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In an effort to promote the amicable resolution of disputes in the construction industry, the Construction Industry Council (CIC) has recently published its Model Mediation Agreement and Procedure (MMAP). Nicholas Gould, partner at Fenwick Elliott, explains
the features of the scheme and what practitioners and their clients might hope for from it.
First published on LexisPSL on 10 July 2019.
Construction Industry Council Model Mediation Agreement and Procedure published, LNB News 12/06/2019 61
The CIC has published the first edition of its MMAP. The CIC MMAP sets out a model agreement and procedure for construction and engineering disputes using mediation. It blends guidance and procedure to offer an approach to the low-cost resolution of disputes and facilitate good mediation.
The CIC has just launched the 2019 first edition of its MMAP. The CIC represents the industry and has a long list of impressive associated industry organisation covering engineering, architecture, construction, design, surveying and more. The MMAP
provides a mediation procedure and an agreement for parties to use in order to try to resolve any engineering or construction dispute. A model mediation clause is provided for parties to include in their contracts, which then includes, by reference,
the MMAP. Regardless of whether the MMAP is referred to in a contract, parties to a dispute could simply adopt the CIC’s procedure in order to govern an attempt to resolve their conflict by mediation.
The procedure is a combination of contractual terms and prescription. In other words, the key terms as to confidentiality, mediator appointment and payment (among other terms) are set out, but the agreement also describes the mediation procedure.
The benefit of this approach is that the parties know what to expect during the mediation process. A party that is new to mediation will have an immediate understanding of how the CIC process should work and what is to be expected along the way.
For example, the MMAP anticipates that each party will have skilled representation and a lead negotiator, and that the mediator will challenge the parties in private sessions, and so the parties should expect to be challenged about their positions.
This approach prescribes what should happen during the mediation and prepares those who are new to mediation for the inevitable.
The MMAP is suited to any type of construction dispute. The procedure paves the way from mediator selection to conclusion of the mediation. The parties will know what to expect from the mediator. For complex disputes, or where the parties are more
sophisticated, they or the mediator can of course expand or amend the process to suit the particular needs of the parties or the dispute.
The MMAP caps the mediation fee at £6,000 (excluding expenses) for any mediator from the CIC panel of mediators for a mediation with a claim value of less than £100,000 (exc VAT). Some mediators might offer more competitive capped fees,
perhaps following the sliding fee scale offered by the Centre for Effective Dispute Resolution for lower value claims. Nothing in the MMAP stops the parties and mediator agreeing a lower fee. No doubt higher value claims will attract higher fees
in order to take account of the preparation time and skill required of the mediator. The CIC will provide a list of three suitable mediators or appoint a mediator for a fee of £300.
It remains to be seen if the industry embraces this new mediation agreement and procedure, but with the support of the CIC, a publisher and the long list of supporting industry bodies, there is a good chance that we will see the MMAP used in practice
Nicholas Gould is a partner at Fenwick Elliott LLP and visiting professor at King’s College London. Gould is vice president of the ICC’s Arbitration Commission and past chairman of the Society of Construction Law. The IBA’s 2008 and 2013 edition of International Who’s Who of Business Lawyers Today listed Gould as one of the ‘ten most highly regarded individuals internationally for construction law’.
Interviewed by Julian Sayarer.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
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