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MODULE MMK221900: CONSTRUCTION CONTRACTS & DISPUTES
First Diet: Session 2016-17
Hope Development (hereinafter referred to as Hope) based in Edinburgh is about to commission the building of high-quality residential blocks of flats in the south-east of England. The developer, after many years of successful operations throughout the UK, regards procurement as key to their successful business development. They would like your professional advice on possible dispute management strategy/strategies they could adopt to successfully deliver their proposed blocks of flats.
Hope has just been granted planning permission to develop fifteen blocks of flats in various parts of the south-east of England. They have set a budget of £600,000 to spend on any of the main contracts. They plan to begin site operations by the end of March 2017 for completion by the beginning of January 2020. They have prioritised time as their key performance indicator due to the demands of potential buyers who have paid in deposits for the flats. As a result, Hope intends to impose liquidated damages at a minimum of £60,000 per week on any of the main contracts. They are of the belief that this level of damages will incentivise the contractors to prevent any delay in the works.
Hope is further concern about managing any potential dispute that may risk the timely delivery of the projects. They would prefer a single method be stipulated in the main contract(s) to manage any potential dispute and make any decision derived from this method finally binding to them and the respective contractors. They would also wish to time bar claims from the contractors.
In addition, Hope sees this area in the south-east of England to be of a prime location to develop their business. As a result, they plan to occupy four of the top flats in one of the blocks of flats as their regional offices.
Prepare and submit a report that recommends one or two dispute management strategy/strategies so that Hope could address its requirements. Your report should critically analyse the suitability of your recommended dispute resolution and/or avoidance strategy/strategies. Your report could also consider the Applicable Law to be stipulated in the contract(s). For instance, you may recommend Scottish or English law, as the Applicable Law, depending on the one which you consider to be more effective in managing any potential disputes(s).