Brian Allan, MD, Chartered Surveyor, Construction Claims Specialist and practicing Expert Witness at QSI Consultancy Group discusses the Conflict Avoidance Pledge (‘the Pledge’) and how this can support new build nuclear projects.
What is the Conflict Avoidance Pledge?
The Pledge was launched in 2018 by the Conflict Avoidance Coalition Steering Group (CACSG), comprised of RICS, ICE, CIArb, RIBA, ICC, ICES, DRBF, Transport for London and Network Rail. The Pledge aims to create positive change in the way disputes are managed in the construction and engineering sectors.
By signing up to the Pledge individuals, businesses and organisations undertake to promote collaborative working and use early intervention techniques to try to avoid, manage and resolve differences of opinion more efficiently and before they become formal disputes.
The CACSG itself seeks to promote conflict avoidance methodologies in recognition of growing dissatisfaction with existing forms of dispute resolution.
The Conflict Avoidance Toolkit
Signatories to the Pledge receive the Conflict Avoidance Toolkit, which is designed to help parties avoid disputes or otherwise deal with disputes quickly and effectively (i.e. early intervention). The Toolkit helpfully sets out steps that can be taken at each phase of a project, including pre-contract and post contract. The concept of early warnings is identified, as is also enshrined in the NEC contracts. Collaborative and mediative resolution of issues arising is promoted. When determinative procedures are necessary, the Toolkit highlights that the procedure (and decision-maker) should be carefully selected to optimize the outcome (including time and costs) for the parties.
NEC and the Pledge
Many of the Contractors and Suppliers on Hinkley Point C will have been engaged under an NEC contract. NEC (and its parent the Institution of Civil Engineers, a member of the CACSG) are a firm supporter of the Pledge. The NEC contracts themselves are quite consistent with the objectives of the Pledge; e.g. requirement for early warning notices, prospective assessment of compensation events, the requirement to ‘act in a spirit of mutual trust and cooperation’, transparency, mitigation etc. (see also the author’s article on Dispute Avoidance under the NEC Form of Contract, March 2021).
The Construction Playbook and the Pledge
The Cabinet Office’s updated Construction Playbook of September 2022 provides mandatory guidance for public sector contracting authorities. This now includes a requirement for signature of the Pledge and the use of ‘boilerplate’ dispute resolution clauses.
The RICS Conflict Avoidance Process (CAP)
The boilerplate dispute resolution clauses mentioned above invoke the RICS Conflict Avoidance Process (CAP). The adoption of CAP leads to, in the event of a dispute, the appointment of a Conflict Avoidance Panel by the RICS. The Panel (an individual or panel of 3) will provide a reasoned non-binding recommendation, which the parties can either accept or use as the basis for negotiations. The Panel remains available to support the parties’ settlement efforts. The objective being to avoid more adversarial, length and costly formal procedures (e.g. arbitration or litigation).
Where existing contracts do not provide for CAP, the parties may still agree on an ad hoc basis to adopt the process. Those parties currently working under an NEC contract will already be benefiting from the dispute avoidance and early resolution mechanisms within those contracts (i.e. NEC3, NEC4, plus options).
Conclusions
Dispute avoidance and resolution will obviously be crucial for the nuclear new build industry going forward. Given the long period from breaking ground to commercial operations, few parties to a nuclear new build project will have the ‘luxury’ of waiting until their works are complete before resolving disputes. Traditional adversarial means of dispute resolution in the midst of challenging construction and commissioning activities are, in my experience, to be avoided if possible due to the resultant drain on key resources. Therefore, to my mind, subscribing to the Conflict Avoidance Pledge and its ethos would be hugely beneficial for the nuclear industry.
Whilst signing the Pledge does not bind parties to any particular dispute avoidance and resolution mechanisms, it signals an intention to follow a collaborative approach and the associated guidance supports this.
The Pledge is gaining momentum and will likely also be promulgated internationally. I would encourage all parties to the U.K’s nuclear new build projects to become signatories and to implement the underlying principles: Conflict Avoidance Pledge (rics.org)
If anyone would like more information or related literature, please contact the author. I would also recommend the related Conflict Avoidance Community on Linkedin for further insight.