Last edited 11 Feb 2016

Conciliation in construction disputes

NB ICE contracts have been withdrawn in favour of NEC contracts (Ref ICE) and the term ‘conciliation’ is gradually falling into disuse, regarded instead as a form of mediation.

Conciliation using the Institution of Civil EngineersConciliation Procedure (1999) is a process that may be used at any time by agreement of parties who have contracted under the ICE family of contracts and associated subcontracts. Once the parties have agreed to take part in the conciliation process, there is no right given under the ICE Procedure for a party to object to the appointed conciliator. Overall, the process set out in the Procedure gives very wide discretion to the conciliator as to how the conciliation is to be conducted; but, in practice, the process adopted is usually very similar to that for a typical mediation.

The principal difference between mediation and ICE conciliation arises when progress towards a settlement breaks down as, for example:

  • when the conciliator is of the opinion that it is unlikely that a settlement will be achieved;
  • a party fails to comply with some instruction of the conciliator; or
  • either party indicates they do not wish to proceed towards a negotiated settlement.

In such circumstances the conciliator prepares a ‘recommendation’ which sets out their solution to the dispute. The various ICE contracts provide that if the conciliator makes a recommendation, and neither party dissents from that recommendation within one month of its issue by referring the dispute to adjudication or arbitration, then the recommendation becomes final and binding.

A similar situation applies when a dispute review board (sometimes referred to as a dispute resolution board DRB), appointed under the International Chamber of Commerce (ICC) Rules, issues a ‘recommendation’ with respect to any dispute referred to it. If no party expresses dissatisfaction with a recommendation within a stated time period, the parties contractually agree to comply with it. If a party does express dissatisfaction with the recommendation within such time period, that party may submit the entire dispute to arbitration, if the parties have so agreed, or the courts. Pending a ruling by the arbitral tribunal or the court, the parties may voluntarily comply with the recommendation, but are not bound to do so.

This article was created by --The College of Estate Management 15:45, 11 December 2012 (UTC)

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