Ontario Construction news staff writer
Contractors should develop solid systems for managing documentation and appreciate there isn’t a one-size-fits-all solution to dispute resolution challenges, say two lawyers familiar with Ontario’s construction industry
Lawyers Jesse Gardner and Catherine Gleason-Mercier, partners at Singleton Urquhart Reynolds Vogel LLP, outlined their observations at an online Ontario General Contractors Association (OGCA) webinar last Wednesday (April 12) moderated by OGCA president Giovanni Cautillo.
“I think sometimes parties feel like it’s an all-or-nothing (dispute) – we’ve got to go to court or a massive arbitration. That’s not actually the case,” said Gleason-Mercier. “Taking a step back early on, looking at the nature of the dispute and what makes sense in terms of the resolution; (this) will help guide you into the best process.”
Options include negotiations, mediation and adjudication as well as arbitration and litigation, Gardner said, noting as well there are variations on each of them “so negotiations can be staged.” In some cases, for example, an informal process without lawyers present is best, but in others, you’ll want legal counsel to be there, he said.
The Ontario Construction Act’s adjudication process through Ontario Dispute Adjudication for Construction Contracts (ODACC) is proving to be especially useful for payment issues, as intended by the legislation. “These are the prime disputes to go to an adjudicator to sort out within an expedited timeline – who is owed, (and) what, and trying to get the money flowing,” Gardner said.
However, both lawyers say there still are challenges in resolving other disputes, especially where parties accuse each other of bad faith. Emotions can run high and sometimes contractors and owners are drawn into the high-risk approaches of taking things to court or formal arbitration.
This is unfortunate, says Gardner, because surprises can happen and litigants can find themselves, after spending large amounts of money, time and energy, with bad results.
A much better approach is to remember the construction community is relatively small and it is wiser to think things through.“There are these long standing relationships, and its the same players over and over.”
“It’s very rare for a dispute to arise where there is no ability to negotiate” and it is almost always helpful understand the underlying issues and the other side’s perspective, he said.
Gardner suggested three approaches to improve results and save time and money.
“The first is to be organized” – namely, ensure you have all your documents (including emails and text messages – both internal and external) organized so they can be retrieved when required.
The second principle is to “be clear and consistent on the record” – meaning that your documentation should match as time goes on. Be wary of changes within your communication and records, because even slight variations could provide evidence that could be used against your interests.”
Finally, Gardiner said it is important to “be careful what’s on and off the record.” Sometimes you might want to be informal and say: “We’re off the record now. But you ned to be really mindful of whether this is a discussion where we are genuinely trying to negotiate.
“And if so, that’s without prejudice and you can’t use it against us down the road.
“Be very careful about what is on the record and off the record, and labelling your communications.”
The need for “good document hygiene” should funnel down to everyone in the organization, says Gleason-Mercier. “We have seen cases turn in a very big way on someone (at a) relatively lower level in the ranks form a contractor or even on the owner side, who says something in a text message, or you know, sends an email . , , that is so damaging.”