond in a calm and non-threatening way (Go To Court Pty Ltd, 2018).

References 

 Australian Government (n.d.a) Civil Dispute Resolution Act 2011 [online] .Available from : https://www.ag.gov.au/LegalSystem/AlternateDisputeResolution/Pages/CivilDisputeResolutionAct2011.aspx [Accessed 20^th October 2018].

Australian Government (n.d.b) Federal Register of Legislation [online] .Available from : https://www.legislation.gov.au/Details/C2011A00017 [Accessed 20^th October 2018].

Australian Government (n.d.c)  International Arbitration Act 1974[online] .Available from : https://www.legislation.gov.au/Details/C2016C01110 [Accessed 20^th October 2018].

Dragos, D.C. and Neamtu, B. (2014) Alternative dispute resolution in European administrative law. Germany: Springer Berlin Heidelberg.Pp.1-10.

Feliciano Jr, S.( 2017) Alternative Dispute Resolution. The Catholic Lawyer. 33(1), p.10.

Fiadjoe, A.( 2013) Alternative dispute resolution: a developing world perspective. NY: Routledge-Cavendish.pp.1-10.

Go To Court Pty Ltd(2018) Alternative Dispute Resolution in Victoria [online] .Available from : https://www.gotocourt.com.au/civil-law/vic/alternative-dispute-resolution/ [Accessed 20^th October 2018].

Goldberg, S.B., Sander, F.E., Rogers, N.H. and Cole, S.R. (2014) Dispute resolution: Negotiation, mediation and other processes. Netherlands : Wolters Kluwer Law & Business .Pp. 1-10.

Mackie, K.J. and Mackie, K.( 2013) A handbook of dispute resolution: ADR in action. NY: Routledge. pp. 1-20.

Redfern, A.( 2015) Redfern and Hunter: Law and Practice of International Commercial Arbitration. Oxford:  Oxford University Press. Pp. 1-10.

Silverman, R.A.(2014) Law and Urban Growth: Civil Litigation in the Boston Trial Courts. New Jersey: Princeton University Press .pp. 1880-1900 

Wang, M.(2014) Are alternative dispute resolution methods superior to litigation in resolving disputes in international commerce?. Arbitration International. 16(2), pp.189-212.

Zamir, E. and Ritov, I.(2012) Loss aversion, omission bias, and the burden of proof in civil litigation. The Journal of Legal Studies. 41(1), pp.165-207.