Definition

In an APC context, dispute resolution procedures are the formal and informal mechanisms by which parties settle a disagreement once direct negotiation has failed. They range from voluntary, non-binding processes such as mediation to final and binding procedures such as arbitration and litigation. Surveyors must understand each procedure and advise clients on the most appropriate option.

Why this matters for Conflict Avoidance, Management and Dispute Resolution

  • Level 1 knowledge: you must be able to name and describe at least five dispute resolution procedures and state whether each produces a binding outcome.
  • The wrong procedure choice can cost the client thousands of pounds and destroy a commercial relationship; competent advice on options is a core professional service.
  • Construction contracts typically specify an agreed procedure — surveyors administering contracts must know what that procedure is before a dispute arises, not after.
  • Courts actively encourage alternative dispute resolution; unreasonable refusal to engage can lead to adverse costs orders under established case law.

Key principles

Negotiation and mediation

Negotiation is direct discussion between the parties, often assisted by their professional advisers. It is voluntary, informal and binding only if reduced to a signed settlement agreement. Mediation is a voluntary, confidential process in which a neutral third party facilitates negotiation without imposing a decision. Any mediation settlement is binding only once signed as a contract. Both are fast, cost-effective and relationship-preserving. The RICS Dispute Resolution Service can appoint mediators and the Centre for Effective Dispute Resolution (CEDR) is the leading specialist provider in the UK.

Expert determination and adjudication

Independent expert determination involves appointing an expert who uses their own knowledge to decide the issue; the decision is contractually binding and challengeable only on very narrow grounds such as manifest error. Adjudication is a statutory procedure under the Housing Grants, Construction and Regeneration Act 1996: either party may refer at any time and the adjudicator must decide within 28 days. The decision is interim binding — enforceable immediately, pending final resolution by arbitration or litigation.

Arbitration and litigation

Arbitration under the Arbitration Act 1996 produces a final, binding, confidential award that is enforceable as a court judgment. Rights of appeal are very limited (sections 67 to 69 of the Act). Litigation in the County Court or High Court is public, governed by the Civil Procedure Rules and carries a structured right of appeal. It is the appropriate route where an injunction, a public declaration or a judgment in default is needed. Both are slower and more expensive than ADR and should be treated as last resorts.

Choosing the right procedure

The key factors are: cost, speed, confidentiality, whether a binding outcome is needed, the importance of preserving the commercial relationship, and the nature of the dispute. Check the contract for a specified procedure first. Use the lightest-touch process that can resolve the dispute effectively — escalate only when necessary.

Relevant RICS guidance and legislation

  • Housing Grants, Construction and Regeneration Act 1996 — gives the right to adjudication in construction disputes.
  • Arbitration Act 1996 — governs arbitration procedure, the arbitrator's powers and the very limited rights of appeal.
  • Civil Procedure Rules — govern litigation procedure and contain provisions encouraging ADR before and during proceedings.
  • Pre-Action Protocol for Construction and Engineering Disputes — requires information exchange and a pre-action meeting before proceedings are issued.
  • RICS Dispute Resolution Service (DRS) — provides appointment services for mediators, adjudicators, arbitrators and independent experts.

Ethics and Rules of Conduct angle

The RICS Rules of Conduct require members to recommend the procedure that best serves the client's objectives — not the most familiar or most lucrative. Recommending litigation without first exploring ADR options, or failing to advise that unreasonable refusal to mediate can attract costs sanctions, falls short of the service standard. Where the surveyor acts as adjudicator, expert witness or arbitrator, a different duty applies: absolute impartiality and independence.

APC-style Q&As

Q (Level 1)List five dispute resolution procedures in order from least formal to most formal.

Negotiation, mediation, expert determination, adjudication, arbitration (and litigation at the most formal end). The binding effect increases as you move along the spectrum: negotiation and mediation produce binding outcomes only if the parties sign a settlement; expert determination and adjudication produce binding decisions; arbitration produces a final award with very limited appeal rights.

Q (Level 1)What is the key difference between adjudication and arbitration?

Adjudication is a statutory right in construction contracts under the Housing Grants, Construction and Regeneration Act 1996 that produces an interim binding decision within 28 days. Arbitration under the Arbitration Act 1996 is a private, consensual process producing a final binding award. Adjudication is faster and cheaper but the decision can be revisited in arbitration or litigation; an arbitral award is final with very limited appeal rights.

Q (Level 2)A client has a disputed rent review with their landlord. What procedure would you recommend and why?

I would check the lease first — most commercial leases specify referral to an independent expert or arbitrator for rent review disputes. If the lease is silent, I would recommend mediation first: it is faster and cheaper than formal proceedings, preserves the landlord-tenant relationship, and can narrow the comparables quickly. If mediation fails, I would proceed to expert determination or arbitration as agreed.

Q (Level 2)What is the consequence of unreasonably refusing to engage in mediation?

Under the Civil Procedure Rules, a court may impose adverse costs orders on a party who unreasonably refuses to engage in ADR. A winning party who refused mediation without good reason may recover less of their costs than expected — the court takes into account whether the parties genuinely attempted resolution before litigation.

Q (Level 3)Your client is owed £180,000 by a contractor who disputes the final account. The contractor is threatening to go into administration. What resolution strategy would you advise?

(example) Given the insolvency risk, speed is paramount — I would advise immediate adjudication under the Housing Grants, Construction and Regeneration Act 1996. An adjudicator must decide within 28 days, giving the client an enforceable decision by summary judgment before administration proceedings begin. Mediation could take weeks and might not produce an enforceable outcome in time. I would advise the client to preserve retention funds, take legal advice on any retention bond, and compile the evidential file — contract, payment notices, pay-less notices and correspondence — so the referral notice can be issued without delay.