Construction Law: Disputes in Construction Industry - Essay Example

Running Header: Construction Law Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Introduction Construction projects are characterized by complexity and a large number of stakeholders who have diverging interests and this leads to emergence of disputes. Disputes in construction mostly occur due to compounding and escalating factors that lead to breakdown in the construction process. According to Ramsey and Telford (2007, p. 898), disputes are common in the construction industry and are often caused by delays, rework as well as schedule and cost overruns. Disputes can cause reduction in performance and productivity of involved individuals hence the need to come up with the most suitable method of resolving the disagreements. Rick (2010, p. 1) notes that experts have occasionally been utilized in order to resolve disputes in the construction industry. This is because they assist in identifying the most suitable and unbiased solution and thus enhancing the relationship between the involved parties. This paper is going to discuss the standards and codes of conduct that the experts apply in solving the dispute. Duties of the expert when advising and reporting to his or her Client According to the Law Society of New South Wales (2006, p. 1), an expert has a duty of avoiding situations that can lead to conflict of interest. Conflict of interest can arise when an expert attempts or decides to serve two or more concerns which cannot be executed together. This can make an expert to fail in observing the fiduciary obligations owned to clients. Anderson and Polkinghorn (2008, p. 178) state that conflict of interest may create information barrier and this can adversely affect the mediation process. Conflict of interest can arise where an expert has interests which conflict with those of the parties involved in the conflict. Additionally, an expert may have some interest in one or both clients and this can create a hindrance towards arriving at the most suitable solution. Therefore, the code of conduct require experts to avoid situations that may lead to conflict of interest hence make them to breach their duty to their clients. The code of conduct requires an expert to maintain confidentiality in relation to the information provided relating to client. While advising and reporting, the client may provide an expert with confidential information. According to McGeorge (2006, p. 62), construction dispute resolution process is private and confidential and thus the parties may not want certain private or commercial information facts about them being made to the public. An expert has a duty to confidentially preserve the information about the conflicting parties (Law Society of New South Wales 2006, p. 14). An expert can only reveal the information under the authorization of a client or when compelled by law. Furthermore, the standards of good conduct require an expert to obtain information about the client without being prejudiced of subsequent disclosure. Therefore, an expert has a duty of confidentially maintaining the information about the client. Polkinghorn (2008, p. 1) states that experts are expected to be neutral and impartial. This means that an expert should not support any side while advising the parties involved in a conflict. The expert should not provide objective and contradicting advice to the clients. This assists the expert to build trust with the parties and at the same time it ensures that he/she provides fair advice to parties involved in a conflict. According to Kathy (2009, p. 129), an expert is required to encourage client to obtain independent and professional information or advice where appropriate. In addition, while reporting and advising the parties involved in a conflict, an expert should not pressurize them to reach into an agreement or make a decision on behalf of any of clients. Furthermore, an expert is expected to support client by providing suitable advice in order to facilitate voluntary and free agreements. The Law Society of New South Wales (2006, p. 5) states that the expert must possess the relevant knowledge and skills as well as being competent enough in order to efficiently advise the clients. The Australian code of conduct requires the experts to continuously update their knowledge so as to develop their skills, concepts and professional competence. In addition, experts are expected to participate in professional development training in order to enable them to provide better consultation services to their clients. Furthermore, an expert must have the ability to apply the skills, knowledge and ethical guidelines while advising and reporting to the parties involved in the conflict. An expert must demonstrate his or her knowledge while advising the clients in the dispute. Therefore, the standard code of code requires the expert to display ethical understanding, knowledge and skills while giving advice to the clients. Also, an expert is expected to be competent enough so as to effectively advice and report to the clients. Considerations to be made by the Expert while reporting According to Sourdin (2008, p. 9), an expert should take into consideration the charges for the services provided during reporting. This requires an expert to provide an in depth explanation about any fees that would be charged to the clients in relation to the dispute resolution process. Furthermore, expert must also take into consideration any associated costs that he or she might have incurred during the process of resolving the dispute. Additionally, the mediator must obtain an agreement from the parties involved in the conflict as to how the fees charged would be shared and the means of payment. Moreover, the expert must consider returning any unearned fees while reporting about the dispute. This can occur when an expert may have collected some fees to act as a retainer fee before the start of the dispute resolution process. Mcllwrath and Savage (2009, p. 203) state that the expert should consider the method of calculating the fees related to the services offered. To do this, the expert must assess his or her qualifications, the level of experience and the magnitude of the dispute. The information about the fees should be incorporated in the report by obtaining a signed agreement from the parties which describe the fee arrangements. Therefore, the expert must take into consideration the charges related to the services provided and how the fees would be calculated. Smith and Smock (2008, p. 35) state that the mediator should take into consideration the decisions arrived from previous and similar disputes in construction. Past decisions provide a good basis for solving the dispute effectively hence the need for the expert to consider making a reference to previous resolutions when making the report. Additionally, the expert should assess previous case studies so as to obtain sufficient knowledge that will facilitate effective reporting process. According to Monroe, Beck and Applegate (2010, p. 649) the expert should also consult with other experts in order to obtain their views in relation to the previous dispute resolution initiatives. The expert should try to take into consideration the past decisions that have been made especially in disputes similar to the one in hand. This can assist the expert in building a good foundation for developing efficient opinions aimed at resolving the conflict. Moreover, past decisions assist the expert in identifying the means for enhancing the relationships between the conflicting parties as well as the negotiations strategies to utilize in order to solve the conflict. In addition, the expert is able to identify causes that may make the process to fail. The expert can incorporate previous resolutions by making a reference relating to the decisions that were made or attach previous resolutions in the report. Therefore, an expert should take into consideration past decisions when reporting in order to provide consistence and uniform decision in order to effectively resolve the dispute. The Australian code of conduct requires the expert to consider the interest of other parties who may be directly or indirectly involved in the construction dispute. According to Giessmann and Wils (2009, p. 4), the expert should take into consideration the interests of the third parties when reporting in order to obtain their support. Third parties can assist in enhancing communication with the conflicting parties hence they can facilitate the dispute resolution process. Additionally, the third parties can assist in controlling the conflicting parties and at the same time they can help in designing the most suitable solution for solving the dispute. Booker and Wilkinson (2010, p. 33) state that the expert is required to consider the recommendations provided by the third parties as well as their interests so as to arrive at a decision that is accepted by all the involved parties. Third parties have vested interest in the outcome of the negotiations and this means that they can provide essential support in solving the dispute. This can assist the expert in ensuring that the needs and interests of all parties are satisfied in the reporting process. The expert can incorporate the information relating to the interests and recommendations of the third parties by stating their needs as well as their suggestions in the report. Therefore, the standards of conduct requires the expert to take into consideration the proposals and the interests of the third parties so as to ensure that the method adopted to resolve the dispute is accepted by all the concerned parties. Reporting on Changed Opinion The code of conduct requires the expert to persuade the clients in relation to the changed opinion (Stark and Frenkel 2010, p.) The expert should try to persuade the involved parties to accept the new opinion. The expert can do this by convincing the parties about the merits associated with the new opinion. Persuasion can play an important role in influencing the parties to adopt the latest opinion. According to Richbell (2009, p. 53), persuasion provides the expert with an opportunity to give reasoned arguments whey he or she considers the new opinion as the most appropriate. The expert must convince the involved parties that the new opinion is the most desirable in order to solve the dispute effectively. Experts must begin by gaining back the trust of the clients and this can only be achieved by persuading them that the new view will produce the best results. The expert is called upon to create a framework through which the parties can interpret and understand the new opinion and at the same time provide documents that reinforce the new view. The expert can also request another expert to assist in reporting the change in relation to the opinion. According to Giessmann and Wils (2009, p. 6), providing a new opinion may make the parties involved in the conflict to lose faith with the expert hence the need for a third party expert to assist in reporting the new view. The novel opinion maybe extensively different from the previous opinion and this can make the expert to perceive that he or she may not completely persuade the parties to accept it. Thus, the expert is required to undertake the necessary steps to address the issue by requesting for appropriate assistance. Fisher (2011, p. 175) notes that third party experts can play an important role in changing the opinion held by the parties hence make them to accept the new outlook. A third party expert can provide effective consultation and information and this can encourage the parties to adopt and implement the new opinion. In addition, third parties can provide assurances to the clients in relation to the appropriateness of the new view. Moreover, they can come up with new and efficient communication techniques that can enhance persuasions and this can in turn motivate the participants to accept the new opinion. Therefore, third party experts can assist in clarifying the information related to the latest opinion and at the same time the reasons that led to the adoption of opinion. This can play a very important role in encouraging the parties in the conflict to adopt the new view. How a Client can Challenge another Expert The client can challenge the opinion of another expert through a court of law. According to Rick (2010, p. 3), the client can challenge the expert opinion if he or she can prove that the dispute resolution process lacked neutrality. Lack of neutrality in the process can lead to breach of the standards and codes of conduct which guide the experts. Kathy (2007, p. 1) states that neutrality is a key factor in the mediation process. The acceptance of the opinion of an expert is based on how well the outlook is fair and legitimate in solving a construction dispute. Therefore, the lack of neutrality can make an opinion provided by an expert to be less appealing and this can motivate a client to seek for neutrality by using the judicial system. Clients can perceive that the courts can deliver the required neutrality hence this can make the client to challenge the expert opinion. Law Society of New South Wales (2006, p. 7) notes that neutrality is a fundamental concept in resolving disputes involved in construction process. Lack of neutrality can create can make the expert to provide an opinion that is biased towards the interests of one party. This can in turn make the other party to challenge the opinion of the expert in a court. A client can challenge the opinion provided if he or she can prove that the expert was incompetent. According to Negron (2010, p. 1), an expert must possess the necessary skills and knowledge in order to effectively provide suitable opinions in relation to a construction conflict. Lack of adequate skills and expertise can make the parties involved in the conflict to receive unfair and inappropriate opinions. In addition, the opinion provided by an incompetent expert can vary adversely from the legal provisions and this can make it difficult for the parties to obtain the desired results. Smith and Smock (2008, p. 40) emphasize that the complexity associated with construction projects can create a barrier to the expert towards delivering the most suitable opinion. This is because of the fact that the expert may lack the necessary expertise and knowledge relating to the specific area under dispute hence he or she may end up providing inapt opinion. Therefore, the client can be forced to challenge the opinion provided by claiming that the expert was incompetent hence breached the code of conduct. Conclusion In conclusion, an expert has a duty to avoid situations that may lead to conflict of interest and at the same time the expert is required to be neutral and impartial when reporting and advising their clients. In addition, the expert has a duty of maintaining information relating to the client in secret. On the other hand the expert is expecting to take into consideration the decisions made in previous similar disputes as well as the recommendations of the third parties when reporting. Furthermore, clients can challenge the opinion of the expert in case the professional fails to observe neutrality or is incompetent. References Brooker, P & Wilkinson, S, Mediation in the Construction Industry, Spon Press, Melbourne. Giessmann, H & Wils, O, ‘Conflict Parties Interests in Mediation’, Bergh of Conflict Research, vol. 5, no. 1, pp. 1-14 Fisher, R 2011, Methods of Third-Party Intervention, Budrich Publishers, Framington. Kathy, D 2007, ‘Dispute Resolution and Neutrality’, RMIT, vol.3, no. 1, pp. 1-24 McGeorge, D 2006,‘ Dispute Avoidance and Resolution’, In CRC Construction and Innovation, pp. 1-63. Monroe, A, Beck, C & Applegate, A 2010, ‘Assessment of the Role of an Expert in Construction Disputes’, Construction Court Review, vol. 48, no. 4, pp. 646-662. Negron, D 2010, ‘Dispute Resolution in Construction Industry’, In Australian Law Office, vol. 4, no. 1, pp. 1-4. Polkinghorn, A 2008, ‘Managing Disputes in Construction: Leadership and Third Party Principles’, Conflict Resolution Quarterly, vol. 26, no. 2, pp. 167-197. Ramsey, V & Telford, T 2007, Construction Law Handbook, Thomas Telford, London. Richbell, D 2009, Mediation of Construction Disputes, Blackwell Publishers, Oxford. Rick, A 2010, ‘Evaluation within Mediation and the Ideal of Neutrality’, In Conciliation Strategies, pp. 1-11. Rick, T 2010, ‘Evaluation within Dispute Resolution and the Ideal of Neutrality’, In Dispute Resoliution, pp. 1-11. Smith, L & Smock, D 2008, Managing Mediation in Construction Disputes, Endowment Publishers, London. Sourdin, T 2007, ‘Austrarian National Mediator Standards’, Practice Standards, vol.1, no. 1, pp. 1-23. Stark, J & Frenkel, D 2010, ‘The Work of Experts in Persuasion’, In Disputes in Construction, pp. 1-29. The Law Society of New South Wales 2006, ‘Ethics and Conflict of Interest and Duties’, In Law Society of New South Wales, pp. 1-69. Read More