Civil Engineering December 2022 | Vol 30 No 11

18 December 2022 Civil Engineering I n his report titled “Constructing the Team” published in July 1994, Sir Michael Latham made the following recommenda- tion for provision in construction contracts: “While taking all possible steps to avoid conflict on site, providing for speedy dispute resolution if any conflict arises, by a pre-determined impartial adjudicator/referee/expert.” Historically, construction disputes have been resolved via litiga- tion. In more recent times, public sector contracts usually in- cluded litigation as the means of settling disputes whereas private sector contracts employed arbitration. Cost, delay and uncertainty of the outcome lead to an erosion in user confidence in litigation and this led to the growing move to arbitration as the preferred means of dispute resolution. ARBITRATION Arbitration has been used as a means of resolving commercial disputes in the United Kingdom (UK) since medieval times, though the first Arbitration Act was only enacted in 1698. A growing discontent with the process led to the enactment of the latest Arbitration Act in the UK in 1996. In South Africa, the Arbitration Act (No. 42 of 1965), which was enacted several decades ago, is subject to criticism and long overdue for updating. Arbitration has suffered the same fate as litigation in that it is costly, time consuming and the outcome can be unpredictable. During the late 1980s and early 1990s, the construction industry flirted briefly with Dispute Review Boards. In this process a panel of experts provides a non-binding recommendation on any matter or difference brought before them. The results experienced on projects such as the Lesotho Highlands Project Phase I were promising. Approximately 60% of disputes were resolved by the expert panel and 60% of the remaining 40% were resolved via negotiation after the panel’s intervention. Only 16% of disputes were eventually unresolved and had to be referred to arbitration. This process obviously suits the larger, well-heeled contrac- tors who can afford to wait for their payment, but not the small subcontractors whose life blood is cash flow. ADJUDICATION Following the Latham report, the UK Government was persuaded that primary legislation was required to give all parties to con- struction contracts a statutory right to have disputes resolved, D i sputes Implementation of dispute boards on construction contracts Ian Massey CEng, FICE FIDIC President’s List Adjudicator ICE-SA NEC Adjudicator Director: MDA Consulting imassey@mdaconsulting.co.za