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CEDR Solve - Construction Adjudication by Craig Rimmer
Introduction
The Centre for Effective Dispute Resolution [CEDR] was established in 1990, with the aim of providing Alternative Dispute Resolution [ADR] techniques and educating businesses and legal communities in the use of ADR.
CEDR��s dispute resolution service, aptly named CEDR Solve, is one of the leading independent dispute resolution services in Europe and has experience of over 14, 000 dispute referrals, the majority of which have involved mediation.
As identified on its website, CEDR has been ��instrumental in bringing mediation into business practice, �� especially in raising its profile within the construction industry. Its mediation services have an impressive settlement rate of over 70 percent.
Although mediation is perceived as being its primary speciality, CEDR offers a comprehensive range of dispute resolution processes and has been a leader in innovative dispute resolution techniques for nearly two decades. In fact, CEDR probably provides every form of ADR technique you are likely to have heard of, and some forms that you probably haven��t heard of �C yet. In September 2008, CEDR Solve proved innovatory yet again with the launch of its updated Rules for Construction Adjudication. Granted, adjudication is by no means a new discovery, but when provisions for the use of mediation are added to the process, it puts a new perspective on a tried and tested method.
The Process
CEDR��s Rules for Construction Adjudication provide for a standard 28-day adjudication in accordance with the Housing Grants, Construction and Regeneration Act 1996, with the option to refer the dispute to mediation after the adjudication has taken place.
On reaching a decision, the adjudicator may invite the parties to refer the dispute to mediation. If the parties refuse, then it is business as usual and the decision will be thrust upon the parties. If the parties are receptive to the idea, the adjudicator��s decision remains sealed and a timetable for mediation is agreed.
At this stage in the proceedings, the adjudicator miraculously undergoes a transformation from a judgemental, evaluative, decision maker to a facilitative, creative problem solver. The mediator, formerly known as the adjudicator, now has 28 days to facilitate a settlement between the parties.
If for any reason a settlement cannot be reached within 28 days, or either party decides to abandon the mediation,[link widoczny dla zalogowanych], the mediator will don his adjudicator��s cap, dust off the envelope containing the adjudication decision and impose its contents on the parties as if the mediation had never happened.
If, however, a settlement is reached by the parties during the mediation, the content of the envelope remains with the adjudicator and the parties remain blissfully unaware of his/her decision.
Disadvantages
On the face of it, the process sounds simple and will result in the settlement of a dispute, be it temporarily binding if imposed by way of the adjudicator��s decision or binding if mutually agreed between the parties in the mediation. However, several issues of concern arise in combining an evaluative decision-making process such as adjudication, with a negotiated settlement facilitated by a mediator.
The first issue is that of the adjudicator/mediator. The role of the independent third party in the two types of dispute resolution procedure is very different.
Adjudication has now become a familiar and well used procedure in the construction industry, in which the adjudicator draws his/her conclusions and makes a decision using predetermined criteria to assess the credibility of the parties�� arguments, allocate the burden of proof and/or apply relevant law, rules or contract conditions to the situation. Simply, the role of an adjudicator is to evaluate the situation and decide the issues in dispute.
The role of a mediator, on the other hand, is to encourage the parties in dispute to evaluate their own situations and to assist the parties in making their own decisions, whilst remaining neutral at all times. This is not to be confused with the required neutrality of an adjudicator, as they too have to remain impartial. However, when all of the evidence has been assessed and the credibility of the parties�� arguments has been scrutinised, the adjudicator must ultimately side with one of the parties and make a decision. The mediator facilitates a decision being reached by the parties.
It is therefore questionable whether an adjudicator, who has undertaken the gruelling process of coming to a decision based on the facts of a case, can appropriately facilitate communications between the parties and focus their interests to arrive at a mutually beneficial resolution of the dispute.
Not only does the mediator have to remain impartial throughout the process, the mediator must refrain from giving away his/her position in relation to the dispute and the decision gathering dust in its sealed envelope.
The second issue in relation to the combination of the two forms of dispute resolution involves the root of most conflict �C money.
It could be argued that the mediation part of the process would be relativity low cost, in comparison to traditional mediation, as the mediator would be fully aware of the issues involved in the dispute and in particular the specific issues on which the parties should focus. Notwithstanding this possible saving in mediation costs, the process is still additional to the original adjudication costs incurred by both parties.
In addition to the above concerns regarding the process itself, further questions arise with regards to the use of CEDR��s rules within the industry.
Currently, the Scheme for http: //www. driverconsult. com Construction Contracts is applied to all construction contracts that do not contain provisions for adjudication. With regards to those contracts that do contain adjudication provisions, including most standard forms, these also tend to refer to or at least reflect the Scheme. The resolution method selected by parties to settle disputes is often determined by the form of contract in use, which may prove to be a barrier for the widespread use of CEDR��s rules.
Finally, once over the difficulties associated with the adoption of CEDR��s rules and the parties�� agreement to their use, would parties actually be inclined to refer an adjudicated dispute to mediation?
In the circumstances that a party is reasonably confident with its case and believes that the adjudication has been successful, why would that party want to mediate?
Conversely, if a party to an adjudication concludes that its argument is not as robust as it might have originally thought, why would that party want the adjudicator,[link widoczny dla zalogowanych], who is fully aware of the weakness of the case, to act as mediator?
In either case, the temptation to open the envelope and put an end to the ongoing suffering caused by the dispute would surely be too much.
Advantages
Despite the discernible negativity above, it is not all bad news for the CEDR Solve Rules for Construction Adjudication.
With regards to the difficulties mentioned above concerning the ability of an adjudicator, having reached a decision, then to facilitate a negotiated settlement, this is very much dependant on the skill and competence of the adjudicator/mediator involved in the process.
As previously discussed, the attributes of an adjudicator and a mediator are very different, each process requiring different techniques, training and guidelines in order to be successful.
As demanding as this seems, CEDR��s Adjudication Panel boasts some of the best-known and most respected adjudicators in the country, who would be quite capable of ensuring that each dispute, having gone through adjudication and which is subsequently referred to mediation, is appropriately dealt with in order to facilitate the best possible resolution for each party.
Following the comments above concerning the widespread use of CEDR��s rules, this remains speculative and only time will tell if the process will be accepted by the industry.
If it is accepted, the question of whether a party would be inclined to refer a dispute that has been through the adjudication process to mediation still remains. As detailed above, the adjudication process has the ability to enlighten parties as to the strengths and weaknesses of their case. On the occasion that a party becomes confident with its case and believes that the adjudication has been successful, then mediation is unlikely to be pursued.
However, it is wrong to assume that every adjudication will polarise the parties�� expectations with such clarity. Granted, an adjudication may highlight the strengths and weaknesses of a party��s case, but it will also highlight the strengths and weaknesses of the opposing party��s case. More often than not, the course of an adjudication will turn some polarised ��black and white�� opinions into uncertain ��grey areas��. This uncertainty may just be enough to persuade parties to an adjudication to keep the envelope sealed and mediate.
If the mediation succeeds everyone is a winner. The parties are hopefully happy with a mutually beneficial solution, with business relationships hopefully repaired slightly following an adversarial adjudication, and the adjudicator/mediator enhances his/her status as a dispute resolver.
Conclusions
The CEDR Solve Rules for Construction Adjudication are still relatively new, and several questions remain unanswered:
? Will the rules be used?
? Would a party refer an adjudicated dispute to mediation?
? Is an adjudicator able to mediate the same dispute?
Only time will tell whether the idea can be accepted by the construction industry, and whether mediation following an adjudication can be successful. However, in certain circumstances, with the correct adjudicator,[link widoczny dla zalogowanych], it may just be the best option to put aside the impending decision,[link widoczny dla zalogowanych], attempt to rebuild relationships and try to arrive at a mutually beneficial agreement.
Finally, with regards to CEDR, it continues to innovate and remains at the forefront of ADR. CEDR should be commended for its forward thinking approach to the resolution of disputes and for its attempts to improve on an already successful adjudication process.
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