A JCT contract is a standard form of building contract produced by the Joint Contracts Tribunal.
These contracts are widely used in the construction industry and help to establish the responsibilities and obligations of all parties involved in a building project.
The JCT contract also provides various dispute resolution options, including negotiation, mediation, adjudication, arbitration, and legal proceedings.
Dispute Resolution Options
Should a dispute arise under the auspices of a JCT contract there are several lines of action that can be taken.
Negotiation
The process for this is outlined in the Subcontract particulars. Direct negotiation empowers the different parties to find an amicable solution that suits both parties. It is one of the easiest methods to resolve a construction dispute.
Mediation
This is an informal and voluntary process in which a neutral third party, the mediator, assists the parties in finding a mutually acceptable resolution to their dispute.
One of the benefits of mediation is that it can preserve the relationship between the parties, which can be particularly important in the construction industry where ongoing relationships between contractors, subcontractors, and owners are often necessary.
Mediation can take place at any stage of a construction project, and it can be a cost-effective and efficient way to resolve disputes compared to going to court or arbitration.
The parties can also tailor the mediation process to their specific needs and concerns, which can lead to a more satisfactory outcome for both parties.
Adjudication
Adjudication is a statutory and contractual procedure available to parties to a JCT contract for resolving disputes.
It is a cost-effective and efficient method of resolving disputes as it allows for a binding decision to be made quickly, without the need for lengthy and expensive court proceedings.
The role of the adjudicator is to make a binding decision based on the submissions of both parties.
A decision should generally be made within 28 days of the referral, although this can be extended by the agreement of both parties.
The decision is binding unless a conclusion is reached through agreement, arbitration, or legal proceedings.
The JCT contract outlines the process for commencing adjudication and specifies who the adjudicator will be.
The adjudicator is usually identified within the contract or chosen by the nominated body named in the Sub-Contract Particulars.
Adjudication can be particularly useful in the construction industry as it allows projects to continue without delay while disputes are resolved.
It also provides a more streamlined and less formal process than traditional court proceedings, making it a popular choice for resolving disputes in the construction industry.
Arbitration
Arbitration is a private process where disputes are resolved by an impartial third party, known as the arbitrator. The arbitrator will consider all evidence and submissions before deciding, which is legally binding and enforceable.
To commence arbitration, one party must serve notice on the other party. Both parties must agree on the appointment of an arbitrator.
If they cannot agree within 14 days of the notice, the arbitrator can be appointed by the person identified in the Sub-Contract Particulars.
Arbitration is a common method of dispute resolution in the construction industry as it is often quicker and more cost-effective than litigation. It is important to note that parties must agree to arbitration in advance, and this should be specified in Article 5 of the Agreement and the relevant clauses.
Legal Proceedings
Legal proceedings are typically dealt with by the Technology and Construction Court (TCC) in the UK.
A judge in the TCC can handle complex construction issues, and the decision made by the court is legally binding and enforceable.
Before commencing legal proceedings, the parties are usually required to comply with the Pre-action Protocol for Construction and Engineering Disputes.
This protocol outlines the steps that parties must take before starting court proceedings, including the exchange of relevant information and attempts to resolve the dispute through alternative methods such as mediation or adjudication.
It’s important to note that if there is an arbitration clause in the JCT contract, and both parties have agreed to resolve a dispute through this method, then legal proceedings may not be an option.
Therefore, it’s crucial to carefully consider the provisions in the JCT contract from the outset to ensure that all parties are aware of the dispute resolution methods available to them.
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