Conflict Avoidance Toolkit

Prepared by the Conflict Avoidance

Coalition Steering Group
Conflict Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Contents

Overview 3-4

Conflict Avoidance Coalition Steering Group 5

Pre-Contraction Preparation 6

Dispute Avoidance 7

Early Intervention 8

Amicable Resolution 9

Dispute Resolution 10

Conflict Avoidance Pledge 11

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Conflict Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Overview

On an ideal project disputes between the delivery teams will never arise however, the reality is not so simple.

The construction industry is one of the most disputatious of all; disputes regularly occur during or after
completion of construction projects. It is therefore sensible to develop and adopt a strategy that can sensibly
manage not only the disputes, but also the common issues that can escalate into a dispute. This requires action
much earlier than simply responding to a dispute when it has arisen - it would be beneficial to avoid them in the
first place.

A proactive strategy for the completion of a project will help with avoiding conflicts in the first instance and will
include a thorough assessment of the risks for disputes occurring with agreed procedures for dealing with
differences of opinion amicably.

However, conflict cannot always be avoided. When a difference of opinion arises it is practical and sensible for all
parties to recognise that a dispute may be emerging and that there are methods available to deal with the
matter before it escalates, legal costs are incurred and commercial relationships suffer.

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Conflict Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Overview continued…
The Conflict Avoidance Coalition Steering Group (CACSG) has prepared this Toolkit to provide information about
measures which help avoid disputes arising and, when differences do arise, techniques to deal with issues early,
quickly and cost effectively.

The aim of the toolkit is to educate people working across the industry about the lifecycle of conflict avoidance
and early intervention to prevent disputes. The aim is to help reduce the damage that disputes can cause to:
finances, project delivery, brand reputations and commercial and personal relationships.

This Toolkit outlines the differences between dispute avoidance and early intervention.

• Dispute Avoidance is about stopping the smoking embers of a dispute by bringing them to the attention of
people who can do something about them.

• Early Intervention is about snuffing out the smoking embers before they ignite into a fire.

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Conflict Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Conflict Avoidance Coalition Steering Group (CACSG)

This toolkit has been prepared by six leading institutions and two of the UK’s biggest employers in
construction and engineering. They have led a coalition which has the objective of helping the industry tackle
the rising financial costs of disputes as well as the growing dissatisfaction surrounding established forms of
dispute resolution. The coalition includes:

• Royal Institution of Chartered Surveyors (RICS)

• Institution of Civil Engineers (ICE)
• International Chamber of Commerce (ICC) United Kingdom
• Royal Institute of British Architects (RIBA)
• Chartered Institute of Arbitrators (CIArb)
• Dispute Resolution Board Foundation (DRBF)
• Chartered Institution of Civil Engineering Surveyors (ICES)
• Transport for London (TfL)
• Network Rail (NR)

The Conflict Avoidance Coalition Steering Group (CACSG) promotes the value of conflict avoidance and early
intervention techniques and the use of these in construction and engineering contracts.

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Dispute Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Pre-Contract Preparation Thorough preparation of project documentation, and appropriate risk allocation, is the first step
in conflict avoidance

Protecting Against Future Conflict Key Features

Well drafted contracts, which are easy to understand and include practical systems for
avoiding and resolving disputes at an early stage, help to develop a culture of collaboration
between the parties. CLARITY - The contract should be written in plain, simple English, avoiding legal terms and jargon. The
objective is that the contract should be understood by all the people using it.
Construction and engineering disputes can be about straightforward issues. They
Where contract negotiations fail to include adequate methods for dealing with disputes early, APPLICABILITY - The contract should be suitable for the type of works and location it is intended to
they create a risk that a minor issue will escalate quickly to adjudication, arbitration or cover. It should avoid unnecessary clauses copied from forms which do not apply to the project.
litigation. When this happens, meaningful dialogue often stops, positions become entrenched
and legal costs mount out of control. Eventually the minor issue can develop into a far- EARLY WARNINGS - The contract should include obligations for parties to identify and communicate
reaching conflict, which can put the effective delivery of the project at risk. problems early, and commit to achieving quick and amicable resolution. The parties should be
required by their contract to work together to find solutions and establish necessary actions to the
Construction and engineering disputes can be about straightforward issues. They can also be mutual benefit of all those involved.
immensely intricate and involve complex questions of law. Deciding the right method for
avoiding and resolving differences requires careful thought and should be a key part of the GOOD MANAGEMENT - The contract should provide specific tools for managing the project risks in
contractual negotiation process. Most situations, which can give rise to disagreements and full- the way which best meets the objectives of the particular project. Control of risks can be achieved
blown disputes, can be avoided through well drafted contracts and a commitment by parties to through the use of a continuously updated programme, and early warning procedures.
embrace dispute avoidance and early intervention techniques - which can be incorporated
into the contract terms. VIABLE CEP - The contract should include a viable compensation event procedure (CEP) which aims to
establish the cost and time effects of changes at the time each change occurs. The procedure should
A well-designed dispute avoidance procedure in a contract helps parties to engage in open and enable parties to either agree the level of compensation for the change, or identify the reasons for
honest communications. It should provide an agreed system for identifying problems early and any disagreement at an early stage.
dealing with them in an environment that is not adversarial and encourages compromise and
avoidance of escalation over formal dispute resolution.

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Dispute Avoidance Toolkit
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Dispute Avoidance Parties can utilise avoidance or early warning systems which identify potential conflict and
prevent disputes from occurring

Identifying Potential Conflict Key Features

A forward-looking approach to risk management and avoiding confrontation saves
money and ensures projects are delivered on time and on budget. When used in
accordance with agreed principles and rules for co-operation, a viable dispute avoidance EARLY ENGAGEMENT - All parties should agree and engage in the Dispute Avoidance process
system will reduce numbers of potentially costly disputes and settle emerging problems early, and all parties should be properly informed and allowed to be heard
at an early stage. It also helps to maintain positive working relationships between
employers and the supply chain. REDUCED RISK - Dispute Avoidance focusses on "horizon scanning" and identifying risk areas
so that parties can deal with potential problems before they happen. It can be used through
Dispute avoidance involves setting up a system that explores potential risks connected the lifetime of a project to continually spotlight problem areas and/or assess how risks already
to a project. It often includes the use of contractual procedures which are designed to identified are performing over time
mitigate problems arising and settle differences before they crystallise into formal
disputes. FLEXIBILITY - Contracting parties can agree the procedure and timetable for including Dispute
Avoidance methods into their contract in advance, and can agree any changes to it during the
Often, dispute avoidance systems entail routine information gathering by impartial course of the project
professionals. This normally begins early on, even before a contract is signed. It can
sometimes continue through the lifetime of a project, e.g. were parties desire a neutral PREVENTION – Dispute Avoidance ensures parties are wholly informed and cognisant of all
insight into how identified risks are performing over time. Its primary aim is to identify matters relating to the project. It is usually underpinned by a commitment by the parties to
emerging issues, and ensure that there is a coherent understanding of the risks across collaborate and ensure conflict situations do not arise and, if they do, that they are resolved
the relevant project team. quickly and amicably

A viable dispute avoidance system will always involve open and honest communications CO-OPERATION - Dispute Avoidance helps parties to work collaboratively. It incentivises them
between parties on how to deal with potential risks. Parties who regularly connect with to strive for a negotiated resolution of emerging issues before they become disputes
each other freely and openly are more informed and able to tackle problems
collaboratively, without fear of negative consequences.

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Dispute Avoidance Toolkit
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Early Intervention Parties can adopt a procedure that fixes problems early and enables them to retain control of
decisions and outcomes

Identifying and Dealing With Emerging Disputes Key Features

Disputes cannot always be avoided. When differences emerge, it is sensible to use
procedures which facilitate an early review and disposal of the disputed issues. Early
intervention techniques are effective at preventing disagreements from becoming full- EARLY ENGAGEMENT - When disputes begin to emerge, parties should engage a process to
blown disputes. intervene early. Any party to a contract should be able to invoke early intervention procedures
set out in the contract
Early intervention mechanisms safeguard against commercial managers and directors
losing the capacity to choose how differences will be resolved as they are moved into PARTIES RETAIN CONTROL - Early intervention techniques ensure commercial
the hands of lawyers. directors/managers retain involvement in matters and decide outcomes. Parties can make
informed decisions that stop disputes from escalating to adversarial procedures
Generally, the procedure would involve an impartial review of issues on which parties
do not agree. The review would be undertaken by an independent person who is a FLEXIBILITY - There are many varieties of early intervention techniques that parties can choose
highly credible and experienced subject matter expert. He or she will usually engage from. Procedures such as CAP and ENE can be adapted to meet specific priorities of contracting
with all relevant parties and undertake an investigative role. In some cases, typically parties
where issues are complex and/or involve significant amounts of money, parties can
choose to use a panel of independent persons. COST EFFECTIVE - Parties can agree timetables and procedures that suit them
Parties can set up procedures on a "pay as you go" basis rather than a standing cost. The cost
Parties can opt for early intervention procedures that yield binding or non-binding of the procedure, and who pays, can be agreed at the outset (usually settled in the contract)
recommendations. Where they are non-binding, recommendations can be used to
inform discussions between the parties and stimulate settlement. In addition, parties AGREED OUTCOMES - Parties can choose the type of outcome they prefer, e.g. a binding or
can choose a procedure where, if either party declines to accept a non-binding non-binding recommendation. Parties can decide that non-binding recommendations will
recommendation, they will be required to provide written reasons. This can dissuade a become binding, e.g. if not challenged after a specified time.
party from unilaterally declining a recommendation simply because they do not like it.

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Dispute Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Amicable Resolution Parties can opt for mediative method help them to resolve their dispute that is private and not
adversarial

Resolving Established Disputes Collaboratively Key Features

In cases where parties can neither avoid a dispute, nor resolve it early and quickly,
CLARITY -Provides opportunity for parties to set out their case and understand the other
mediative procedures exist that enable them to achieve a settlement without going
side's point of view.
“eyeball to eyeball” in a confrontational procedure such as arbitration or court action.
EXPERTISE -The person appointed to facilitate an agreed outcome will be an expert in the
These procedures are usually private and confidential. They involve the appointment of
subject which is at the heart of the dispute. Expertise lends credibility to the mediator,
neutral subject matter experts who help both sides to negotiate their way to an agreed
conciliator, etc. and gives the parties confidence in the process
settlement.
PRIVACY - The procedure and outcomes of amicable dispute resolution are inherently private
Parties would be wise to use a mediative procedure that uses a third-party neutral
and confidential. Mediative procedures allow parties to decide what information they will
(mediator, conciliator, etc) who has a track record in the subject matter of the dispute.
share with their opponents.
This will give the parties confidence in the process. It ensures that the mediator,
conciliator or similar, is suitably equipped to understand matters that go to the heart of
SPEED – Amicable resolution is usually considerably quicker than litigation. When managed
the dispute and can, if required, provide the parties with knowledgeable and effective
correctly, e.g. pursuant to procedural rules and timetable it is usually cheaper too
guidance on settlement options.
FINALITY – Agreed outcomes facilitated by a neutral subject-matter expert will be satisfactory
Mediative procedures can be employed quickly and effectively. They are remarkably
to all parties and end dispute.
cost-effective and will usually be significantly cheaper than adversarial procedures such
as courts or arbitration.

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Dispute Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Dispute Resolution Parties can opt for final and binding determination of their disputes that is quicker, cheaper and
more private than the Courts

Determining disputes quickly and finally Key Features

In cases where parties can neither avoid a dispute, nor resolve it early and amicably,
FINALITY - Determinative procedures result in binding outcomes and will usually end disputes
determinative procedures exist that enable them to achieve a settlement quickly and
cost-effectively.
EXPERTISE - The person appointed to determine dispute would normally be an expert in the
subject which is at the heart of the dispute. Expertise lends credibility to the arbitrator,
Procedures, such as arbitration, adjudication and expert determination involve parties
adjudicator, expert, etc and gives the parties confidence in the process
putting their case to a third-party decision-makers who are highly experienced in the
disputed subject matter. Decisions are usually binding, either in the interim or with
PRIVACY - The procedure and outcomes of dispute resolution are inherently private and
immediate and permanent effect. Parties will often have a contractual and/or statutory
confidential
right to refer their disputes to the binding decision of an adjudicator or arbitrator.
SPEED – Determinative procedures such as adjudication are considerably quicker that
These procedures are optional (parties can jointly choose to use other early intervention
litigation. Arbitration and expert determination, when managed correctly, e.g. pursuant to
or dispute resolution methods). When using adjudication or arbitration, parties would
procedural rules and timetable can be comparatively quick and cheap
be wise to appoint an adjudicator or arbitrator who is trained in the relevant procedure
and is a recognised expert in the subject matter in dispute. Where parties opt for an
CHOICE - Parties can agree the identity of their adjudicator, expert or arbitrator, or choose an
appointment by a third party, they should choose an appointing body which ensures the
appropriate organisation to appoint someone who is suitably qualified and impartial, and is
appointed person is suitably qualified and impartial.
available to act as and when the parties require
Adjudication, when utilised effectively, can be swift - thus saving parties time and
money. It provides a decision which is binding in the interim.

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Conflict Avoidance Toolkit
Avoiding Conflicts and Resolving Emerging Disputes

Conflict Avoidance Pledge

In January 2018, the Conflict Avoidance Coalition Steering Group (CACSG) launched the Conflict Avoidance Pledge. The purpose of the Pledge is to
drive behaviour change in the way relationships and disputes are managed throughout the construction and engineering sector. A list of the
organisations who have signed the Pledge is available here.

The Pledge is the focal point of the Coalition’s campaign to reduce the financial and other costs associated with disputes. This involves promoting
cooperation between contracting parties; and helping people and organisations to understand and use conflict management measures to reduce
numbers of disputes and ensure infrastructure and property development projects are delivered on time and on budget.

The CACSG has prepared this Toolkit to provide information about measures which help avoid disputes arising and, when differences do arise,
techniques to deal with issues early, quickly and cost effectively. The purpose of the toolkit is to educate people working across the industry, at
every level, about the lifecycle of conflict avoidance and early intervention to prevent disputes. The objective is to help reduce the damage
disputes cause to commercial and personal relationships, finances, project delivery and brand reputations.

For more information about the Pledge, see who has signed it to date and to sign up, go to www.rics.org/capledge

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