DISPUTES OPTIONS

Here we have some options that are available to you for sorting out disputes when things start to go wrong on your project.

The Options
If you see something going wrong on your project, talk to the contractor, architect, designer or builder (the main person responsible for your project) about your concerns. See if you can sort it out by clearing up any misunderstandings - do not leave it hoping that the problem will go away.
If you have a serious breakdown in communication, your options for resolving problems or disputes are:

• Disputes Tribunals will deal with disputes up to $7,500, or $12,000 with the agreement of the parties.
• If your concern is with a member of the NZMCPA click here for our disputes resolution.
• The Consumer Guarantees Act says any service contracted by a consumer should be carried out with reasonable skill and care. It should be at a reasonable price and fit for its purpose.
• The Construction Contracts Act may have limited use for consumers as it is aimed primarily at aiding the flow of money between building professionals, i.e. contractors and subcontractors.
• Arbitration. The Arbitrators and Mediators Institute of New Zealand can give you the names of local arbitrators and mediators with relevant expertise.
• Court action. This is usually the last (and most expensive) approach to resolving problems. If you’ve already gone through arbitration or a Disputes Tribunal this option is usually closed to you.

Comparing the different options
The advantages and disadvantages of some of the types of dispute processes are listed in the table below:

Is mediation the best option?
Mediation has more advantages and fewer disadvantages than the other options and is probably the most popular option to resolve disputes. Suppose you have moved into your home and discover a short time after the concrete has been laid you have problems with the quality. The concrete placer blames the concrete supplier and visa versa the supplier blames the placer a stale mate. One way to resolve the matter is to go to mediation.
The advantages are:

• The cost (5 - 10% of full litigation costs).
• The speed – you should get it arranged and completed within one or two months and the actual mediation only takes a matter of hours, or at most a few days, depending on the complexity.

Mediation as a compromise
You need to go into mediation with the understanding that mediation is all about coming to a compromise. You might have to forgo some of what you see as your legal rights in the matter, i.e. they’re wrong and I’m right.
You will be advised that if you and the other party can’t reach an agreement the case has to go to Court, which will cost you in terms of:

• Time and emotional energy.
• Damage to ongoing relationships with the other party – you still want the problem fixed
• Legal expenses.

Even if mediation fails, often the parties will agree to settle, without either admitting they were in the wrong, to avoid the Court process.

The process is confidential

Everything that happens in the mediation is usually confidential so anything said, or produced in writing to support a position, cannot be repeated outside the mediation room. It is up to the parties to decide whether they want the mediation to be kept confidential. The final terms of the settlement are also usually confidential, except where disclosure is required by law or to enforce the settlement agreement.

Arbitration
There may be an arbitration clause in your contract with your concreter or designer. Even if there is not, you can still choose to take your dispute to arbitration. Arbitration is governed by the Arbitration Act 1996.
If you are initiating arbitration, you need to sort out your facts, establish the real issue in dispute and decide who could be witnesses for your side. You will need to talk with the other side to decide who should be the arbitrator and the venue for the arbitration hearing. It is advisable to obtain legal advice before you begin arbitration proceedings.
At the hearing you will have the opportunity to summarise your argument and present your witnesses. The other side then has an opportunity to present their case. The arbitrator can award any remedy or relief that the High Court could have ordered.
You are not bound by the arbitrator's decision unless you have a separate written agreement certifying that you have read and understood the arbitration and agreed to be bound by it. There is a limited right to appeal (generally this is limited to appeals on points of law or procedure),
Usually the arbitrator’s fee is paid by the unsuccessful party. But in some cases you can agree beforehand on a formula for sharing the cost.

Finding mediators or arbitrators
The Arbitrators and Mediators Institute of New Zealand can give you the names of local arbitrators and mediators with relevant expertise.

Other Information:

• Fair Trading Act (1986)
• Consumer Guarantees Act (1993)
• Disputes Tribunal
• Citizens' Advice Bureau
• Consumers' Institute of NZ