Guide to Using the RIBA Professional Services Contracts 2018 - Other - Page 72
Contract terms
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decision of an adjudicator. The court has only limited powers in relation to arbitration
proceedings, but may decide any question of law referred to it with the consent of
the parties to the dispute. The court’s decision will usually be given without right of
appeal to a higher court.
What is litigation?
Litigation is a means of resolving a dispute in the courts between one or more
parties who are unable to settle it between them by agreement irrespective of the
size and scale of the issue. The parties will have to state their cases, first of all in
preaction correspondence and then in a succession of court documents. At one
level, the succession of procedural stages makes it ever clearer who has the better
case and is more likely to win. At another level, each round costs each side ever
more money, creating a commercial imperative to compromise. It can, and often
does, happen that the party with the better case is the one less able to take the
financial risks of proceeding.
If a dispute or difference between Client and Architect/Consultant is to be
decided by litigation it will usually be referred to a judge with construction industry
experience. Unlike Arbitrators, judges are bound by the Rules of the Supreme Court
and the rules of evidence. However, they may take an active part in the early stages in
order to encourage economy and expedition in bringing the case to trial. Judges have
a range of powers available, which are not dependent on the consent of the parties.
Any party to the dispute may join a third party in the action if there is due cause.
There is an unrestricted right of appeal to the Court of Appeal on questions of law
and, with leave, on questions of fact.
Costs
RIBA Conditions provide that the party ‘who successfully pursues, resists or defends
any claim or part of a claim brought by the other’ shall recover:
• such costs reasonably incurred and duly mitigated (including costs of time
spent by principals, employees and advisers) where the matter is resolved by
negotiation or mediation
• such costs as may be determined by any tribunal to which the matter is referred.
The first scenario might arise if the Client does not pay fees due. As professional
indemnity insurance does not provide for recovery of fees, if the Architect/Consultant
is unable to resolve the issue by negotiation, the option of suspension or debt
recovery may be adopted. In either case the late payment provision includes the
recovery of reasonable costs.
However, if the client makes a successful claim for negligence, which is referred
to the courts, adjudication or arbitration, the recoverable costs that the Architect/
Consultant can claim will be determined by the second scenario and/or the defence
costs reasonably incurred and duly mitigated should be covered by the professional
indemnity insurance. In most cases referred to a formal tribunal, the Architect/
Consultant is likely to suffer financial loss, even if without fault.
Provision is also made for an adjudicator to allocate between the parties the costs
relating to the adjudication, including the fees and expenses of the adjudicator.
The costs at arbitration, including the arbitrator’s fees and expenses, hire of
premises, etc., and the costs of the parties are allocated in the award and usually
borne by the losing party, although an issue-based order may be made.
In litigation, apart from court fees, no fees are payable for the judge or for use of the
court. The costs of the parties will generally be allocated in the decision of the court
and usually borne by the losing party.
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