Application of Legislation to the Construction Process

Arbitration

ar*bi*tra*tion / * n. the use of an arbitrator to settle a dispute. (Oxford dictionary)

The Arbitration Act 1996 extended the previous Act of 1997. It came into force in 1996 and it applies to England, Wales and Northern Ireland. Scotland is excluded because different laws apply in Scotland. The Act consists of a number of provisions, some which will apply to all arbitrators, and others to arbitrators provided by the parties in their agreement. The majority of agreements adopted by the Construction industry accept the Act in its entirety. (Reference Contractual procedures in the construction Industry, Allan Ashworth, 2001 page 44)

Arbitration is the alternative to legal action in the courts to settle an unresolved dispute. No one can submit a dispute to arbitration unless they have agreed to within the terms of the contract. Once a person has agreed to arbitration they can no longer take legal action before hand if they do the courts will not look at the case. All standard forms of contracts within the construction industry include arbitration provisions leading to this way of dealing with disputes a common procedure.

It is a private procedure used for settling a wide range of issues within the construction industry. The dispute is settled by an impartial third party. The arbitrator is usually appointed to settle a dispute in a field that they are experienced or even experts in some cases there may be a need for two arbitrators where the second arbitrator can be known as an umpire. Arbitrator's powers are very wide they can often disregard opinions, decisions or notices that have already been given. Most practising arbitrators are members of the Chartered Institute of Arbitrators (FCIArb). However arbitrators who have qualification in construction and law are preferred. They should be independent from the parties involved so not to give an unfair verdict or see as being biased, which can result in the arbitrator being disqualified. The parties involved should agree and which arbitrator to choose for their case.

The agreement in the JCT contract says that no proceedings can take place until partial completement has been achieved, the termination of the contact has been made or if the project has been abandoned. There are exceptions when the arbitration can be carried out within the process of work such as the contractors objection to the appointment following the death of the architect or quantity surveyor, dispute over the power to issue and instruction, a certificate being improperly withheld or not being in accordance with the conditions, dispute over the difference of an extension of time or disputes concerning outbreak of hostilities or war damage. At the end of arbitration and agreement is a decision/award is given by the arbitrator where as the parties involved must be capable of entering a legal binding contract. The agreement should be in writing and be signed by both parties; it must state the issues that were brought to the arbitrator and the proceedings that will be initiated. It must also not contain anything illegal.

There are advantages of arbitration in which it is less expensive than court proceedings it is a quicker way than court proceedings also as courts can take up to a year waiting time. They are also held in private so this avoids any bad publicity. Hearings can be arranged to suit the parties involved whilst you are bound by court timetables. The courts may not be experts in the construction law and may come to the wrong conclusion where arbitrators can be experts in the field needed. Where a dispute which can involve a building site or property it can be insisted that the arbitrator visit the site concerned where a judge may decide on a visit this cannot be enforced by the parties involved.

Outline of the procedure:

The pleadings

Pleadings are the formal documents which may be prepared by a solicitor. These documents are very important as it will make the matters in the dispute clear to the arbitrator.

Discovery

The term discovery means the disclosure of all documents which are in control by each party which are relevant to the case. The most important of these documents are the communication documents between solicitors. If any of the parties do not show up to a hearing an arbitrator may proceed without party.

The hearing

The hearing follows the same as rules of a court of law. The parties may or may not be represented by a counsel.

Evidence

To enable the arbitrator to carry out justice between parties the evidence must be carefully considered. There are rules of evidence in which the arbitrator must ensure are observed there can be four main problems, who is to assume the burden of proving the facts? (The innocent until