For better or for worse, I have originated one or two things in the world of construction law in both the UK and Australia. Apart from founding a law firm or two, I was the principal draftsman of the first set of adjudication rules and the first pre-action protocol for construction disputes[3] and coined the terms “pay now, argue later” and Queen of Hearts clause”. I have been making efforts to get pendulum arbitration more widely used to resolve construction disputes.[4]

It was also (and here we get onto the subject matter of this post) me who suggested to John Murray when he was preparing The Murray Report that there should be a statutory benchmark as to which time bars should be enforceable, and which not. It was not exactly suggested as a codification of the existing law, but I pointed out that there are several ways in which a time bar might be challenged, and a single test might be more satisfactory that the existing pot-pourri, referring him to my post ion the topic.

John Murray did pick up that suggestion in his report^[5], referring to what I had suggested^[6]. The substance of the indicative provision was thus:

 (1)   A provision in a Construction Contract which purports to make a right to claim or receive payment, or a right to claim or receive an extension of time, conditional upon the provision of any notice shall be of no effect if and insofar as

(a)   Compliance with the requirements of the provision would not be reasonably possible or would be unreasonably onerous, or

(b)   The requirements of the provision are not reasonably justifiable by any legitimate commercial purpose

(2)   For the purpose, “notice” includes any notice, claim for payment, narrative or calculation as to actual or estimated time or money.[7] Continue reading →

It is with mixed feelings that I have to report that I lost my 100% success record as a mediator the other day, having failed for the first time to bring the parties to an agreement.

It was always a somewhat improbable-sounding record, redolent more of Perry Mason than real life.  I feel content with Continue reading →

Preparing a client, or a witness, for a hearing is one thing. I might come to that later. But in any event, preparing a client for a mediation is something quite different.

The first thing to say is that the dynamic of a mediation is completely different from that of a court case or an arbitration. In a court case or an arbitration, the object of the exercise includes persuading the tribunal of the rightness, and of the reasonableness, of your position. Being unreasonable or difficult goes down badly. Conversely, a mediator is not much if at all concerned with doing justice, but merely in engineering a compromise deal, if that is at all possible. Within some very limits, it pays to be unreasonable. The mediator has no power at all to sanction an unreasonable party. And the more unreasonable the party is, the further the mediator is likely to have to reach in order to find middle ground.

There are limits to this, of course. If your client’s position is too unreasonable, and too inflexible, the mediation will fail. But the key to this is usually not in the initial reasonableness, but in the ultimate flexibility. There is merit in the old adage about mediation: “Give little and give late”.

And so it is usually a bad idea to try to rein in your client for the first three-quarters Continue reading →

Mediation has a reasonably good track record (overall, perhaps between 70% and 80% in construction disputes) but it could be better. As a lawyer representing parties, you might well think that quite a bit depends on who you choose, or agree, as the mediator. An ineffective mediator might give you a 50% chance of achieving a resolution at mediation, whilst a skilled mediator might have a 90% chance in the same case. So what should you look for? Continue reading →

I recorded a TV programme for BenchTV on pendulum arbitration the other day, being interviewed by Christopher Chin. BenchTV have not yet put it out, but I think that will not be too far in the future. My paper for the South Australian Bar Association is here, but this interview should provide a helpful and readily digestible first look into the topic for a wider audience.

These black backgrounds make one look a bit scary, but hopefully that will not detract too much from what is, I think, a significant weapon in the arsenal of dispute resolution.

What about the lecture I am doing for the Society of Construction Law in London in December on ‘Claims Outside the Contract’ alongside Christopher Seppälä from White & Case’s Paris office? In short, I will be talking about extra-contractual recoveries in common law (the topic of my most recent book), and Christopher will look at them from a civil law perspective. Should I turn up in person (it is a long flight for just one event)? Or do it by video from Myponga Beach? If I do it in person, my background will not be black. Or even blurred. But the National Liberal Club. Which has majestically hosted the lectures to the Society of Construction Law for decades. And anyway, whilst I have no present plans for a second edition, I would welcome the opportunity to talk to Christopher about this stuff.

Continue reading →

I delivered a paper last week for the South Australian Bar Association on pendulum arbitration. It met with a positive reaction, and I share it below.

The general drift – unsurprisingly enough, is that I believe pendulum arbitration to be underused in the commercial context. The principal reason for this is that most practitioners are unaware of it, and thus have no experience or knowledge about when and how it should be used. Hopefully, this paper will be a small step in rectifying this lacuna.

Pendulum Arbitration: What? Why? How?

Robert Fenwick Elliott[1]

Abstract

1. Pendulum arbitration is a form of arbitration in which the arbitrator must adopt, as the award, one or other of the draft awards put forward by the parties themselves. It is widely and successfully used in other jurisdictions around the world and particularly in some types of dispute, but has been only rarely used in Australia as a means of resolving commercial disputes. Its advantage over conventional arbitration is that it is significantly faster and significantly cheaper. It may be implemented by entering into a suitable pendulum arbitration agreement, either ab initio in a contract or ad hoc, whether at the outset of the dispute or after a mediation has failed, or after litigation has become bogged down.
2. There are good reasons why pendulum arbitrations could and should be more widely used.

What Is Pendulum Arbitration?

3. Pendulum arbitration (also known as baseball arbitration, or last best offer arbitration, or final offer arbitration (FOA)[2], or straight choice arbitration) is a subset of arbitration whereby at the conclusion of the process, the parties each provide the arbitrator with a draft award, and the arbitrator adopts as the final award the draft which most closely accords with the arbitrator’s opinion.[3] There is no scope for the arbitrator to substitute his or her own judgement, and so there is a powerful incentive on the parties to pitch their draft awards at a moderate and reasonable level, so as to improve the prospect that their draft will be adopted.
4. For practical reasons, discussed below, pendulum arbitrations are conducted much more rapidly, and less expensively, than conventional arbitrations. Usually, but not always, the arbitrator does not give reasons.[4]

Continue reading →