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0330 133 6176

Nottingham | Portsmouth | London | Bristol

gnitlusnoc.edisekal%40ecivda

Contact us

JCT contract dispute resolution

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As a business operating in the construction industry, you will know all too well that disputes are common. Most projects encounter budget and delay issues in their lifetime, and their scope may change drastically once work is underway. If these matters are not resolved quickly and fully, they can lead to complex disputes and serious financial implications for your business.  
For contractors and subcontractors operating under Joint Contracts Tribunal (JCT) contracts, we appreciate that resolving a dispute can seem challenging. You may be unsure about the right method for bringing a dispute to an end or how you might begin the dispute resolution process.
Dispute resolution is about understanding when a dispute has arisen or escalated, and what techniques are available to bring the dispute to a satisfactory end. In this article, we look at the main methods of dispute resolution in the context of JCT contracts. If you require personalised advice about dispute resolution, please do not hesitate to contact our team.

Dispute resolution procedures

The JCT family of contracts are some of the most widely used in the building industry and are relied upon when handling a construction dispute. Although similar, there are some differences between the various JCT standard forms. In this article, we refer to the JCT Design and Build Sub-Contract Agreement and Conditions 2016. The contract provides the following procedures available for dispute resolution:
● Negotiation● Mediation● Adjudication● Arbitration● Legal proceedings

Negotiation

Negotiation is explained within Supplementary Provision 6 of the contract and describes the process whereby the parties nominated in the Sub-Contract Particulars will try to resolve any matter that could potentially rise to a dispute. Direct negotiation gives power to the parties to reach an amicable decision that works for them.
Often overlooked by many, negotiation is one of the simplest ways to resolve a construction dispute. Have a look at this case study where a dispute was successfully resolved by negotiation.

Mediation

Mediation is an informal process in which a neutral third party assists the parties in finding an acceptable settlement and bringing the dispute to an end. Mediation can be successful in preserving a relationship between both parties as there must be a mutual understanding for this resolution method to work. Reaching a decision outside of court, for example, also means both parties are more likely to be satisfied with the outcome.
While it is not compulsory to use mediation, Clause 8.1 of the contract states that ‘serious consideration’ should be given to this form of dispute resolution if the parties cannot resolve the matter through negotiation.
Mediation may be used at any time during the construction project, whether that’s after completion, or at any other time up to a hearing. The mediator will typically be appointed by both parties and will act as a facilitator to assist with communication between the parties.

Adjudication

Adjudication is a cost-effective and efficient way to settle a JCT contract dispute. The JCT contract incorporates the provisions of the Scheme for Construction Contracts and either party has a right to refer a dispute to adjudication at any time.
Unlike a mediator who is impartial and will not make any judgements, the role of an adjudicator is to make a binding decision based on the submissions of both parties. This decision should generally be made within 28 days of the referral and is binding unless a conclusion is reached through agreement, arbitration, or legal proceedings.
The JCT contract details how the parties can commence the adjudication process and who the adjudicator will be. The adjudicator will either be identified within the contract or will be chosen by the nominated body named in the Sub-Contract Particulars.
Settling a dispute through adjudication can ensure a construction project is not put on hold while a resolution is found. Details about the adjudication process – including serving the adjudication notice and referral notice – can be found here.

Arbitration

Arbitration is a process whereby disputes are settled by a private tribunal. All evidence and submissions will be considered by a decision maker, known as the arbitrator.
To begin the arbitration process, a notice will be served from one party to the other, which requires an agreement on the appointment of an impartial third party – the arbitrator. Both parties must agree on the arbitrator, however, if this decision is not mutual within the 14 days following the notice, the arbitrator can be appointed on the application of either party by the person identified in the Sub-Contract Particulars.
The arbitrator will decide the dispute and their decision (also referred to as an award) is legally binding and enforceable.
The rules around arbitration are detailed in Article 5, with the procedures and roles of both parties explained within Clause 8.3 of the contract. If construction disputes are to be handled using this resolution method, it must be stated in Article 5 and the relevant clauses. By doing so, the parties avoid using legal proceedings to resolve any disputes that may arise.

Legal proceedings

Any disputes which are put forward for legal proceedings are generally dealt with by the Technology and Construction Court (TCC). A judge can deal with complicated issues, and the decision is legally binding and enforceable. You will normally be required to comply with the pre-action protocol for construction and engineering disputes before you can commence legal proceedings. 
It’s important to note that if there is an arbitration clause within the contract and both parties have agreed to resolve a dispute via this procedure, then legal proceedings are not an option. As such, it is crucial that the provisions in the JCT contract are considered very carefully from the outset, as this could later determine what resolution methods are available.

Contact our JCT Contracts Dispute Resolution Consultants

If you are a contractor or subcontractor looking for advice and support concerning a construction dispute, for a free, no-obligation discussion with a construction dispute specialist, please call us now on 0330 133 6176 or via email at gnitlusnoc.edisekal%40ecivda.
This article is intended to give a broad overview of the JCT contract dispute resolution procedures. It does not constitute legal advice. If you require specific legal advice, you should contact our team who can help you based on your circumstances.

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Lakeside Construction Claims Consultants LtdCompany Registration: Registered in England, company number 1409155Registered Address: 124 City Road, London, EC1V 2NX

© 2022 Lakeside Construction Claims Consultants Ltd.

All rights Reserved

We help contractors and subcontractors manage claims and resolve disputes.


Lakeside Construction Claims Consultants LtdCompany Registration: Registered in England, company number 1409155Registered Address: 124 City Road, London, EC1V 2NX

© 2022 Lakeside Construction Claims Consultants Ltd.

All rights Reserved