REALWorld Law


Alternative Dispute Resolution Procedure (ADR)

Is it common for construction disputes to be referred to ADR – such as adjudication, determination by an expert, mediation or conciliation? Is a form of ADR required by law, perhaps as a mandatory first step in the dispute resolution procedure?



As noted above, various jurisdictions have now introduced adjudication through legislative reform to the governing construction and lien legislation.  In most jurisdiction that implement adjudication, it will be binding on an interim basis, with the parties retaining the right to advance the same claims and defences again in a subsequent litigation or arbitration proceeding if they so choose.  As is the case in various international jurisdictions where adjudication is available or required, it is anticipated that it will be very difficult to appeal from or set aside a determination made in an adjudication.

The default is otherwise for disputes to be resolved by litigation unless the parties mutually agree upon an alternative method to resolve the dispute, which might include mediation, arbitration, or a combination of methods.  However, even if a party commences litigation, that party may be required to attempt to resolve the dispute by way of ADR.

Most common law jurisdictions have a form of judicial mediation or settlement conference that can be triggered by one or more of the parties.  Some jurisdictions such as British Columbia, have mandatory private mediation that can be triggered by one of the parties delivering a notice of intention to mediate to the other.  The mediation process is without prejudice.  If the parties are unable to settle after engaging in good faith efforts to do so, the legal dispute between them carries on as if the mediation had never occurred, and nothing that was said or delivered in the mediation can be compelled in the legal proceeding.

Parties may also mutually agree to voluntarily submit their dispute to mediation prior to arbitration or litigation.  Most standard form commercial construction contracts include mediation as one of a few prerequisite steps to engaging in binding arbitration.