Practical Law

The people of London and the UK should be proud of the London Underground, and there is absolutely no doubt in my mind that without it, London would not be the international powerhouse it is today. Imagine if all of the journeys made by tube each day were made by bus and car? Chaos would ensue.

The tube is now 150 years old and stations have been upgraded due to their age and wear and tear, as well as to accommodate other developments in London. Currently, many of the stations that are at interchanges with Crossrail are undergoing redevelopment. For example, Bond Street is currently in the midst of a £300 million upgrade in order to cope with the expected increase of 70,000 passengers per day.

Given the scope and complexity of projects such as Bond Street, TfL and its contractors are realistic enough to know that there is the potential for disputes. While adjudication is obviously available to them, the need was identified for something more flexible and less adversarial, in order that disputes could be “nipped in the bud” at an early stage. TfL and its contractors have therefore worked with RICS and together they have developed a Conflict Avoidance Panel (CAP). I am on the list of available CAP members, so thought I would try and answer some FAQs.

What is the CAP?

I can hear some of you muttering to yourselves that the CAP is simply a dispute board under a different badge, but not so. The CAP is not intended to be a standing board. Rather, it is a panel of between one and three people that can be appointed at short notice when issues arise and produce a non-binding recommendation within 21 days of the appointment.

What’s involved?

RICS has produced some excellent guidance on the CAP process, and I’ll try and summarise some of the key features:

• Either party may refer a dispute to a CAP.
• In the first instance, the parties will attempt to agree on the identity of the CAP member/s but, if they can’t, then they can ask RICS to nominate members. RICS will select an appropriately qualified person to deal with the particular issue(s) on which the parties require a non-binding recommendation. RICS has established a list of CAP members including lawyers, engineers, architects and surveyors.
• The idea is that the dispute will be referred to the CAP within seven days, a response will be issued within a further seven days, and the recommendation will be issued seven days after that, that is 21 days in total (and you thought adjudication was speedy!). The timetable can be extended if required, and meetings and site visits incorporated.
• While the recommendation is non-binding, if a party is dissatisfied with the recommendation they must notify the other party within seven days of the publication of the recommendation.

How is the CAP procedure incorporated into the contracts?

Obviously, the CAP procedure needs to be reflected in the parties’ contracts. TfL contracts are based on the NEC with Option W2 amended to allow either party the option of using the CAP process. I won’t recite all of the clauses, but two of the most relevant are W2.A.2 and W2.A.5:

“W2.A.2 Subject to clause W2.1, any Dispute may in the first instance be referred to a Conflict Avoidance Panel by notice in writing from the referring party to the other party.  The parties to the Dispute endeavour to agree upon (a) the person(s) whom they would consider suitable to act as the member(s) of the Conflict Avoidance Panel and (b) the number of member(s) of the Conflict Avoidance Panel (which as a general principle depends upon the issues in dispute but is always an odd number).  In the event of the parties to the Dispute failing to reach such agreement within 14 days of receipt by the responding party of notice pursuant to this clause W2.A.2, either party to the Dispute may request the RICS to nominate the member(s) of the Conflict Avoidance Panel (including determining the number of member(s) of the Conflict Avoidance Panel, which as a general principle depends upon the issues in dispute but is always an odd number).  Any person selected to act as a member of the Conflict Avoidance Panel (a) is a natural person acting in his personal capacity and (b) is not an employee of any of the parties to the Dispute and declares any interest, financial or otherwise, in any matter relating to the Dispute.

…

W2.A.5 Within 7 days of receipt of the response pursuant to clause W2.A.4 (or such longer period as may be agreed by the parties to the Dispute), the Conflict Avoidance Panel notifies the parties to the Dispute of its recommendation(s) for avoiding or resolving the Dispute. The notice is in writing and includes a summary of the Conflict Avoidance Panel’s findings and a statement of its reasons for the recommendation(s).  The recommendation(s) is (are) not binding upon the parties to the Dispute.”

Why don’t the parties just adjudicate?

The answer is complicated but, for parties working together on projects that may take a number of years, adjudication can be too adversarial and damage working relationships. On larger disputes, adjudication also has a habit of turning into a costly and time-consuming mini arbitration.

On the other hand, CAP recommendations should provide both parties with impartial guidance during the course of projects, which will help them to make informed judgments on the way forward. While the CAP recommendation will address the issues raised by the parties, the CAP is at liberty to introduce alternative recommendations if it comes to the view that such recommendations might be of assistance to the parties. The objective is to try and safeguard against issues escalating uncontrollably and to avoid the need for adjudication, or even litigation.

Move down the carriage

Personally, I think that this process reflects the desire of TfL and its contractors to work collaboratively to avoid conflict and resolve potential disputes quickly and amicably. A number of CAPs have already been appointed and the feedback is very positive.

Perhaps TfL and RICS could now put their minds to resolving other issues on the tube, for example getting people to move down the carriage when it’s busy or standing out of the way when they are in the doorway to let others off and on!

With so many of us going underground, there has to be room for us all.