unit 1 conflict : disputes & arbitration. objectives list and group potential causes of...
TRANSCRIPT
Unit 1
Conflict : Disputes & Arbitration
Objectives• List and group potential causes of complaints or
disputes during construction• Describe the actions available to the parties in
the event of complaints or disputes arising• List and describes sources of external advice
available to the respective parties involving in the complaint or dispute
• Formulate a working plan to review each project with respect to avoiding and/or minimising complaints or disputes using proactive management techniques
Objectives
• Establish a contingency plan to accommodate unforseen complaints or disputes
Complaints
• Discuss complaints you’ve had on jobs• Processes to avoid and minimise these
complaints• List types of complaints you’ve had on the job• Disputes come in all forms• It is important to stop the complaint becoming
a dispute• Good communications• Good practice to avoid all disputes
Contracts• What is a Contract ?• Contracts are legally binding agreements
between private parties• Enforced by the Government through the courts• Everybody has freedom to contract anything
within the law• Parties to the agreement must comply to the
terms of the contract• Real or Perceived non compliance can lead to
complaints & disputes
Contracts
• Contracts should be used in all cases• Home building act requires that projects
valued over must have a written contract for the builder to be able to claim payment
• There are various types of contract• Standard form MBA, HIA• Standard form Department of Fair Trading• Specific purpose prepared by either builder or
client
Contracts
• What other ramifications on type of contract• MBA HIA contract usually favour builder• DFT usually favour client• Specific purpose contract – if somebody goes
to the trouble, you can guarantee it will favour the drafter of the contract
Contracts
• Remember contracts are legal documents• Make sure you understand the requirements
as you will be legally bound• Having this understanding of the
requirements will be the first step in minimising complaints
Complaints
• What is the most common type of complaint ?• Most complaints are caused by lack of
communication
Builder and Client Disputes
• Obviously between builder (you) and • Client (the person you’re building for)• Client may also include• Architect (Bayline v ……..Child Care)• Engineers• Financers (Wintertons Vs Hambros)• Architects and other professional agents of
the client – ultimate dispute is with client
Builders and Client Dispute
• Disputes may be wide and varied• Types of finishes specified in contract• More confusingly, items not specified in
contract lead to disputes• What type of bath ?• What type of skirting ?• Who pays power fees?• A building contract needs to be very detailed
Builder & Client Disputes
• Quality of Work• Is the same standard of work required in a
Department of Housing Unit as in a unit at Benalong Point
• Variations• Client always thinks it’s included builder thinks
it’s an extra
Builder and Client Disputes
• Extension of time• Contracts will specify format of claim• How much delay is caused by rain ?• Client can’t make up mind in deciding of tiles• Is it a critical item ? – Not all delays are critical
Builder and Client Disputes
• Performance and completion• What is the date for practical completion ?• This is dependent on delays, variations,
extension of time• Liquidated damages ?• Is the job complete ?
Builder and Client Disputes
• Document interpretation• Specification says granite bench tops• Plans say laminate• Contract should specify order of precedent• Where does precontractual documentation
and correspondence fit in ?
Builder and Client Disputes
• Progress payments• Has work been completed ?• Is payment due ?• Retention ?
Builder and Client Disputes
• Disputes may affect • Cash flow• Company reputation• Which may in turn affect the viability off the
company• That’s why conflict resolution is an important
business management tool
Builder and Union
• Neglect award conditions• Neglect safety• Disputes may start from very minor issues e.g.
pie ovens, dim sim allowance• Disputes may cause stoppages which may be
very expensive
Builder and Sub Contractor
• These types of disputes are similar to client builder disputes
• Builder is normally called principal/head contractor
• Sub contractor contracts to builder contracts to client – Sub contractor cannot sue client under contract and vice versa
Builder and Sub Contractor
• Quality off work• Client, builder and Sub contractor may not
necessarily agree with each other on required quality of finishes
• Client, builder and Sub contractor may not necessarily agree on materials to be used
Builder and Sub Contractor
• Performance and attendance• Sub contractor may also claim extension of
times• Delay may not be caused by client issues – this
may lead to Sub contractor having more time to complete works than builder has with client
• Subcontractor may have many jobs• This conflict will inevitably lead to builder
client conflict
Builder and Sub Contractor
• Variations• Builder has two different contracts• First contract builder to client second contract
builder to contractor• Extremely rare to be same type of contract
inevitably there is conflict between the two• Example - Head contract may include rock
excavation, Sub contractor may not include it
Builder and Sub Contractor
• Payments• Payments scheduled on head contract may
not match Sub contract – affecting cash flow• What happens if client doesn’t pay and Sub
contractors payment is due – non payment is not caused by Sub contractor
Dispute Resolution
• What do you do?• Firstly try identify the cause
• You may be in the wrong
• It may be a simple misunderstang
Dispute Resolution
• Next Step?
• Meeting between the parties – try reach mutual agreement
Dispute Resolution
• Next Step – Dependant on Contract – Limited by Home Building Act
• HIA Contract Specifies meeting must be held within 10 days after formal notice of Dispute
• Independent Arbitration – not allowed!
Dispute Resolution – Non Residential
• Contracts dealing with non residential building contract will specify Dispute Resolution.
• May Specify Arbitration/Concilliation before any court action taken
• Legal Action may proceed through the courts or Consumer Claims Tribunal
Dispute Resolution
• Home Building Act requires that initial complaint to be made through Department of Fair Trading
• DFT will investigate and may issue rectification notice – notice is only advice
• DFT will not become involved in contractual matters
Dispute Resolution
• If DFT cannot resolve matter options are either
• Consumer Claims Tribunal (CCT) – has a mandate to solve disputes through conciliation. If this is not Possible will make binding ruling
• Magistrates, District and Supreme Court depending on limits
Consumer Claim Tribunal
• View CCT Video
Dispute ManagementSteps to Take
• Set up your contract requirements- use quotes from pre printed books with you conditions
• Note contract law requires that conditions are brought to notice of your client. Otherwise the conditions will not apply.
• These forms will evolve as you pick up mistakes
Dispute ManagementSteps to Take
• Similarly use a standard form for your contracts
• This will also evolve as you pick up errors• Make sure your clients and subcontractors
clearly understand the contract.• Ensure that written contract reflects the
agreement and all its conditions
Dispute ManagementSteps to Take
• Install a process of quality assurance
• This is more value on larger jobs
• This may be a requirement on government jobs
Company Working Plan
• This is simply a policy or plan of management practices that will reduce the chances of complaints & disputes arising
• This policy should be designed to prevent complaints developing into disputes
Documentation• All disputes should be documented • This will provide a good evidence trail in the
event the matter is taken further. Importantly
- the initial complaint- your response and your offers to settle (remember CTT has a mandate to settle disputes by conciliation)- keep minutes of any meetings, send a confirmation
Documentation
• Provides a working plan for future disputes
Contract
• It is important that contract reflects your agreement
• Complies with the requirements of the Home Building act- Be in writing- Binding Arbitration not allowed
Contract Administration
• Contract should be enforceable What should the contract cover
• Names of the Parties• Extent of Works• Payment Schedule• Dispute Resolution Process (Note Home Building
Act has specific procedures)• Required Notices – Extension of Time etc• List Others ?
Industrial Relations
• Employer has legal obligation• OHS – What is primary requirement?• A controller of a workplace must provide a
safe workplace to ensure the SAFETY of employees & visitors. Sec 9 OHS act (2000)
• An injury is evidence of breach. You have to mitigate
Industrial Relations
• Workers Compensation• Must have a policy that covers all employees• If no policy exists then employer is personally
liable• If you employ someone under A.B.N are they
an employee for Workers Compensation Purposes?
Industrial Relations
• Taxation, Rates of Pay, Superannuation• Employers must collect Tax and remit to ATO• 9% of Ordinary Time for superannuation
Industrial Relations
• If you employ someone under A.B.N are they an employee for Tax Purposes? – This a tax issue
• What is the 80/20 Rule
Industrial Relations
• If you employ someone under A.B.N are they an employee for Superannuation Purposes?
• – This is a Common Law Issue
Industrial Relations
• Management of the previous issues is important to avoid industrial disputes.
• If your workforce is not “WORKING” you aren’t making money. –
Your Overheads are still accumulating!
Contingency Plans
• Forecasting disputes
• Records and/or Experience will tell areas that traditionally lead to disputes – What have you found consistently cause disputes
• What use can previous records provide?
Planning & Organisation
• Once identified you can anticipate disputes
• You can take put management strategies in place
Controlling
• Define the Problem• Gain the facts• Review the evidence• Consider Alternatives• Develop plan
Co-ordination
• You as the builder must co-ordinate the process
• Manage the Client/Architect• Manage the Suppliers• Manage the Subcontractors
Review
• Forecast & Predict• Planning & Organisation• Controlling• Co-ordinating