RICS Conflict Avoidance Process (CAP)

What is the RICS Conflict Avoidance Process (CAP) and how is it linked to the RICS Conflict Avoidance Pledge?

CAP is a contractual mechanism, which helps parties to avoid getting embroiled in pro-longed and damaging disputes. Where disagreements begin to develop, CAP enables parties to address and resolve matters early, collaboratively and inexpensively.

The construction industry spends around 1.6% of its total expenditure in the UK on legal services, which compares unfavourably to the UK economy’s median spend of 0.8%. The RICS Avoidance Pledge and corresponding Conflict Avoidance Process are part of an industry wide commitment to change this.

Find out more about the Pledge, why FIS is a signatory and how you can sign up too here.

When is the RICS Conflict Avoidance Process relevant?

CAP is used where parties commit to co-operating on dealing with emerging issues openly and honestly. Parties to a contract agree to alert each other to a problem as it begins to materialise, and to use CAP as a method to avoid the problem form getting worse and ending up being channelled towards formal confrontational procedures such as adjudication, arbitration or litigation.

In recognition that people will sometimes find it difficult to agree on matters, and that disputes cannot always be avoided, the CAP procedure is structured to help parties to resolve issues early and in accordance with agreed principles and rules for cooperation.

CAP is designed to deal with issues quickly and effectively and thus reduces the financial and reputational costs often associated with traditional forms of dispute resolution.

How does Conflict Avoidance Process work?

The process involves the nomination of an impartial CAP professional who is highly experienced and knowledgeable in the subject matter, which is at the heart of the disagreement between the parties. The role of the CAP professional is to inquire in the disputed issues and provide a report with recommendations on how they can be resolved.

For example, an issue about interpretation of a contractual clause can be referred to a CAP Professional who is a lawyer with immense experience in building contract interpretation. If the problem that needs resolving is about the costs of variations, it can be referred to a highly experienced and impartial chartered quantity surveyor.

The CAP professional would meet the parties face-to-face at an early stage and work with them to set an agreed timetable and agenda. The meeting will help the CAP Professional obtain a clear understanding of the question(s) that need the CAP looks to answer.

The CAP Professional would undertake an investigative role. They would, if appropriate, visit the relevant project site and talk to people who do the work and/or oversee delivery of the project. The CAP Professional would endeavour to get a clear understanding of the problem and apply their experience to provide a report with fully reasoned recommendations on how matter ought to be resolved.

Each party to a reference to CAP will normally bear its own costs and expenses, and will bear in equal share the remuneration and expenses of the CAP Professional

For more detailed information about the CAP procedural framework and timetable, see the document CAP Summary of Procedure – January 2021.

How can I embrace Conflict Avoidance Process in my processes?

RISC have developed a sample clause, prepared by RICS, which can be adopted (or adapted) by parties who wish to include in their contracts a Conflict Avoidance Process to help manage and resolve emerging disputes. Parties may also utilise this clause to help them manage and dispose of legacy disputes.

Sample CAP Clause – January 2021

As part of FIS commitment to signing the common assessment pledge, FIS is working with other industry bodies to request that similar clauses are included in standard industry contracts.

You can sign join FIS in signing the Conflict Avoidance Pledge here.

What are the Key benefits of the Conflict Avoidance Process?

CAP supports a collaborative working culture by promoting open and honest communications between parties to a contract, especially when problems arise.
CAP enables parties to identify possible disputes early so as to mitigate risks and protect their commercial relationships and business reputations
CAP encourages compromise, where possible, and helps to avoid matters escalating into formal dispute resolution procedures such as adjudication, arbitration or litigation
CAP provides all parties with objective information and guidance from an impartial professional, who is highly credible and experienced in the subject matter on which the parties have a disagreement.
Differences can be settled quickly by people who are engaged in the delivery of the contract, without the need for substantive input from lawyers.
CAP recommendations are not binding on parties, unless the parties have previously agreed they should be. Recommendations are fully reasoned out and give parties a clear indication as to what the outcome might be if the disagreement ends up being adjudicated, arbitrated or litigated.
The parties can agree that, where CAP recommendations are not accepted by one party, then that party would be required to provide full reasons for not doing so. This can help focus parties’ on using the CAP recommendations as the basis for an agreed settlement.

Fees and costs

Parties do not pay for the setting up and maintenance of the RICS list of CAP Professionals
Parties do not pay for nominations made by RICS from the list of CAP Professionals. (DRS will recoup its administrative costs as a percentage of a nominated CAP Professional’s fee)
Each party pays their own costs incurred in taking a matter through CAP.
Each party pays half of the CAP Professional’s fees and expenses, unless they agree otherwise.
The fees charged by a CAP Professional on a particular contract are normally charged at an hourly rate, which is agreed beforehand between RICS and the contracting parties.

Further Information

News story 12th March 2021 – FIS Signs the RICS Conflict Avoidance Pledge