Articles

By Professor Kim Lovegrove MSE, RML, Chair of the IBQC, Senior Lawyer, Lovegrove & Cotton – Construction and Planning Lawyers

Originally presented at the Society of Construction Law New Zealand’s 9th International Law Conference “Building for Change” 3-5 November 2021.

Essential Elements of a good practice building control regime

Over the last few years, the writer has been retained to identify and advise upon international good practice with regards to building regulatory systems in Japan, India, China and Southern Africa. In this capacity, the below flow-chart is promoted as encapsulating the essential elements of a good practice building control regime.[1]  A key part of the holistic framework is to have efficient conflict resolution systems for the resolution of civil disputes and building control appeals.

The writer has never promoted arbitration as a utilitarian dispute resolution mechanism in his capacity as an international law reform advisor. In no way is this a derogation of the virtues of arbitration.  Arbitration is uniquely equipped to develop sound dispute resolution outcomes within the context of multinational company major project collaborations in developing countries, where the local judiciary is not sufficiently capacitated to resolve high dollar value complex infrastructure disputes.

The utilitarian limitations are as follows:-

• Arbitration does not lend itself to consolidated multiparty legal proceedings for it is a creature of contract, and, as many disputes involve a number of responsible actors, a consolidated joinder in the one Dispute Resolution Theatre (DRT) action is unavailable.
• The cost of arbitrator retention would be prohibitive for most citizens in many jurisdictions, particularly emerging economies.

Dedicated Building & Construction Lists in Courts and Tribunals

Best practice jurisdictions feature DRTs that resolve disputes quickly and cost-effectively, where the decisions are handed down by very capable decision makers that comprise a blend of very highly legally qualified decision makers who have formalised access to technical expertise.

Dedicated construction lists in Courts and Tribunals are paramount. Across the Common Law world, many good practice jurisdictions have adopted specific lists for building litigation. This is due to the unique and significant nature of construction litigation.

In November 2019, the writer addressed a conference co-hosted by the World Bank,[2] the Beijing Municipal Government and the Ministry of Finance of the People’s Congress of China, in Beijing, where he enunciated the features of an international good practice dispute resolution Ecology, summarised as follows^[3]:

• Promulgated regulations that make mediation compulsory
• Dedicated construction dispute resolution divisions of courts and tribunals that specialise exclusively in the resolution of construction disputes
• Decision makers that work exclusively in construction dispute resolution theatres
• Independent expert review panels
• Fast track appeal bodies for building approval disputes

The above aspects capture the essence of an international good practice central dispute resolution system for the construction industry. Regardless of the jurisdiction that the writer is retained to provide good practice reform advice (be it emerging economies or high-income countries), the writer promotes that which was summarised above as being the essence of a progressive best practice dispute resolution matrix.

Promulgated regulations that make mediation compulsory

Mediation is a typical feature of formal dispute proceedings, but a well-functioning ADR solution is preferable to minimise costs for disputants and to free up public resources. Best practice DRT`s ensure that mediation occurs at an early stage of legal proceedings, or before the litigation process has formally started, in order to provide the disputants with the opportunity to avoid lengthy and costly dispute resolution scenarios.

The DRT appoints the mediator from an approved panel of expert mediators. Some jurisdictions such as the domestic building list of the Victorian Civil and Administrative Tribunal provide the mediators for free. Other jurisdictions appoint the mediators and insist that the parties remunerate the mediators on a 50/50 basis.

Independent expert review panels

It is the norm for separate experts to be retained directly by applicants and respondents. Experts owe their primary duty to the Court or Tribunal, but in practice there are quite diverging conclusions made by experts regarding the same matter and sometimes there is a perception of a bias towards those who retain them. In terms of technical diagnosis there should be no advocacy; rather, there should be clinical and arms-length analysis of causes of building failure or compromised construction outcomes. It is for this reason that when asked to devise a best practice expert testimony system the writer recommends that:

• The DRT have an accredited list of expert witnesses
• Accredited on the basis of them being venerated by peers of good repute

Instead of the adversaries retaining their own expert witnesses at a directions hearing, the jurisdictional decision maker will be apprised of the technical issues to be resolved whereupon an independent expert will be retained by the parties to diagnose failure and rectification costs. If the cause of the building failure is multi-faceted then a combination of experts with skills bespoke to the problem will be appointed by the DRT.

The parties will remunerate the experts on a 50/50 basis. The joint retainer is better suited to achieving impartiality, removes expert adversarialism and is likely to cut the costs and time of diagnostic analyses and solution engineering considerably.

 

Good practice – County Court of Victoria Single Joint Expert Witness Regime

The County Court of Victoria in its Building and Construction List Practice Note at clause 5.2 acknowledges the merit in the Court appointing a single joint expert. The Practice Note, however, leaves a great deal of discretion to parties: the parties will present a list of preferred experts to the “Judge in Charge” of the Building List and the JIC will thereafter appoint the expert. Parties may also attempt to persuade the judge to allow separate expert witnesses.

The Civil Procedure Act 2010 (Victoria) allows for the joint remuneration of expert witnesses.

This is still a fairly new practice note, and the extent to which the practice has been adopted is somewhat unclear; with disputants generally preferring expert conclaves and concurrent evidence (or ‘hot tubbing’). However, it is submitted that the Court’s practice note gives credence to the virtues of single joint expert witness testimony, with the view to lowering costs for litigants and ensuring greater impartiality.

The default approach to expert evidence in Queensland is that parties agree on a single jointly remunerated expert. If parties fail to appoint a single jointly remunerated expert for a technical fact in issue where they reasonably could have, then they bear the costs consequences of same. If the matter is too complex for a single jointly remunerated expert the parties, the parties will be entitled to choose partisan experts.

 

Fast track appeal bodies for building approval disputes

Some disputes do not necessarily suit the traditional judicial dispute resolution processes of Courts. Often, these kinds of disputes relate to building permit ecology where there may be, for example, appeals over a refusal by a building official to issue a building permit or occupancy permit. These types of disputes are more suited to be resolved by an appeals board that comprises legally and technically qualified artisans. The costs should be borne by the parties on a 50/50 basis.

An example of this is the Building Appeals Board in Victoria. The BAB has been in existence for decades and is held up by the writer as being a model of best practice in light of its capacity to facilitate timely decisions, where the expertise is of high calibre. The BAB was established under the Building Act 1993 (VIC). The fact that the BAB has been in existence for 27 years is evidence of sustainability.

The members of the board are preeminent in their fields and are Ministerial appointees. There must be a broad spectrum of expertise in terms of the decision makers ranging from building officials, to engineers, architects and construction lawyers. Most of the above will have other full-time jobs, typically in the private sector.

For urgent determinations on matters relating to building control, an applicant may request a “fast-track appeal” which may be granted in specific circumstances.

When called upon to adjudicate over a matter, a panel is convened and the registrar will choose experts that have skills that are bespoke to that which is under consideration. Applicants and respondents will appear with their legal advocates and technical experts and present their submissions.

The hearings rarely go for more than a day and decisions are normally forthcoming within the month.

The system does not visit a great financial burden upon taxpayers as board members are somewhat altruistic, but attain considerable kudos amongst their peers by virtue of their appointments.

The key benefits of the system are:-

• Hearings can be convened swiftly
• The multi-skilled composition of the panels lends itself to holistic and balanced decision making
• Decisions are generally published quickly
• The cost of the decision-making infrastructure is not great hence is attractive to Treasury.

Aggregation and centralisation of Dispute Resolution Theatres,

Depending on the jurisdiction, there may need to be harmonised legislative amendments in Civil Procedure laws and Building Legislation along with dialogue and agreement between the Parliamentary members vested with responsibility for the judicial process and Building Ministers to give effect to a good practice cross jurisdictional building dispute resolution paradigm. This is because variations in procedure as between jurisdictions may cause confusion, extra time spent, and extra costs. National consistency is an important ambition for any regulatory sphere, and is even more pressing in federalised nations.

Key take outs

The rationalisation and consolidation of dispute resolution apparatuses will be required to generate faster and more cost-effective dispute resolution outcomes. There should be an emphasis upon a cross-jurisdictional approach to specialist dispute resolution theatres, the establishment of less adversarial expert witness protocols, and promulgation of front-end alternative dispute resolution mechanisms.

 

About the Author: Professor Kim Lovegrove MSE RML

Kim Lovegrove MSE, RML is a senior construction lawyer at Lovegrove & Cotton Lawyers. He is regarded as an authority in Victoria and New South Wales on building regulation. He was retained by the Victorian Government to perform a principal role in the development of the Building Act 1993. He also headed up the team that developed the National Model Building Act that became a law reform template in a number of Australian jurisdictions in the nineties.

Kim is also a Senior International Law Reform Consultant to the World Bank in which capacity he assists the Bank with the provision of international best practice law reform advice on building regulations. He has been deployed in law reform advisory capacities in Mumbai, Shanghai, Beijing, Chongqing, Guangzhou, Malawi and Tokyo.

Kim is the Chairman of the International Building Quality Centre (IBQC) which is affiliated with the University College of London (UCL) and Canberra University.

Kim is an Adjunct Professor at the University of Canberra Faculty of Design and Arts, and is a past Conjoint Professor of Building Regulation and Certification at the University of Newcastle (New South Wales).

Kim is a past Chairman of the Building Practitioners Board Victoria, a past President for the Northern Chapter of the New Zealand Institute of Building, and a past President of the Australian Institute of Building (Victorian Chapter).

Kim was also awarded Ethiopian Honours for humanitarian services to Ethiopia by the Ethiopian Crown Council.

 

Footnotes

[1] Many of the key general elements are extrapolated from Adjunct Professor Kim Lovegrove MSE RML’s paper, Elements of Best Practice Building Control, see original paper at http://lclawyers.com.au/best-practice-building-act-2020-beyond-look-like/ .

[2] “Improving the Business Environment for a More Dynamic Economy of China and the World – A High Level International Conference on Doing Business Practice and Reforms”, Address by Kim Lovegrove.

[3]Paper Dealing with Construction Permits in Beijing and Shanghai World Bank Group