Project Mediation

Securing Positive Project Outcomes using NEC3

The NEC3 suite of contracts is growing in use in New Zealand.  The contracts were used with apparent success for the development of the stadium and other facilities for the London Olympics in 2012, and it is the preferred form of contract by the Office of Government Commerce for all public private partnerships in the UK.

In NZ, the engineering and construction contract was used for the development of the Northland Events Centre for the Rugby World Cup in 2011.  At $16.5 million, the development was more modest that some others, but it was on time, within budget, and effective.

This paper was prepared for the NEC Users’ Group Australasia conference in Christchurch on 27 August 2013.

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Risk-avoidance in construction and major procurement contracts

A proper allocation of risk is generally not achieved by simply accepting a standard or doctrinaire approach.

Risks are usually project specific, and therefore need to be identified on a project by project basis. This is most effectively done by developing a risk register, first within the project team, then refining it during the tender process, and maintaining it after award on a collaborative basis with the contractor as work progresses. Skilled, experienced project teams for the employer and contractor working together from the outset of a project are important to this process.

This paper, Risk-Avoidance, Transfer, Acceptance or Management was jointly prepared by John Walton and English construction law specialist, John Bellhouse (of Gray’s Inn).  We previously worked together in Hong Kong on the new airport project.  The paper was presented to the Society of Construction Law international conference in May 2012, for which it was awarded a prize.

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Project Mediation – Recognising and managing conflict with the projects’ best interests at heart

While it is reassuring to lawyers that the courts reserve the right to correct errors of law, for the main protagonists in construction disputes, owners and contractors and all those standing behind them, the frequently subtle distinctions argued by lawyers using arcane language wear the patience and strengthen a growing suspicion that these legal niceties are being established at their expense, with little real benefit to them.

Ultimately, the parties want a successful project.  With a few notable exceptions, in large construction projects, this can be hard to achieve without disagreements arising.  Sadly, the traditional method of competitively tendering projects  with maximum certainty for owners at considerable cost to the contractors who participate makes some level of disagreement an inevitability.  What is frequently missing in such contracting is any focus on avoiding disputes from arising in the first place.  It is the aim of project mediation to identify potential disputes as early as possible, and deal with them before the parties’ positions become hopelessly entrenched.

This paper was prepared in September 2007 and was used as the basis for an article in the October edition of The NZ Lawyer dealing with alternative dispute resolution.

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Drafting for Disputes – DRBs, DABs and Project Mediation

The most significant development in ADR internationally is the almost universal acceptance of dispute resolution boards (DRB), whether comprised of one member or three.

The emphasis of DRBs is for the parties to keep the board informed of the progress of the works, and to allow a truly independent party, one step removed from the project, to make decisions using flexible procedures appropriate to the dispute.

There seems to be considerable reluctance in New Zealand and elsewhere to embrace what otherwise appears to be an eminently sensible procedure.  Part of the reluctance is, I suspect, linked to incurring what is perceived as unnecessary cost from adding a further layer of management, and also the perception that a range of skills may be needed which may not be available from a board appointed at award, or after the first dispute arises.

There is also the problem that DRBs sit uncomfortably with adjudication under the Construction Contracts Act 2002.

This paper was prepared for a breakfast meeting for the Arbitrators’ and Mediators’ Institute of New Zealand on 8 May 2007 and as background material for abridged articles for the NZ Lawyer and for Cross Section magazine.

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