When a dispute arises over a building contract, there are four courses of action that can be taken to have it resolved. These include mediation, independent expert determination, arbitration and litigation. The JBCC (Joint Building Contracts Committee) contracts are the most widely used in South Africa and they make provision for all four. This month we take a look at the one of the simplest options – mediation.
What does mediation involve?
Mediation is a voluntary, non-binding, private dispute resolution process which enables the parties involved in the dispute to reach a negotiated settlement. The main advantage of mediation is that the parties control the outcome of the settlement rather than having one imposed upon them.
What procedures need to be followed?
The parties need to agree to mediation as a means to resolve their dispute and agree upon the person to be appointed as mediator within 15 working days of the declaration of the dispute. According to the JBCC Principal Building Agreement (PBA), the parties are required to meet with the mediator to agree dates and procedures. The mediator works towards finding a settlement of the dispute that all parties agree to. He has to record this settlement in writing and after it is signed by the parties, it becomes final and binding, resolving the dispute.
What if no settlement is reached?
If no settlement is reached within 45 working days or earlier if no progress is made, the mediator will end the mediation proceedings and within 10 working days he will record the termination of proceedings in writing to the parties. Thereafter the dispute is either referred to arbitration or litigation.
Who pays?
Each party bears its own costs and shares equally all other costs, according to the PBA. The mediator is permitted to act as an expert to resolve the dispute.
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