Building Dispute Resolution in the Third Millennium

Tuesday, November 18th, 2014
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The use and deployment of construction lawyers in the resolution of building disputes has changed profoundly in the post GFC world.

Competition amongst law firms is fierce, expectations by clients are higher than ever and downward pressure on legal fees is gaining momentum. The catch phrase “too many lawyers, not enough work” is becoming a well worn cliché.

In this new world, there will be construction lawyers who  adapt and survive and practices that perish. The post GFC world heralds the arrival of a far more sophisticated purchaser of legal product, regardless of whether the consumer of construction law services is institutional or “main street.” Back in the day too many building disputes turned into juggernauts, where the lead advocate headed up a gladiatorial pyramid, flanked by junior counsel, an army of building consultants, instructing solicitors and other human resource accoutrements. The cost of construction dispute resolution became “eyewateringly” expensive.

Building cases became bogged down in technicalities, pedantry, semantics, adversarial belligerence and polarisation, and cases often assumed a life of their own, as hard to stop as a runaway train. For some reason construction disputes attracted some of the hardest heads and when foes locked horns some cases took on a life of their own as negotiation bridges closed and the concrete of adversarial polarisation  firmed and hardened. It was reminiscent of the line from Macbeth, “I am in blood steeped so far that should I wade no more, returning were as tedious as go`er.” And there were casualties – namely contractors, sub contractors and building practitioners – all of whom expended huge sums of money and massive nonproductive down time whilst “steeped” in the mire of the litigation juggernaut.

This type of litigation has lost its cachet and is considered to be redundant as ADR has come into its own.

The new paradigm 

These days before building lawyers are even considered, building industry stakeholders, even insurers are using their level best to try and negotiate a compromised outcome. They realise the deployment of lawyers will cost time and money and will repudiate commercial relationships. Whereas a couple of decades ago, in contentious building conflicts there may have been a tendency to fight in order to win the point, these days the savvy operators tend to fix the problem, cut their losses and move on.

If this is not possible and the dispute gets to the lawyers, there is an expectation that the construction lawyers and building consultants will carefully and candidly assess the strength of the case in order to work out the most cost effective way of achieving an outcome. It`s incumbent upon the lawyer to use his noggin and develop a fast track dispute resolution strategy, a strategy that will contain and kill the dispute rather than escalate it.  There is an expectation that the lawyer will quell the fire rather than dousing it with gasoline. The old fashion “head kicker” is a dinosaur.

The prototype construction lawyer of the future, mindful of the fact that the future has arrived, must dispense with his or her Jurassic pugilistic armoury and embrace the new attire of negotiation, mediation, complemented by a non-adversarial and solution driven disposition.

If the lawyer cannot “morph” into the new prototype, i.e. a construction lawyer  for the third millennium, then he or she can’t expect  return work and return briefs, because the client will look for building lawyers who can solve problems, kill off the dispute and generate commercial outcomes.

So great is the change in paradigm that one of my building barrister mates rued the fact that some of his colleagues were being compelled to leave the bar because court work was drying up. On message another acquaintance said two of his barrister colleagues were forced to put their houses on the market, such was the diminution in work they had liberate capital. Yet another buddy, a barrister of renown quipped that things have changed for good, they will never be what they were, such was the reluctance to litigate.

None of this is surprising because the new orthodoxy is the facilitation of early juncture dispute resolution, and one of the net effects will be fewer and fewer cases going to court and a lesser demand for “old school battle hardened  warriors”. That is not to say that the adversarial theatres like arbitration will disappear. They won’t, but they will become theatres of last resort, where the most complex of matters that are incapable of resolution will be operated upon and when all is said and done history has shown that the courts in particular do a stellar job in this regard.

With the change in paradigm, building lawyers and building consultants  will have to refashion the way they dispense the law and the provision of technical expertise. The maxims of cost effectiveness, commerciality, intelligent dispute resolution tactical deployment will have  to assume top of mind cognisance. Because the new consumer of legal product will not be impressed with a conflict getting out of hand, it has to be contained, put to bed, as quickly as cost effectively as possible.

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