Disputes

dispute resolution

Dispute Resolution in the New Normal

The past year has seen radical changes in the way we live our lives,  socialise, work and play. Dispute resolution has been no exception in this regard. Many disputes have been resolved by the means of virtual or online hearings. Parties stay in different locations or their own homes and resolve their disputes remotely.

Before the arrival of COVID-19, there were 10 million people using zoom worldwide. By April 2020, there were 300 million users using the platform. This is great news for Zoom’s shareholders if nothing else (source: unifysquare.com).

HDP’s Head of Contracts and Commercial, Bill Bordill, took part in a discussion on the use of virtual hearings and adapting to the ‘new normal’ in the UK statutory adjudication system. Panellists agreed the pattern has opened up a new way of dealing with disputes. They concurred it is now likely that many more disputes will be resolved this way in future.

Many dispute resolution forums allow for virtual hearings now. These include Abu Dhabi Global Markets, who notably proclaimed themselves as one of the first tech-enabled dispute resolution centres. In London, a similar standard was set by the International Arbitration Centre. The centre focussed heavily on the security systems in place to ensure secure hearings were a feature from their opening. Other forums such as IDRC allow for virtual hearings and the DIFC in Dubai were holding remote hearings in 2017, long before COVID.

In the courts in the UK, the country’s first ‘zoom trial’ was much publicised earlier in the year. Paul Darling OBE QC represented clients in a virtual forum, using the video-conferencing platform, ‘Zoom’. One of the biggest concerns often cited is that parties will not be able to interact with each other as they would in a physical environment. There are fears that parties will not have a fair hearing or be on a fair footing if not in a neutral physical environment. Rules of 'natural justice' have been questioned.

Another concern is that of influence; the worry that in an uncontrolled environment, witnesses may be ‘fed’ answers to questions or influenced in other ways. In a non-COVID scenario, this can be resolved by sending a third, independent party to be with the witness. It is slightly more difficult to control in the current environment.

Nevertheless, Paul Darling noted, “What the trial has proved beyond reasonable doubt, however, is that none of the intimacy of the physical courtroom is in fact lost with a remote trial. Rather, video sharing can in fact heighten our ability to dissect testimony, whilst opening up proceedings to the public.”

Another concern highlighted has been that of security. Zoom in particular, as one of the most popular platforms, has been a victim of security attacks. There have been high-profile issues with the ability of the platform to prevent hackers or others accessing meetings:

https://www.theverge.com/2020/4/3/21207134/zoom-recordings-exposed-thousands-identical-naming-search

https://www.tomsguide.com/uk/news/zoom-security-privacy-woes

Equally, commentators have noted that even a modestly tech-savvy operator ought to be able to remove such risks. They only need enable the relevant settings on the platform, before a hearing begins.

Procedure

Under most systems of Arbitration law, usually there is nothing to preclude you using technology. The Arbitration stays the same, the rules and procedures are the same.

Erik Schafer, one of Germany’s leading arbitrators noted long before the arrival of COVID, on the subject of technology in arbitration: “in the vast majority of cases all participants will collaborate as required”. He notes that this does need a consensual approach - parties need to agree to the process.

Why bother?

Notwithstanding the current virus, there are many reasons to consider remote hearings, in the same way there are many reasons to consider other uses of technology.

  1. The cost should reduce, with no need to hire rooms, provide catering, welfare facilities etc.
  2. There will be no need for travel and accommodation costs and the associated costs of travel time.
  3. The convenience of a remote hearing means it should be possible to arrange the hearing at more convenient times. This should allow those required to attend to plan other activities around the hearing, rather than block full weeks and months of time out of their diaries.
  4. Finally, there is the benefit to the environment. Many air-miles are spent in travelling between arbitrations and projects around the world. By eliminating the extensive need to travel, the carbon footprint of arbitration will reduce.

Practicalities

To allow such a hearing to happen, a key requirement is a stable internet connection. Even the most experienced broadcasters have, at some point in recent months, experienced a lost line or a poor connection. The connection for all users should be strong.

Users of the system should be able to be heard and hear. So, good quality audio, and a microphone separate to the default laptop microphone will be helpful.

A system should be ‘platform agnostic’. Try to avoid systems that favour one manufacturer or another. Microsoft for example, seem to favour their own Windows operating system, allowing only limited functionality on devices not running Windows. The website ‘Capterra’ can be very helpful for businesses trying to identify which platform to use.

System choice should be determined on the functionality and meet security requirements outlined above. Most systems are now able to provide a secure discussion. ‘Zoom’ in particular have been keen to close the various loopholes highlighted earlier in this piece.

The ability of certain platforms to provide breakout rooms has been noted as a particular advantage. Such rooms enable private discussions during a hearing or as directed by a tribunal. Surprisingly few systems seem to offer such functionality, but there are at least two that we are aware of.

Recording and storage should be a consideration when it comes to security. If a hearing or meeting is recorded, where is the data stored, is it secure? As an example, in surveys, Teams comes out well on security, if set up correctly.

Like so many choices in life, it seems choice of platform and whether to conduct a dispute resolution process virtually or not will be a trade-off. The loss of ability to see parties face-to-face is compensated for in other ways. Different platforms offer different strengths and weaknesses. However, it seems that no matter what the future holds, the world has become far more comfortable with working from home. As more money becomes available for research and development, the technology will improve commensurately to help us to do so.

Hewitt Decipher Partnership’s expert consultants have been both managing disputes and acting as experts in dispute resolution proceedings for many years. We have also quickly adapted to managing our services and managing our client’s expectations remotely, wherever the projects and clients may be located.

This article was written by HDP Director, Paul Gibbons. If you'd like to speak to Paul about any help that you require, please get in touch


construction disputes

How Technology can help to avoid Construction Disputes

Construction is lagging behind.

This is not our opinion, but that of renowned research and consultancy organisation, McKinsey & Co. The industry’s productivity rate is lower than most other sectors almost universally around the world. With a few notable exceptions, such as China and India, productivity is poor and growth is slow. For an summary, check out McKinsey’s report Reinventing Construction.

Why is this?

There appear to be a number of reasons - not least our specialist subject, construction disputes. But the challenges posed by the construction dispute are compounded by poor management, poor organisation of data and limited collaboration and communication. Disputes need not occur and if they do, they need be as costly as they are.

We’ve mentioned before, in our 10 Top Tips blog, ARCADIS’ report which highlights the huge cost of disputes. The McKinsey report also notes that large projects are typically 20% over time and 80% over budget. In the US, disputes cost over $12bn each year. In the United Arab Emirates, where construction disputes are notoriously costly, a similar figure would equate to $248,400,000 or more than AED 9M lost each year to dispute resolution.

What Can We Do?

Adoption of technology and improvements in innovation and communication would be a positive first step. It may surprise some readers to find that at Hewitt Decipher Partnership, we don’t want to spend excessive amounts of time resolving disputes. It isn’t productive and doesn’t make for happy clients. If you do find yourself in a dispute, it is far better to be in a good position to resolve that dispute and minimise the cost, than to have to spend more than is necessary.

Technology

There are a number of systems available, but hitherto, a lot have been focussed on one aspect of construction or geared towards solving one problem. For example, Oracle’s primavera provides a great project planning tool with potential for planning in resources and cost, but rarely is it used collaboratively or pro-actively during the project.

There are tools for managing documentation and site records. Software is available for design and safety management. Rarely though, do all the stakeholders come together and invest in a coordinated fashion in the right software for the job.

Investing in technology is important. Records, plans and schedules, design documents and anything that might affect progress should all be coordinated. Whilst this article does not seek to recommend a particular software over another, there is useful research material out there. For example, this article from venture capital investors, Talis, looks at products which have the potential to create change in our sector. There are events, such as ‘project controls expo’, ’futurebuild’ and ‘glimpse of the future’. Each seeks to showcase innovators and technology providers in construction technology, “ConTech”.

Other Innovations

There are a host of other innovations we have seen in recent years. The use of virtual reality to re-create construction projects, the use of 4D modelling to identify where and how site instructions and variations led to a change in programming and cost, drones for surveying - to name just a few. As time progresses and technology is adopted, it is likely that the cost of dispute resolution will reduce. Our aim at Hewitt Decipher Partnership is to harness that technology and minimise costs to our clients.

If you have already sought to harness technology organise data before you need us, our job is likely to be easier and less time consuming. The result will be a less costly and more efficiently resolved dispute. We urge clients to seek out technologies to better manage records, improve communication between stakeholders and reduce the potential cost of construction disputes.

Hewitt Decipher Partnership’s expert consultants have been supporting clients though dispute proceedings for many years. We know how to comply with good practice to minimise dispute and if they do occur, ensure that they are resolved in a timely and cost-effective manner. Can we help you? To find out how, get in touch.


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disputes

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Welcome to the first Hewitt Decipher Partnership blog of 2020. This month I’d like to talk about disputes and take the findings of HKA’s report, Claims and Dispute Causation – a Global Market Sector Analysis a step further than I did in last months’ blog, which concentrated on the importance of adequately expressed claims.

I also wish to refer to ARCADIS’s Global Construction Disputes Report 2019Between them, these reports between cite the following reasons for projects going wrong and things escalating to disputes:Read more


claims and disputes

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The report highlights the top 30 causation factors for disputes:Read more