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Cost Effective Dispute Resolution Alana Dowley Legal Services Director Contract Intelligence Pty Ltd.

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Presentation on theme: "Cost Effective Dispute Resolution Alana Dowley Legal Services Director Contract Intelligence Pty Ltd."— Presentation transcript:

1 Cost Effective Dispute Resolution Alana Dowley Legal Services Director Contract Intelligence Pty Ltd

2 WHY ADR? Cheaper and quicker Flexible in process and outcome Considers commercial imperatives Maintains relationships Is private and confidential Must be preferred over trial (even after litigation has commenced)

3 Dispute Resolution Clauses Notice of Dispute Compulsory conference within 14 days Automatic referral to Arbitration – IAMA appointment unless agreed – IAMA Rules unless agreed

4 Commercial Arbitrators FieldProfessionNumber Construction – Civil Engineering & MiningSolicitor11 Engineer – Civil and Mining12 Construction – Design/ArchitectureSolicitor5 Architect7 Construction – Major Commercial / IndustrialSolicitor6 Architect9 Builder5

5 Legal v Technical Legal arbitrator – Tends towards formal process – Requires adversarial expert evidence – Provides expertise available through the Courts Technical arbitrator – Grounds for appeal Misconduct of the proceedings Error of law on the face of the record

6 Commercial Arbitration Rules Institute of Arbitrators & Mediators Australia Schedule 1: General Arbitration Procedure Schedule 2: Fast-track Arbitration Procedure – 20 days each (consecutive) to provide: Case statement Evidence (including expert reports) Submissions – On the papers if possible Otherwise, hearing within 120 days of reference

7 Industry Trend in Disputes Clauses Mediation followed by litigation – Challenges for mediation: Issues not yet defined Lack of access to documents and information Parties emotionally charged No costs incurred yet Litigation (with pre-trial mediation) – Challenges: Early in the process? – Issues as above Later in the process? – Too much invested already

8 Civil Dispute Resolution Act (Cth) Federal Court applications – incl bankruptcy and consumer protection Applicants: genuine steps statement – efforts made to resolve dispute Respondents: genuine steps statement – whether respondent agrees with statement Consequences – Referral to dispute resolution – Dismissal, strike-out, or limitation to pleading – Adverse cost orders

9 Supreme Court Mediation Rules No listing for trial without mediation Mediators: Registrars, Judge, private mediator Court encourages early mediation Solicitors are to inform clients on mediation Costs: usually in the cause, however, adverse costs orders possible for lack of cooperation Mediation in expert conclave can be ordered

10 District Court Mediation Rules Pre-trial conference at Entry for Trial stage Registrar attempts to resolve dispute, narrow issues, direct further interlocutory steps Process designed for personal injuries matters (insurance respondent) Pre-trial may be adjourned to mediation (particularly for complex matters) Early mediation vaguely encouraged

11 Magistrates Court Mediations Pre-trial conference before any formal steps Registrar explores potential for settlement Directions to progress matter if required Pre-trial either adjourned or listing conference

12 State Administrative Tribunal Initial directions hearing: – explore settlement – directions to progress matter if required Mediation will be ordered if appropriate Trial dates are set notwithstanding mediation

13 Construction Contracts - Adjudication Payment claim made under Contract Dispute arises on rejection / non-payment Application within 28 days Response within 14 days Adjudicator appointed by registered body Possible further steps: – View, expert, further submissions, extension Determination within 14 days Binding and enforceable but interim (not final)

14 Applications for Adjudication Year Number of Adjudications Total $A Value of Payment ClaimsMean value of Payment Claims $10,485,828.12$361, $15,938,123.77$442, $98,222,008.65$1,142, $35,838,998.23$341, $233,266,050.32$1,356, $308,553,664.77$1,566, From the Report of the Building Commissioner for the year ending 30 June 2011

15 Adjudicator’s fees Range of ClaimsTotal feesHighestLowestMean average $1 - $9,999$35,932.50$7,500.00$220.00$1, $10,000 - $24,999$34,912.35$8,000.00$800.00$3, $25,000 - $99,999$141,849.90$10,000.00$462.00$3, $100,000 - $249,999$108,508.55$13,318.61$120.00$3, $250,000 - $499,999$90,447.96$18,304.00$432.00$4, $500,000 and over$298,584.98$28,023.05$1,000.00$7, From the Report of the Building Commissioner for the year ending 30 June 2011

16 Fast-Track Arbitration v Adjudication Process remains flexible – Can be extended – Can incorporate mediation Arbitrator – Chosen or appointed – Co-arbitration or referral to expert possible Result – Binding and Final – Limited right of appeal

17 Expert Costs in Arbitration Eg: Approximate pre-hearing costs – Arbitrator$5,000 – Solicitor$40,000 – Counsel$15,000 – Expert witness$160,000 TIMES by 2?WHY?

18 Dispute Resolution Clause Notice of Dispute Compulsory conference within 14 days Construction Contracts Act Adjudication? Automatic referral to Arbitration after 28 days: – Co-arbitrators (one legal, one technical) – Mediate at prelim conference – Thereafter, Fast-Track IAMA Rules – No adversarial expert reports – Civil Dispute Resolution genuine attempt rules apply Litigation reserved for urgent injunctive relief


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