A new mediation procedure is due to be published by the Construction Industry Council (CIC) following an industry-wide consultation.
The draft mediation agreement sets out a procedure for parties to follow to settle construction disputes. It is intended to avoid delays, protracted arguments and expensive litigation. The draft proposes a £6,000 fixed fee mediation for disputes with a value below £100,000.
The CIC will create a construction industry mediation panel to support the agreement. It will consist of accredited mediators with a minimum of 10 years’ experience in their primary profession.
Using the procedure, parties will agree to work together and use the mediator to help them resolve their dispute amicably. The document emphasises that mediation is not adversarial and works best where the parties are willing to cooperate to solve a shared problem.
“Mediation saves disputing parties money and time, it engenders practical solutions, and it preserves and restores relationships,” said Niall Lawless, chair of the CIC’s Adjudicator Nominating Body management board. “When mediation works it can be like magical,” he added.
James Burgoyne, Director – Claims & Technical, Brunel Professions believes the new procedure could help reduce the cost of professional indemnity claims, but parties need to be aware of the potential standstill arrangements contained in the proposals. “Mediation is generally seen as positive for a variety of reasons including preserving commercial relationships, confidentiality, reducing costs or simply seeing an end to a painful matter. The CIC’s efforts are to be generally welcomed therefore. It is worth noting that the CIC model proposals include a standstill arrangement however. This can be beneficial if proceedings would otherwise be commenced due to limitation issues, but there is a danger of a party inadvertently accepting the potential for standstill to apply if they are not aware of the detail of the new proposed procedure. A provision in a contract stating that the latest version of the CIC adjudication procedure is to apply would not otherwise ring alarm bells in terms of limitation.” he said.
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