Multi-tier dispute resolution clauses in construction contracts
Disputes arising from construction contracts have been a fertile ground for developing novel methods of dispute resolution. The wholly commendable aim can however create difficulties that render the multi-tier clauses a burden for a claimant and an opportunity to delay resolution of the dispute by a defending party. The first problem with such clauses is that they very often require all disputes to pass a number of hurdles before they can be resolved. Secondly, multi-tier clauses stem from the wish of commercial people to try to agree resolution methods that allow them to keep control of matters within the area of negotiation and agreement and that provide for quicker and cheaper methods of dispute resolution than arbitration or litigation. The court held that an agreement to attempt to resolve a dispute without any particular conditions as to how that was implemented was not a condition precedent to court proceedings.