Try this

Did you read the column in Building written by small builder Alan Danieli (29 April, page 40)? He had stumbled into two disputes with what he called “cowboy clients”. He is talking about pesky Mr & Mrs Customer. In one dispute he is owed £46k and in another £26k. And he complains bitterly about the staggering costs of operating the legal machinery; hell it runs more than £200 an hour. So he has caved in. Retired hurt. He thinks that it is too easy for a customer to not pay then dare the builder to litigate, knowing that it will more than likely walk away.

He has a point. Come to think of it I have been telling you horror stories at the consumer and small builder level for years. I take three things for granted.

First, disputes are ever so ordinary. They are even more ordinary when the customer is Mr & Mrs Consumer. To be blunt, the complaining society is deeply embedded in Mr & Mrs Consumer’s psyche. So, dear builder, when they complain about the quality of the plastering watch out for what hits that well-known fan. The second thing to take for granted is that all builders become cowboys once a dispute has begun, according to the customer. Third, your customer really believes that they are right. And if you want your money, it costs an arm and a leg to get it.

I have no doubt that disputing parties will sooner or later require a neutral third party to make a binding decision and thereby dispose of their quarrel. Traditionally, that means a court or an arbitrator. Ordinarily each side persuades itself to pay to employ a team to fight its case.

But what if neither side can stump up all those fees? Mr Danieli would walk away. His offer to mediate has already fallen on deaf ears. But what if one person and only one person were engaged by both parties to the building contract to be an arbitral investigator?

In litigation or ordinary arbitration, the day of the trial arrives and lawyers explain what each team has investigated and learned, and explains why A should win not B. And, if an ordinary building dispute is about quality complaints, defects or change orders, the trial can run for however many days. The costs per day are embarrassing.

But what if neither party A nor B can rake up the money to pay for a support team? That means that neither A nor B will have a lawyer to inquire into contractual rights or contractual breaches. Neither A nor B will be competent or experienced enough to show causal links to losses. Lawyers do all that. Nor will A or B be able to afford expert witnesses or give evidence of values for change orders. And remember that while A is doing all this investigation and working-up, B is similarly spending its time. None of this is a problem with an arbitral investigator, because they do all of that work instead.

Try this

Yes, yes I know that this is a job for a special individual, and yes, I know that this single person still has to be paid. And yes, I accept that it is a far cry from simply deciding a dispute on the materials brought by A and B. But remember that A and B are, in truth, not competent by themselves to present their case, nor can they afford lawyers. So this arbitrator doesn’t wait for A and B’s lawyers and experts to explain the case. Instead he digs and delves all by himself. He finds which promises were broken. He looks for the defects in the complaints raised by Mr & Mrs Consumer. He doesn’t need an expert opinion because he is an expert himself. And if evidence is needed, the arbitral investigator tells the parties who and what to bring for questioning.

It is hopeless to let unrepresented parties bring a building dispute to ordinary arbitration or before a court. Ordinary tribunals rely on the “evidence before me”. But not so an arbitral investigation, which means that it is ideal for low value consumer disputes. But it does need properly explaining and it also required unequivocal agreement from the parties – probably after the dispute has arisen. The real danger for Mr Small Builder comes when the arbitral investigator finds that in truth it isn’t owed a bean.

On the other hand …

Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on info@tonybingham.co.uk

This arbitrator doesn’t wait for A and B’s lawyers to explain the case. And he doesn’t need an expert opinion because he is an expert himself