Robert Jackson and Peter McHugh examine the technical and legal boundaries of disputes and their resolution for tunnelling, directional drilling and underground construction.
To date the UK tunnelling industry has not chosen to drastically change its approach to disputes but is keen to avoid them when they are likely to become expensive.
The sector remains adversarial and a fertile ground for conflict.
Altering the habits and practices of the industry remains a difficult process and there still needs to be a change in the way companies conduct business.
The Housing Grants, Construction & Regeneration Act (1996) specifically targeted the adversarial nature of the construction industry, with legislation aimed at reducing litigation, but it has left many unanswered questions and prolonged disputes in its wake.
Dispute resolution techniques which can be employed during the construction process offer the possibility of improving relations and productivity. Part of the aim of the act and the Civil Procedure Rules was to speed up the process of resolving construction and civil engineering disputes.
The question is: has it worked?
And what options do companies now have to obtain a quick, cost effective result to a dispute?
It is no longer a case of simply launching into court or arbitration proceedings. Individuals do so at their peril. The first stage is to go down the 'Pre-action Protocol' route which applies to all construction and engineering disputes.
The objects of the protocol are to encourage early exchange of full information about the prospective legal claim; to avoid litigation by agreeing a settlement of the claim before proceedings start; and to support efficient management of the proceedings where litigation cannot be avoided.
The protocol process involves the claimant sending a letter of claim and waiting 14 days for the defendant's acknowledgement. If the defendant fails to acknowledge, the claimant is entitled to commence proceedings without further compliance with the protocol.
If there is an acknowledgement, the claimant must wait a further 14 days to receive the defendant's full response and thereafter the parties are encouraged to meet.
The aim of the meeting is for the parties to agree the main issues in the case, to identify the root cause of the disagreement in respect of each issue and to consider whether the matter might be resolved without having to start court proceedings.
The Civil Procedure Rules brought about changes that were clearly going to affect the construction industry when it came to disputes.
Rule 1 states that the overriding objective of the rules is to enable the court to deal with cases justly.
CPR Rule 1.4(2)e says the court must encourage the parties to use alternative dispute resolution procedures (ADR) if appropriate.
Rule 44.3(5)a provides that the court may take into account the conduct of a party before proceedings are issued and in particular whether the parties followed any relevant Pre-Action Protocol.
Litigants and their advisers should be aware that even after proceedings have been issued they may face strong judicial pressure to embark on ADR or face adverse cost consequences.
So what ADR procedures are open to you?
Section 108 of the Housing Grants, Construction & Regeneration Act gives a party to a construction contract the right to refer a dispute to an adjudicator for resolution. The process of adjudication is an investigative procedure which decides on the disputed facts and rules of law, and does so in 28 days.
The contract itself will normally set out the procedure for the referring party to get the dispute before an adjudicator and decided by him/her within 28 days.
If the contract fails to comply with certain requirements of the act, ie to impose a duty that the adjudicator shall act impartially, then the adjudication process can still proceed, albeit under the provisions of the Scheme for Construction Contracts, which sets out the necessary mechanism and timetable for the appointment of the adjudicator right through to the giving of their decision.
Adjudication is here to stay, since disputing parties like the idea of avoiding lengthy expensive court proceedings. The decision is legally binding and if one party does not agree with the decision they have no right of appeal (thereby seeking to avoid or prolong matters).
Instead, an unhappy party's only option is to either accept the decision or issue court or arbitration proceedings to have the whole matter decided again, at a much later date by a judge or arbitrator.
Mediation is also being increasingly used to resolve construction disputes. However, unlike adjudication and expert resolution, mediation does not produce a binding decision and it is up to the parties to make the decision to resolve the dispute assisted by the mediator. The decision can then be confirmed in an agreement or by court order, when it becomes legally binding.
Experts are playing a more important role in resolving disputes that have already been taken to court and as case management brings forward the detailed investigation of a technical case, then essential input from expert witnesses should be sought as soon as possible.
Apart from the usual allegations in terms of expected ground conditions, key issues relating to causation and liability in tunnelling disputes often revolve around the contractor's failure to carry out the works with the proper skill and care to be expected of a specialist tunnelling contractor, by:
lfailing to adopt construction practices necessary to achieve the permanent works lfailing to adequately limit surface settlements lfailing to adopt working methods and systems to adequately control the ingress and removal of water lfailing to construct the works in accordance with the contract lfailing to accurately construct within an acceptable overall construction tolerance.
Similarly, directional drilling disputes often refer to allegations in terms of:
lboring accuracy and the ability to carry out the work lthe adoption of good drilling practice lthe suspension of drilling operations la relaxation in specified tolerances lthe composition of the drilling fluid to impart the desired characteristics to fit the soil conditions, so that drilling progress was not stalled with a change in sub-surface drilling conditions.
The Academy of Experts and the Technology & Construction Court Solicitors Association have produced an expert witness protocol which provides a guide to the appointment of expert witnesses, their role and involvement in any proceedings and their relationship with instructing solicitors.
If experts are appointed after proceedings have been issued, the claimant and/or defendant may already have been given overly optimistic legal advice and may, therefore, have unrealistic expectations of the likely outcome of the dispute.
However, if an expert is involved from the outset, the client will benefit from timely, objective advice which may have a considerable bearing upon whether to pursue or defend a claim. It will also allow the opportunity to liaise with the instructing solicitor, to identify strengths and weaknesses and permit a strategy to be planned free from the pressures of compliance with a procedural timetable.
CPR 35.1 places a duty on the court to restrict expert evidence.
It reads: 'Expert evidence should be restricted to that which is reasonably required to resolve the proceedings.' Rule 35.6 contains a provision dealing with the ability of the parties to put questions to the experts and Rule 35.7 gives the court power to direct that evidence is to be given by a single joint expert.
The provisions of the Civil Procedure Rules make it clear that the obligation of the court is to deal with cases justly. If, having agreed to a joint expert's report, a party subsequently wishes to call evidence, possibly because it is unhappy with the way the joint expert has failed to address the technical issues, it would be unjust, having regard to the overriding object of the Civil Procedure Rules, not to allow that party to call that evidence.
Indeed these were some of the comments of Lord Woolf Master of the Rolls who, when dealing with the question of appointing a single joint expert in a personal injury case called Daniels vs Walker Weekly Law Report 7 July 2000, stated that 'where a party sensibly agrees to a joint expert-the fact that a party has agreed to adopt that course does not prevent that party being allowed facilities to obtain a report from another expert or, if appropriate, to rely on the evidence of another expert.'
Professor Robert Jackson of the School of Aeronautical, Civil & Mechanical Engineering at the University of Salford is a Member of Council of the Academy of Experts and regularly acts as an independent expert witness for tunnelling and directional drilling disputes. Peter McHugh is partner and head of construction law at Challinors Lyon Clark Solicitors, Birmingham.