Improving Security of Payment Building and Construction Industry

5. Proof of Payment Page 62National Public Works Council IncImproving Security of Payment in the Building and Construction Industrymost desirable dispute resolving mechanism as it will entail little expense and willresolve the dispute generally in a very short time period. Parties involved in theBuilding and Construction Industry should be encouraged to resort to directnegotiation before any other form of alternative dispute resolution is entertained.5.5.2 MediationThis is an informal mechanism used to resolve disputes in which an independentmediator brings an impartial perspective to the dispute and encourages the parties tonegotiate to resolve their dispute. A mediator does not have authority to make adecision for the parties. However, a mediator would encourage discussion betweenthe parties, perhaps highlighting those important issues which need discussing.The former Chief Justice of the Supreme Court of New South Wales, Sir LaurenceStreet, identified three elements in mediation as follows:5.5.3 Conciliation"The first is that the parties call in the aid of an impartial third-party tostructure a process for them within which they can negotiate aresolution of their dispute in the course of which they will meet andtalk together with the mediator and the mediator will talk privatelywith each party in the course of the discussions.The second... is that the third-party has no power at all under the....mediation agreement to impose any decision or to hand down adetermination. The third-party is there simply to facilitate the flow ofcommunication and to develop mutual understanding and help theparties towards a consensus.The third... is that the process is consensual throughout. It isconsensual from the beginning... consensual in that it continues as longas the parties want to go on negotiating... consensual in its culminationin that a successful mediation results in a contract... which is just asenforceable as any other contract".Conciliation is a process similar to mediation in which a conciliator, who may notnecessarily be a neutral person, will cause the parties to discuss their dispute andmake submissions to each other on their points of view, with the objective that theparties resolve their dispute by agreement. A conciliator may indicate to the partiesthe strengths and weaknesses of each other's case and may propose various optionsfor settlement. As is the case with a mediator, a conciliator does not have the powerto make decisions on behalf of the parties.5.5.4 ArbitrationAn arbitrator is an independent third-party empowered with the ability to makedecisions for the parties and resolve the dispute for the parties by ultimately making