CONSTRUCTION DISPUTES

Sometimes things just don't work out, and you need some help to resolve your building and construction dispute.

The good news is that the construction industry has options for speedy, cost-effective dispute resolution.  Find out more about these options below.

 

This is also known as sorting things out yourself!

Trying to have a chat with the person on the other side and working it through will be your most cost-effective option.  We find that often issues can arise because the construction contract isn't clear about responsibilities (or where there is no contract at all).  If you want to try negotiating any dispute, we recommend:

  •  First understanding your legal position.  What does your contract say, or if you don't have a contract, what's the law relating to your situation.  Watch out for any formal notice periods you might need to meet in raising a claim.  We can help with letting you know where you stand.

  • If you are compromising at all, try to fix any issues with the contract at the same time.  You don't want to have to be dealing with the same issues several times in a row.

  • If you reach agreement, get the agreement clearly recorded in writing so that each party now knows what is expected.

1.  Negotiation

 

The Disputes Tribunal is designed to be a place where you can resolve small claims much more cheaply than other dispute resolution options.  It can hear claims up to $15,000 (or, if everyone agrees, $20,000).

It is much more informal than other processes, and you are actually not allowed to have a lawyer represent you (although we do have many clients who like some help getting their paperwork together ahead of time -- let us know if you'd like more information about this).

The fee for a hearing ranges from $45 to $180, depending on the size of your claim.

There are no judges, but there is instead a referee who may make a decision on the dispute.  A word of warning -- the Disputes Tribunal deals with all sorts of issues, most of which are not building disputes.  The referees are frequently not experts or trained in building and construction law.  If you have an issue that depends on a particular point of construction law, you may be better off with a specialist construction dispute forum.

2. Disputes Tribunal

 

 

Mediation is an informal negotiation process, where a third party (the mediator) assists the parties to reach an agreement.  The skill of the mediator helps each party see the other's point of view, defines exactly what is the problem, and assists them to reach agreement.

Mediation is best when both parties are open to finding a solution, and want an ongoing working relationship.  It is non-binding, so if it can result in no outcome if the parties don't agree to a solution.

3. Mediation

 

 

Arbitration is much more formal than the options above, and in many ways is like going to court -- with the very large, valuable difference being that the arbitration is confidential.

Arbitration is entered into by agreement -- you can't force someone to go to an arbitration unless your contract says that they will resolve disputes by arbitration.  The arbitration process is governed by the Arbitration Act 1996, and the decision (award) is binding and as enforceable as a Court judgment.

Because an arbitration is a full, formal, legal process, it can be expensive, and can take a long time -- often between six months to a year.

4. Arbitration

 

 

Adjudication is a specific way of resolving building and construction disputes.  It is an extremely fast process compared to arbitration or court (the whole process can take between 6-8 weeks), and far more inexpensive (although naturally more than the Disputes Tribunal option).  

All parties to a construction contract have the right to use adjudication under the Construction Contracts Act 2002.  It is particularly useful for dealing with payment disputes and improving cash flow.  

Adjudication can be a fast-track process for all amounts of disputes -- from small claims right up to claims worth millions of dollars.  For small claims, the Building Disputes Tribunal provides a fixed fee arrangement for low value claims - more details can be found here.

The person deciding the dispute (the adjudicator) is either chosen by the parties or appointed by particular organisations approved by the Minister for Building and Housing.  This has the distinct advantage (in our view) that the adjudicator is experienced in both building and construction projects, and the particular laws governing building and construction.  

You don't necessarily need a lawyer to put together your adjudication claim -- the Building Disputes Tribunal has a range of templates which you could complete yourself (available here).  We can help with a range of services relating to an adjudication, right from reviewing documentation you have put together yourself, through to a full 'silver-service' option of documenting and managing the claim for you.  Please feel free to get in touch to have a chat about what you might need.

5. Adjudication

 

 

We know this goes against the traditional view people have of lawyers, but we really feel that court is an absolute last resort for dealing with building and construction issues.

Going to court can be terrifically expensive and take an incredibly long time.   The building and construction industry has the advantage of other dispute resolution options -- all of which are likely to result in a better outcome than a court process.  

6. Court

 

 

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