Page 243 - Civil Engineering Project Management, Fourth Edition

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Variations and claims
17.16 Arbitration
Under the ICE conditions, Clause 66, either the employer or contractor can
serve a Notice of Dissatisfaction on the engineer stating the nature of the matter
objected to. The engineer has to give his decision on this matter within one
month and, if either party is dissatisfied with it, they can issue a Notice of
Dispute. The purpose of this procedure is to eliminate matters which can be
resolved early by the engineer and to define any remaining dispute. A dispute
thus established can be resolved by ADR, adjudication, or arbitration.
Although arbitration may seem a reasonable way of finally settling a dispute,
it has disadvantages. It may take months to find an arbitrator both parties can
agree to and who is willing and able to act. Both parties may decide to employ
a lawyer to present their case because the dispute involves interpretation of the
terms of the contract. Also one party may need to employ the engineer to act as
witness, because the dispute also relates to the facts of the case, which lie in
records kept by the engineer. If the employer is disputing the engineer’s deci-
sion, this puts him and the engineer in a difficult position because the con-
tractor may wish to employ the engineer as his witness, but the engineer may
still be acting as engineer under the contract for ongoing work, and he can
sometimes be an employee of the employer.
The lawyers who present the case for each disputant, although chosen for
their experience of building contract disputes, may still fail to understand or
make use of significant technical data having a bearing on the dispute. They
may raise issues not previously in dispute, and use legal arguments concerning
the contract, which the disputants feel are not relevant to the real matters of con-
cern. Hence the outcome of an arbitration is uncertain and can be different from
what either of the parties expected.

17.17 Minimizing claims and disputes

The key precautions which can be taken to minimize claims and disputes are:

(a) adequate site investigations;
(b) checking that the works designed satisfy the employer’s needs and make
reasonable provision for his possible future requirements;
(c) completing all design drawings, specifications, and arrangements for incor-
poration of equipment purchased separately, before tenders for construction
are sought.

Under (b) the aim is to minimize changes during construction. Some may be
unavoidable if the employer needs alterations due to some new regulation
applying, or if his needs change due to something outside his control. But
often his possible (but uncertain) changes of need can be catered for cheaply by