Whilst providing your services as a construction business, it is not uncommon to get into disputes with your clients or contractors. You should always attempt to resolve disputes in a time-efficient, cost-effective manner and preserve client relationships. Hence, when conflicts escalate, you may consider going to the Building Disputes Tribunal. This article will outline:

  • what the Building Disputes Tribunal is; 
  • what issues the Tribunal can deal with; and
  • the dispute resolution methods available from the Building Disputes Tribunal. 

What Is the Building Disputes Tribunal?

The Building Disputes Tribunal (BDT) is a forum that offers a wide range of private dispute resolution processes to resolve building or construction disputes. These processes aim to resolve conflicts effectively, efficiently, and at a low cost compared to litigation. Any individual, business, or company in a construction contract is entitled to use and access the BDT’s dispute resolution processes.  

The BDT can also provide potential claimants, such as your construction business, guidance on the most appropriate and effective dispute resolution process for your particular dispute.

What Claims Can My Construction Business Bring to the Building Disputes Tribunal?

The Building Disputes Tribunal covers a full range of claims. These claims can range from amounts of $10,000,000 to less than $5,000.   

Further, one of the most prevalent claims that the Tribunal deals with is building disputes. These disputes fall into two categories:

  • technical disputes; and
  • merits-based disputes. 

Technical Disputes

Technical disputes arise when a party fails to comply with requirements for making and responding to payment claims for construction work. For example, a payment claim must:

  • be in writing;
  • identify the construction work done, and the relevant period to which the payment relates; 
  • state an amount and the due date for this payment; 
  • indicate how this amount was calculated; and
  • include written documentation of the process for responding to the claim, and the consequences of not responding. 

Merits-Based Disputes

A merits-based dispute refers to disputes concerning the construction contract that governs the relationship you have with contractors or clients. These disputes may relate to: 

  • a failure to pay for work done;
  • the scope or quality of the work done. For example, a builder that your business is contracting fails to deliver work at the quality specified in their contract;
  • the estimated costs, in comparison to the actual total;
  • defective work; or 
  • a disagreement relating to what was agreed upon, or an issue of contract formation. 

Other Matters

There is a wide range of disputes that the Tribunal deals with outside of building matters. These include disputes concerning:

  • joinery;
  • landscaping; 
  • flooring;
  • quantity surveying, or QS;
  • tiling; 
  • waterproofing; 
  • plumbing;
  • concrete; 
  • engineering; and
  • electrical. 

Hence, if your construction business is experiencing issues in one of these areas, you may wish to consider using a dispute resolution method offered by the Building Disputes Tribunal. 

What Dispute Resolution Methods Are Available?

The Building Disputes Tribunal offers an array of dispute resolution processes. What procedure is best for your construction business will depend on:

  • your desired costs;
  • your time constraints;
  • whether you wish to be assisted by a third-party;
  • whether you want to have a decision imposed; and
  • the nature of the relationship you have with the conflicting parties. 

Adjudication

In adjudication, the outcome of the dispute is decided by a neutral third-party, or an adjudicator, after reviewing the arguments of the disputing parties. This outcome is binding on all of the parties involved. 

If you wish to engage in adjudication, you can do so by serving a Notice of Adjudication to the other party or parties to the dispute. After doing so, you may complete an application to the Building Disputes Tribunal. You will be appointed an adjudicator within 24 hours. You do not need to get the other party’s consent to engage in adjudication. 

Most disputes are resolved through adjudication in the space of six weeks. 

Arbitration

Arbitration is a dispute resolution process where disputing parties agree for an independent third-party, an arbitrator, to settle their dispute. This decision is binding on the parties involved. 

If you wish to engage arbitration to settle your current or future dispute, you must expressly agree to it. You can agree to use the Building Dispute Tribunal’s arbitration rules by:

  • a clause in your construction contract. If this is the case, you will have to serve a Notice of Arbitration to notify the contracting parties that you wish to engage in arbitration; or
  • getting all disputing parties to agree to use these rules. 

Arb-Med

Arb-Med is a dispute resolution process that combines arbitration and mediation. The Arb-Med process uses mediation-based negotiations to discuss and settle disputes, in conjunction with information gathered by arbitrators. If these negotiations are unsuccessful, you can consider a formal arbitration process to resolve the dispute.

Similar to arbitration, you have to agree to use the Building Dispute Tribunal’s Arb-Med rules before applying to the Tribunal.

Mediation

Mediation is a consensual dispute resolution process. An independent third-party practitioner, a mediator, assists negotiating parties to reach a mutually acceptable settlement to their dispute. 

Expert Determination

In expert determination, conflicting parties agree to refer their dispute to an independent person who has expertise relevant to the matters in issue. The outcome of this dispute can either be binding or non-binding. 

If you wish to use expert determination, you will have to get all parties involved to sign an agreement for expert determination and complete an application form to the Building Disputes Tribunal.

Early Neutral Evaluation

Early neutral evaluation is a dispute resolution process that aims to provide early resolution to emerging issues. These issues are resolved by an independent third-party evaluating the facts and arguments presented by the disputing parties, and coming to a non-binding conclusion. 

Dispute Review Boards

You can set up a dispute review board when you enter into a construction contract. This board will be well acquainted with your contract and can assist the parties to the contract in resolving disputes as they arise in the course of the contract. 

Key Takeaways

It is not uncommon for disputes to emerge in the performance of your construction contract. However, it is best practice to deal with these issues early and in a manner that will preserve your legal relationship with your clients or contractors. The Building Dispute Tribunal offers an array of dispute resolution processes for a wide range of issues. The Tribunal can also provide you with guidance on which process is best suited to your circumstances and dispute. 

If you need assistance in a building dispute, contact LegalVision’s dispute and litigation lawyers on 0800 005 570 or complete the form on this page.

FAQs

What is the Building Disputes Tribunal?

The Building Disputes Tribunal is a forum that offers a wide range of private dispute resolution processes to resolve building or construction disputes.

How much does it cost to go to the Building Disputes Tribunal?

The costs required to go to the Building Disputes Tribunal will vary depending on the type of dispute resolution process you choose.

Why do disputes occur in construction?

Disputes arise in construction for a range of reasons. The most common is to do with a misunderstanding about each party’s contractual obligations, such as a disagreement as to the amount to be paid, or the date on which the work is to be completed.

What is the difference between adjudication and arbitration?

To use arbitration, all parties involved must consent for an arbitrator to settle their disputes. In contrast, parties to a construction contract have a right to adjudication and can use adjudication without the other disputing parties’ consent.

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