An investigation into the mediation of disputes in the South African construction industry

Master Thesis

2002

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University of Cape Town

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The construction industry is a unique and complex industry in which numerous different participants depend directly on each other in order to fulfil their separate functions and obligations. Recent years have seen an increase in conflicts and disputes within the industry, such that conflict and dispute are now considered endemic to an adversarial industry. This increase in conflict and dispute, together with the dissatisfaction with the traditional methods of resolving disputes, namely litigation and arbitration, have led to an increase in the growth of alternative dispute resolution (ADR) processes within the industry. The dispute resolution process most frequently referred to in literature on ADR is mediation. The process of mediation, while being flexible and informal, is underpinned by definite principles and objectives. In principle, mediation is a voluntary, non-binding and confidential process involving a neutral third party who assists the disputing parties in reaching a settlement. There are different approaches to mediation, each determined by the degree of intervention into the dispute by the third party. However, no matter the approach taken by the mediator, the main objective of mediation remains for the mediator to assist the parties in reaching an outcome on which they can mutually agree. Mediation has been used in the South African construction industry for settling disputes for the past couple of decades. However, no certainty exists as to the nature of the actual practice of mediation. This research, therefore, seeks to determine whether the practice of mediation in the South African construction industry is consistent with the principles of the mediation process. The hypothesis that is tested by the research is that the practice of mediation in the South African construction industry is not consistent with the generally accepted principles of the mediation process. In order to test such a broad and complex hypothesis, three sub-hypotheses were developed. The first being, that, construction industry mediators do not assist the disputing parties in determining their own settlement. The second, that the main stages that characterise the mediation procedure are the collection of information on the dispute by the mediator and the formulation of a solution by the mediator. The third, that the knowledge and utilization of specific mediation process skills and techniques are limited amongst construction industry mediators. Primary data were collected by way of 63 questionnaires received from the 206 posted to mediators recognised nationally by the South African Institution of Civil Engineers and the South African Association of Consulting Engineers, as well from mediators listed by the Western Cape Branch of the Association of Arbitrators of Southern Africa. The questionnaire responses were analysed using basic descriptive statistics, and these results were used to assist with the interpretation of the responses. The research reports on the occurrence of the practice wherein parties to mediation undertake, prior to the commencement of the mediation, to be bound by the mediator's decision, and concludes that this practice cannot constitute mediation. The research reveals mediation in the construction industry to be a mediator-owned process rather than a party-owned process, and concludes that this tendency is promoted by the terms of certain contract documents and published guidelines. It was also found that the mediators perceive their role as being to resolve the dispute using their own technical knowledge and expertise, rather than using specific mediation skills and techniques. Finally, it was concluded that the practice of mediation in the South African construction industry is not consistent with the generally accepted principles of the mediation process, as, the mediators do not generally assist the parties with determining their own settlement, instead the mediation activities centre mainly on the collection of information on the dispute by the mediator and the formulation of a solution by the mediator. The research showed that the mediators' knowledge and utilization of specific mediation process skills and techniques were limited.
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Bibliography: leaves 112-118.

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