14 BUSINESS AND TRAINING

By

Uwe Putlitz

What are the pros and cons of dispute avoidance in building and engineering contracts ?

Uwe Putlitz is a registered professional Architect and Construction Project Manager , a Fellow of the Royal Institute of Chartered Surveyors ( RICS ) and is a visiting lecturer at the School of Construction Economics and Management at the University of the Witwatersrand . Having recently retired as the Chief Executive Officer of the Joint Building Contracts Committee ( JBCC ) he specialises in the avoidance of construction disputes by way of lectures , technical articles dealing with aspects of contract administration for various industry publications arising from the use of Standardform Contracts including the Federation Internationale des Ingenieurs-Conseils ( FIDIC ), the General Conditions of Contract ( GCC ), the JBCC or the New Engineering Contract ( NEC ) to find an acceptable settlement without resorting to legal processes , where possible .

More info : info @ buildstrat . co . za

“ Early Intervention is about snuffing

out the smoking embers before they ignite into a fire .”

The concept of ‘ conflict avoidance and the speedy resolution of disputes ’ was pioneered during 2018 by some construction industry related bodies in the UK including the RICS , ICE , RIBA , CIArb , under the name of the Conflict Avoidance Coalition Steering Group and the publishers of FIDIC and NEC standardform contracts :

“ Dispute avoidance is about stopping the smoking embers of a dispute by bringing them to the attention of people who can do something about it , early Intervention is about snuffing out the smoking embers before they ignite into a fire .” 1

But first – let ’ s take a retrospective look at the evolution of standard-form contracts and support documentation

It is recorded that the first ‘ standard building contract ’ was published in 1879 by the Royal Institute of British Architects ( RIBA ), the Builder ’ s Society and the Association of Master Builders London . In 1909 the RIBA and the National Association of Building Trade Employers published a revised version .

Building contracts have included dispute resolution clauses for many years . The 1909 RIBA version referred to ‘ arbitration ’ not dissimilar to current thinking . The names of two persons to act as arbitrators were to be included in the contract ( should the first named person not be available ) excluding matters left to the sole discretion of the architect . The RIBA 1931 edition with substantial revisions referred to option ‘ A ’ dealing with matters the architect could decide , leaving other matters to be arbitrated in option ‘ B ’ 2 .

The RIBA 1909 form of contract was published under license in South Africa in 1928 by the Cape Institute of Architects , then known as the ‘ blue form ’. In 1932 the RIBA 1931 version was published by the Institute of South African Architects under license as the ‘ white form ’ endorsed by the Association of SA Quantity Surveyors and the Building Industry Federation subsequently ‘ Master Builders South Africa ’ for use by its members . – “ It deals in one clause with all those matters which particularly distinguish building Contracts and the like from other forms of commercial contracts and which are required by the necessity of reserving for the Employer ' s agent - the Architect - the power to vary the work and to have the work done with materials and workmanship which he approves notwithstanding any defect in the original design or specification . Where an Architect is to be entrusted with such wide powers , it is at the same time essential that the contract should provide for the adjustment of the remuneration to be paid to the Contractor and in this respect the 1909 form was seriously deficient .” 3

“ The parallel South African editions of the 1931 RIBA edition included a provision to refer a disputed ( payment ) certificate to arbitration during the progress of the work ”. This document was revised in 1952 and in 1955 .

The role of the architect remained relatively unchanged from the 1909 version ‘ regarded as the agent for the Employer … with matters left to his discretion … as a quasi-arbitrator … acting in a manner as an impartial judge between the Employer and the Contractor ’ and that ‘ any discretion or opinion exercised or expressed by the Architect has never been recognised as being final and not subject to arbitration ’.

Around 1957 the Joint Study Committee was formed in South Africa to publish the “ Agreement and Schedule of Conditions of Building Contract ” comprising of architects , quantity surveyors , builders and property owners . The 1977 ‘ ASCBC refers to - 1 . “( a ) The Contractor shall carry out and complete the Works in accordance with this Contract , in every respect in accordance with the directions

1 Conflict Avoidance Toolkit – CACSG 2018

2 M Lipshitz and G de C Malherbe : Malherbe and Lipshitz on Building Contracts 1979 published by the National Development Fund for the Building Industry BIFSA

3 supra

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