Developer remediation contract: dispute resolution guidance

This guidance is to support Participant Developers and third parties when using mediation to help resolve any disputes that may arise under the Welsh Government developer remediation contract, before signing a works contract. Parties involved in other dispute resolution contexts are welcome to draw on the principles of this guidance to the extent that they do not undermine the dispute-resolution clause in a relevant works contract.

For the purposes of this document, a third party refers to any entity or individual that is responsible for a building requiring remediation and involved in the remediation process, but is not one of the primary parties (i.e., the developer or Welsh Government) to the developer remediation contract.

Welsh Government has signed a developer remediation contract (“The Contract”) with developers, under which developers are obligated to identify and remediate (or pay to remediate) life-critical fire safety defects in certain buildings. The Contract is available at Welsh Building Safety Fund: fire safety remediation guidance. 

There are 11 developers who have signed up to The Contract. They are:

• Barratt Redrow
• Lovell
• Vistry
• Countryside
• Persimmon
• McCarthy Stone
• Taylor Wimpey
• Crest Nicholson
• Bellway
• Watkin Jones
• Lendlease

Clause 13 of The Contract provides for the possibility that a ‘Third Party Dispute’ may arise between the developer and one or more other parties (typically the freeholder and/ or leaseholders) in relation to the way in which the developer is performing against their obligations under The Contract. Clause 13 is set out at Annex A. In brief, the clause:

• (1) obligates the developer to act fairly and as expeditiously as possible to resolve Third Party Disputes
• (2) states that the developer will act cooperatively and proactively to facilitate the resolution of the Third Party Dispute
• (3) states that Welsh Ministers reserve the right to become involved in a Third Party Dispute where appropriate 

The principles of this guidance may also be drawn upon for residential remediation projects under the Orphan Building, Smaller Developer and Social Sector schemes in Wales. 

For residents who are engaged in a dispute with their managing agents on other matters (for example service charges), the Leasehold Advisory Service (LEASE) may be able to help.

Mediation is a flexible and confidential process used to settle a dispute between two or more parties.

It involves appointing a mediator, who is an independent and impartial third person, to help the parties talk through the issues, negotiate, and come to a mutually agreeable solution.

What are the benefits of mediation?

Mediation allows you to stay in control. Unlike in court, where a judge makes the decisions, in mediation you can decide how you want to resolve the dispute and do not have to accept an outcome you are not happy with.

Mediation is usually quicker and less expensive than going to court, so it can be a more efficient way of resolving disagreements that allows everyone to move on from the problem sooner.

Mediation can help preserve your relationships. Settling a dispute through an adversarial court battle can put added pressure on the relationship between parties. Mediation helps you focus on communicating effectively with each other to find solutions that work for all.

What happens during mediation?

The mediator provides a safe and supportive environment to assist with negotiation so both sides can hopefully reach a settlement they agree on.

The mediator will listen to all views, talking to you privately, and sometimes together with the other party, to help guide you through the process.

Mediators are experts in communication and understand the strong emotions that can be generated when parties are in dispute.

When is the best time to mediate?

Mediation can take place at any time and the best time will often depend on your individual case. In general, it is best to try mediation as soon as you can. This will help reduce the amount of time and money spent on the dispute and open a dialogue before parties become too fixed in their position.

You may wish to pursue mediation as an alternative or in combination with a claim to court. If you have already started a court claim and wish to mediate, the court can pause your case to enable you to do so. The judge will not be told what is discussed or offered at mediation and it will not prejudice your court case.

What kinds of disputes are suitable for mediation under The Contract?

Mediation may be suitable for resolving disputes between developers who have signed The Contract (such as Responsible Entities, including resident management companies and freeholders) about issues which are preventing those parties from signing a works contract for remedial works. This typically includes disputes about conditions for giving the developer access to the building (so that the developer can assess and/ or remediate it) and/ or the cost of assessing and/ or remediating the building.

Clause 6.3 (A), (B) and (C) of The Contract obligates developers who have signed it to include in the works contract a dispute-resolution provision. If the parties have signed a works contract and committed to a certain approach to dispute-resolution within that contract, the parties are likely to be obligated to follow the agreed approach set out in the works contract. There is, however, nothing to stop parties from using the principles set out in this guidance for other Participant Developer/ third party disputes under The Contract as long as doing so does not undermine a works contract signed by relevant parties.

If a dispute concerns the scope of works in relation to a Fire Safety Assessment (FSA) and/or Fire Risk Assessment of External Walls (FRAEW) obtained by a developer, Welsh Government will often commission an independent audit of the FSA and/or FRAEW obtained by the developer before any mediation takes place in order to check whether the assessment(s) meet the requirements of The Contract. The independent audit often helps to verify whether the developer’s FSA and/or FRAEW are adequate to form the basis for the works contract. 

If you are considering mediation, we advise parties to contact the Welsh Government before committing to mediation to find out whether an independent audit of any assessment(s) obtained by the developer have been carried out or is underway. You can contact Welsh Government at buildingsafety@gov.wales.

How much does mediation cost?

It will depend on the complexity of the dispute. We advise parties to ask a mediation provider what the cost will be before committing to the mediation.

Who should pay for mediation in disputes involving The Contract? 

Welsh Government considers that it is reasonable for developers to pay 100% of mediation fees to resolve third party disputes relating to The Contract, in order to avoid leaseholders and residents incurring fees that would discourage or prevent the parties from resolving the dispute and agreeing a works contract to remediate life-critical fire safety defects in the building. In exceptional cases, this may be subject to negotiation, particularly in a case involving more than two parties.

While the developer should pay 100% of the mediation fee, Welsh Government suggests that each party should agree to bear its own costs and expenses of preparing for and attending the mediation, including travel and any legal fees (if parties choose to involve lawyers).

The extent to which a party is legally represented during mediation is a matter for that party. 

What is the role of the mediator?

The role of the mediator is to act as an impartial third party and facilitate a meeting between disputing parties to agree how the dispute should be resolved. This may include: 

• facilitating agreement about the format, procedure, duration, date(s), start time, and providing venue arrangements for mediation as necessary
• facilitating the exchange of case summaries and document bundles between the parties
• setting up any pre-mediation meetings agreed by the parties and the mediator if requested
• compiling names and roles of attendees for the circulation of a participants’ form before mediation takes place
• facilitating a conversation between parties which may include assisting with communication and managing emotions, helping parties to make their points calmly and clearly, and to listen to other parties without interrupting or getting angry. The mediator will also support parties if they are finding the process stressful.

What are the obligations of the mediator in the context of The Contract? 

The mediator should:

• undertake basic research/reading to understand The Contract and duties within it, including reading the Welsh Government guidance on the contract for mediators. Parties should share The Contract with the chosen mediator
• have experience of mediating a construction dispute and be comfortable with the context of The Contract
• agree (along with all parties involved in the dispute) to use Welsh Government’s Dispute Resolution Procedure Agreement (Annex B to this document)
• agree to these terms and confirm that they have read the Guidance for Mediators Document at Annex C
• have no conflicts of interest
• agree to remain impartial and neutral

Can the mediator decide on the outcome?

No. The mediator should not seek to adjudicate, arbitrate, advise, or impose a decision or solution in respect of any of the issues, save by agreement with the parties. Mediators are trained to help parties to see a way through the dispute, but they do not impose solutions. It is for you and the other parties to agree how you are going to settle the dispute.

How should I initiate dispute resolution?

Parties should reach out to each other to propose dispute-resolution in relation to specific issues. We advise parties to inform the Welsh Government of their intention to pursue dispute-resolution by emailing us at buildingsafety@gov.wales. We advise parties to do this because in some cases it may be that Welsh Government has or intends to carry out an independent audit of fire safety assessment(s) obtained by the developer, which may make it unnecessary for the parties to pursue dispute-resolution.

If the parties agree to initiate mediation, then the next step will be for the parties to agree who the mediator should be.

What happens if one party refuses to engage in mediation?

The Welsh Government expects parties to work together in good faith to resolve disputes so that life-critical fire safety defects can be mitigated as quickly as possible.

If you believe that one or more parties are refusing to enter mediation without a reasonable explanation, please inform us at buildingsafety@gov.wales.

Failure by a party to engage in mediation may be interpreted by the Welsh Government in a way which has significant contractual consequences for parties and/or future remedial works. Clause 13 of The Contract is relevant here.

Where can I find a mediator?

Parties are free to source and choose their own mediator but should make sure they select a suitably experienced and qualified mediator who agrees to the mediator obligations at paragraph 10 of this guidance.

Parties should use best endeavours to ensure timely decisions are made, including choosing a mediator and agreeing a date for the mediation meeting to be held. Welsh Government expects a mediator to be found and agreed within 20 business days of both parties agreeing to undertake mediation, and an agreement to have been reached within 60 business days.

Are mediators accredited and regulated?

Most mediators are regulated by their professional bodies but there is no formal regulation of mediators as a defined group.

What happens once parties have agreed a mediator?

The mediator will lead parties through the mediation process. The mediator will contact a representative of each party before the mediation to assist parties and the mediator to prepare for mediation.

What do I need to do to prepare for mediation?

Your mediator will discuss with you what you need to do in preparation for mediation. This will usually include (but is not limited to) the following:

• agreeing with the mediator the format, procedure duration, date(s), venue and start time for the mediation. In the context of disputes relating to The Contract and covered by this guidance, this will include signing Welsh Government’s Dispute Resolution Procedure Agreement (at Annex B)
• arranging for payment for mediation services. As this guidance makes clear, it is expected that the developer will pay 100% of the mediator’s fee
• preparing and exchanging a case summary about the dispute to be considered at the mediation and agreeing with parties any other documents needed for the mediation
• attending any pre-mediation meetings on terms and agenda agreed by the parties or proposed by the mediator
• reading each case summary and document bundle submitted in advance of the mediation
• notifying the mediator of names and roles of all those attending the mediation on behalf of your party, so that the mediator can inform all parties before the mediation meeting
• ensuring that a lead negotiator with full authority to settle the dispute attends the mediation in person or is accessible to agree a resolution. It is important that the key people attending for each of the parties remain present or, at worst, available by telephone or video conference for so long as the mediation continues. Any time constraints should be reported to the mediator as soon as known because any unexpected departure could be detrimental to the progress of the mediation and be perceived as disrespectful by other parties.

Is there a Dispute Resolution Procedure Agreement?

A Welsh Government Dispute Resolution Procedure Agreement is provided at Annex B. This reflects The Contract and will ensure that disputes arising under Clause 13.1 or 13.2 of The Contract are subject to similar minimum requirements. This aims to facilitate a consistent approach, in line with the requirements for fairness, independence, neutrality, proportionality and effectiveness which characterise The Contract. 

Welsh Government will monitor progress towards resolving third party disputes between developers and third parties and will expect them to act in good faith so that remedial works can proceed as quickly as reasonably possible.

Who needs to sign the Dispute Resolution Procedure Agreement?

The Dispute Resolution Procedure Agreement at Annex B needs to be signed by all parties involved in the mediation. Your mediator will guide parties through this process.

Who should attend mediation?

Each party to the dispute should have at least one representative to attend the mediation on their behalf. Parties may wish to consider having resident representatives present for the mediation. Parties may also wish to inform and involve (as appropriate) other interested stakeholders about the intention to proceed to mediation/ the mediation itself. The mediation agreement should be amended as necessary, to include any further parties as the parties and mediator consider appropriate.

The extent to which the parties are legally represented, and the extent of involvement of legal representatives, will be a matter for the parties to consider individually. Parties should focus on ensuring fairness and equality for all within the mediation. 

It is for the parties to resolve their dispute and reach an agreement. The Welsh Government is unlikely to be involved in mediation meetings but reserves the right to attend if we deem it necessary.

21. How long should mediation take?

After initiating dispute-resolution, the Welsh Government expects parties to complete the process within 60 working days. During this time, parties are expected to agree a mediator, complete the required preparation, conduct the mediation session (typically over the course of one day), and come to an agreement for resolving the dispute.

What happens if parties need more time to reach an agreement?

Mediation has a high success rate. 

In complex cases, parties may find that they have made good progress but are not quite ready to agree a resolution. It can be helpful to take a break to think things through and then resume mediation. This would need to be agreed with both parties. The same mediator should be used to continue the mediation wherever possible. 

In these instances, the parties should write to the Welsh Government at buildingsafety@gov.wales with an update on the reason for this and a reasonable timetable for resolution.

Parties should discuss and agree any additional cost to continue negotiations.

What happens if we do not reach agreement?

If parties do not reach a settlement following mediation, the mediator is asked to draft and share the following with the parties and Welsh Government:

• A non-binding statement of the main facts and circumstances.
• Confirmation that the parties participated in the mediation.
• Details of any next steps or material matters in progressing the remediation as appropriate to the parties and Welsh Government.

This can be completed via the form at the end of the Guidance for Mediators document at Annex C.

If one or more parties appear to be failing to engage with mediation in a proper and/ or timely manner, and/or to be failing to act in good faith to secure a solution then Welsh Government reserves the right to take appropriate steps, including in relation to developer obligations under The Contract and/or the impact of rights under The Contract, particularly in relation to Clause 13. 

What happens if parties reach an agreement?

If a resolution is found, parties will sign a written agreement setting out the agreement reached. 

Parties can choose whether to opt for a Non-Binding Agreement (which is not legally enforceable) or a Settlement Agreement (which is legally enforceable in court).

Any agreement reached through mediation must not contradict what is in The Contract and/or Self-Remediation Terms, nor can any such agreement dilute statutory safety standards.

Any agreement (binding or non-binding) must be shared with the Welsh Government at buildingsafety@gov.wales so Welsh Government officials can monitor the progress of developer-led remediation.

How will I know an agreement will not dilute minimum safety standards as enshrined in statute and/or The Contract?

In the context of The Contract the developer is responsible for making sure that any mediated agreement does not dilute minimum safety standards enshrined in statute and/or The Contract. 

The developer must send a copy of any mediation agreement reached to buildingsafety@gov.wales so that the Welsh Government can be satisfied that the developer has met its obligations. The Welsh Government will flag any issues regarding agreements by exception.

Is the agreement legally enforceable?

If the agreement is in the form of a Non-Binding Agreement, then it is not legally enforceable.

If the agreement is set out in a formal Settlement Agreement, then it is legally enforceable in court.

Parties can decide which form of agreement to use.

The developer must send a copy of the mediation agreement to buildingsafety@gov.wales so that the Welsh Government can be satisfied that the developer has met its obligations. The Welsh Government will flag any issues regarding agreements by exception.

Is the mediation recorded?

No verbatim recording or transcript should be made of the mediation by the parties or the mediator in any form, but participants can make their own private notes which will not be disclosable to anyone else, including in any subsequent litigation or arbitration.

Is mediation confidential?

Mediation is usually confidential between the parties involved. But because of the Welsh Government’s responsibilities to hold developers to account under the terms of The Contract and report to the public on progress of developer-led remediation, Welsh Government requests parties to make sure that:

• any mediation agreement the parties come to (binding or non-binding) are shared with the Welsh Government
• where mediation has not resulted in agreement, that the mediator provides a short report for the Welsh Government as stated in paragraph 5 of this guidance

Parties should send relevant materials and queries to Welsh Government by emailing us at buildingsafety@gov.wales.

Agreements will be subject to the confidentiality clause in the Mediation Agreement and will not be shared with parties outside of those involved in the mediation and/or where safety/ legal process requires that the agreement should be shared. In mediation, all conversations are ‘without prejudice’, which means that anything said at mediation cannot be used in court should the dispute go that far.

By exception, mediation outcomes (even non-binding) can be shared by any party if the law demands it and/or where information needs to be shared with a regulator for reasons of ensuring safety.

If a written mediation Settlement Agreement is the preferred route for parties, that agreement is subsequently disclosable in court for the purposes of enforcing the agreement.

What can I do if I have a complaint about my mediator?

In the first instance, we advise you to contact the mediator to explain why you are unhappy and give them the opportunity to put things right.

If the mediator belongs to a professional body, you may wish to contact the body as it should be able to investigate your complaint. You may also want to check your consumer rights to make sure that you have received a fair service.

Below is the text of clause 13 referenced in this guidance, lifted directly from the Welsh Government developer remediation contract (‘The Contract’). 

13. Dispute Resolution between Participant Developers and Third Parties

• 13.1 In the event of a dispute between a Participant Developer and any Third Party in relation to any element of that Participant Developer’s Works or any other action or omission of that Participant Developer in the performance of its obligations in accordance with these Self-Remediation Terms and/or The Contract (a “Third Party Dispute”), the Participant Developer will use all reasonable endeavours to resolve the Third Party Dispute fairly and as expeditiously as possible. 
   
• 13.2 In the case of a Third Party Dispute between a Participant Developer and a Responsible Entity prior to entry into any given Works Contract in accordance with Clause 6.3, the Participant Developer will, in addition to its obligations under Clause 13.1 and 13.3, act cooperatively and proactively to facilitate the resolution of the Third Party Dispute (including by suggesting that the Third Party Dispute is referred to senior representatives of the Participant Developer and the Responsible Entity such that they attempt to resolve the Third Party Dispute through good faith negotiation within 10 Business Days (or such longer time period as may be appropriate given the nature of the Third Party Dispute) and/or by suggesting such other alternative dispute resolution mechanism as may be appropriate given the nature of the Third Party Dispute). 
   
• 13.3 The Welsh Ministers reserve the right to become involved in a Third-Party Dispute in such manner that it considers appropriate. Each Participant Developer shall use reasonable endeavours to cooperate with the Welsh Minister's reasonable requests / requirements in respect of a Third-Party Dispute.

Purpose

This Dispute Resolution Procedure Agreement is for all parties involved in mediation. It sets out the procedure to be followed and adhered to in mediation related to clause 13.2 of the Self Remediation Terms of the Welsh Government developer remediation contract (‘The Contract’). By signing this Agreement each Party and all those attending the Mediation on its behalf agrees to be bound by its terms.

The Mediation is between:

• [name and address of first Party]
• [names and addresses of subsequent parties] (hereafter the “Parties” and each “Party”)
• [name of mediator] (the “Mediator”)
• Welsh Government (reserves the right to attend if appropriate)

The dispute concerns

• [provide brief details of dispute]

The Mediation will take place:

• [provide time, date and place]

The persons attending on behalf of each Party will be as follows:

• [First Party: provide names]
• [Subsequent parties: provide names]

Terms of the Dispute Resolution Procedure Agreement

1. The Parties agree to attempt in good faith to settle their dispute at the Mediation. The Mediator agrees to conduct the Mediation, and the Parties agree to participate in the Mediation in accordance with this Agreement and consistent with the values of fairness, independence, neutrality, proportionality and effectiveness.

2. Parties agree they have chosen a mediator acceptable to both parties that meets the requirements set out below and by signing this document, the Mediator also confirms that he/she:

a. has no conflicts of interest

b. agree to remain impartial and neutral

c. have experience in mediating contractual and construction disputes and will provide evidence if required

d. agrees to undertake basic research/reading to understand The Contract and duties within it, if not known already (Parties should share The Contract with the chosen mediator)

e. has read the guidance provided by Welsh Government

f. as far as reasonably possible, encourages the parties to reach any agreement at mediation which does not undermine The Contract

g. will provide a short form-style report for Welsh Government called The Post Mediation Form which includes:

i. a brief statement of the main facts and circumstances

ii. confirmation of whether both parties attended and participated

iii. whether agreement was reached

iv. if agreement was not reached, whether more Mediation would be appropriate, and whether any particular next steps or issues were agreed

The Post Mediation Form is annexed to the guidance for Mediators. This will help Welsh Government to monitor the effectiveness of negotiations and determine whether there has been any conduct which would suggest a lack of good faith.

3. Once a Mediator has been agreed and appointed, the Parties agree to adhere to the Mediator’s terms of business. This includes fees and terms of payment. The developer is responsible for the cost of the Mediator’s fees. (This may be subject to negotiation, particularly in a case involving more than two Parties). Under no circumstances should costs of Mediator’s fees be borne by leaseholders. Each Party agrees to bear its own costs and expenses of preparing for and attending the Mediation. For the avoidance of doubt any fees relating to the preparation for or attendance at a Mediation by any Party shall not constitute ‘cost of the Works’ pursuant to clause 6.1 of the Self Remediation Terms.

4. The Mediator will determine procedure ahead of and at the Mediation, in consultation with the Parties. The Mediator facilitates to encourage the Parties to come to an agreement.

5. The extent to which the Parties are legally represented, and the extent of involvement of legal representatives, will be a matter for the Parties to consider individually and each Party agrees to bear its own costs and expenses of appointing such legal representation. Parties should focus on ensuring fairness and equality for all within the Mediation.

6. Parties agree that the Mediator is acting as an independent contractor and cannot give legal advice to any Party. They are not the agent of any of the Parties, nor are they acting for them in any capacity. They cannot be called as a witness in any proceedings related to the dispute which is the subject of the Mediation, and he/she agrees that he/she will not at any time act for any of the Parties individually in connection with any dispute.

7. The inclusion of the Welsh Government as a Party is at the discretion of the Welsh Government. Other Parties will not compel nor seek to exclude the Welsh Government as a Party.

8. The inclusion of a leaseholder as a representative of all leaseholders for the building(s) in question is encouraged to be considered by both parties. If a leaseholder representative does attend Mediation, the Mediator, in consultation with the Parties, should make any appropriate amendments to the Dispute Resolution Agreement to account for this.

9. Each Party will have present at the Mediation someone with full authority to settle the dispute without the need to consult anyone not present. If this presents any difficulty for a Party, the Party will inform the Mediator at the earliest opportunity. If a Party needs to consult with persons who will not be at the Mediation, they will ensure that they are able to communicate with those persons throughout the duration of the Mediation.

10. Any agreement reached through Mediation will not seek to contradict what is in The Contract and/or Self-Remediation Terms, accessible in the public domain. At all times, the Participant Developer remains bound by The Contract and any agreement reached will not replace or reduce the obligations contained in The Contract/ Self-Remediation Terms. To the extent that any agreement replaces or reduces the obligations on the parties contained in The Contract/ Self Remediation Terms, that/ those parts of the agreement which do so are invalid and unenforceable.

11. The Mediation is confidential between the Parties and the Welsh Government (if/where Welsh Government is not a formal Party to the agreement). Each Party and those attending the Mediation will keep confidential all information, correspondence and documents arising out of or in connection with the Mediation provided that it shall not be a breach any of the following:

a. to make any disclosure required by law or essential to ensuring appropriate safety regulation (including third Party recovery claims)

b. to disclose any information for the purpose of notifying brokers and insurers and in relation to any associated processes

c. to make any necessary disclosure to accountants or auditors or legal advisors

d. to make such disclosure as is necessary for the purpose of enforcing any Settlement Agreed as part of the Mediation

12. Where a Party privately discloses to the Mediator any information in confidence before, during or after the Mediation, the Mediator will not disclose that information to any other Party or person without the consent of the Party disclosing it.

13. Except for information which would have been admissible or disclosable in proceedings if the Mediation had not taken place, and subject to the qualifications set out in paragraph 12 above, all information and communications (whether oral, in writing or otherwise) made in, or in connection with, the Mediation will be without prejudice, privileged and not admissible as evidence or disclosable in any current or subsequent litigation or other proceedings.

14. No formal record or transcript of the Mediation will be made. No evidence (other than that contained in the Mediator’s form of agreement provided at the conclusion of the Mediation) concerning the conduct of the Mediation will be adduced in evidence in any continuing or subsequent litigation, arbitration or other proceedings between the Parties in connection with the Dispute.

15. An agreement can be binding or non-binding. A Non-Binding Agreement is not legally enforceable. If the agreement is set out in a formal Settlement Agreement, then it is legally enforceable in court. The Mediation will terminate upon settlement being concluded (with an agreement in place), the Mediator retiring from the Mediation, or one of the Parties withdrawing (except that, where there are more than two parties, they may agree that the Mediation will continue as between them until terminated).

16. If the Mediation has not been concluded within 60 business days from the point dispute resolution has been instigated by one Party, the parties should write to Welsh Government with an update and reasonable timetable for resolution.

17. In order to assist the Parties, in the event that a settlement is not reached, the Mediator will complete the Post Mediation Form for Welsh Government which sets out briefly the context of the Mediation (see paragraph 2g), whether agreement has been reached, or more Mediation would be beneficial, including whether any next steps were agreed (the Post Mediation Form is annexed to the guidance for Mediators), which must be shared with Welsh Government.

18. The referral of the dispute to Mediation does not affect any of the Parties’ rights under Article 6 of the European Convention on Human Rights. If the dispute is not settled by the Mediation, the Parties’ rights to a fair trial remain unaffected.

19. This Dispute Resolution Procedure Agreement is subject to the law of England and Wales. In the event of any dispute relating to the interpretation, meaning, effect or enforcement of any agreement reached during the Mediation, the Parties will attempt to settle that dispute by Mediation, failing which the courts of England and Wales shall have exclusive jurisdiction to settle any claim, dispute or matter of difference which may arise out of, or in connection with, the Mediation.

Signed:

…………………………………………………………[name] on behalf of the [first Party]

………………………………………………[name] on behalf of the [subsequent parties]

…………………………………………………………………………………….. [Mediator]

Dated …………………………………………………………………………………………

Guidance and form for mediators mediating a dispute under the Welsh Government developer remediation contract (‘The Contract’). 

Please ensure that you have the relevant expertise and have read the relevant documents to be able to appropriately support the Parties through the Mediation.

In the instance that an agreement is not reached by the Parties, you are requested to submit a brief form of report (below) to the Welsh Government at the conclusion of the Mediation.

Key clauses for mediators

Mediators are expected to be familiar with The Contract and to have identified and read it in advance, focussing on the Statement of Issues provided by the Parties in advance to identify which clauses are of relevance to the dispute they are resolving.

Please note that the content below is intended as a short summary of key aspects of Schedule 1 to The Contract, intended to help Mediators engage with key clauses in The Contract, and should not substitute for proper engagement with The Contract. It is likely that some disputes will relate to clauses which are not set out below.

1. Clause 4 – Commencement and duration (of The Contract)

All sub clauses within clause 4 are relevant.

2. Clause 5 – Obligation to identify and assess Buildings Requiring Works

• 5.3, 5.4 and 5.14 – The Participant Developer’s duties in relation to the FSA and FRAEW assessments as regards the standard of work to be done. Please note that under The Contract it is the Participant Developer’s Fire Safety Assessment (FSA) and Fire Risk Assessment of the External Walls (FRAEW) (so long as up-to-date and compliant) which sets the standard of work to be done. Under 5.14 the Participant Developer will bear the costs of obtaining compliant FRAEWs.

3. Clause 6 – Obligation to carry out and complete works

• 6.1 – Obligation falls on the Participant Developer to carry out/ procure through suitably qualified consultants the works, taking into account the reasonable interests and concerns of all leaseholders, residents, occupiers and other users of the building requiring works. Costs covered and not covered are dealt with here.
• 6.3 – Where the Participant Developer is doing the work they should enter into a Works Contract with the responsible entity which should include its own provisions for Alternative Dispute Resolution within that contract. Please note that where there is a works contract, but it does not contain an Dispute Resolution clause, the Mediator should firstly explore with the Parties why there isn’t a Dispute Resolution clause in the Works Contract with a view to agreeing an Dispute Resolution clause to be included in the Works Contract. Thereafter during the course of that Mediation, if there is time left that day, and the Parties wish to continue to mediate other issues in dispute, they can proceed to Mediate other aspects of the dispute under the amended Dispute Resolution clause as agreed and inserted into the Works Contract, should they wish to do so.

4. Clause 7 – Exceptions from the obligation to carry out and complete the works

• 7.1 – There is no obligation on the Participant Developer to complete works relating to defects which are the result of alterations by a person other than a Participant Developer after the original completion date.
• 7.3 – There is no obligation on the Participant Developer to carry out the works whilst they are not granted access (so long as they used their best endeavours to obtain consent to the access).
• 7.4 – There is no obligation on the Participant Developer to go beyond the works required to remedy the defects, other than unavoidable betterment work.
• 7.7 – All work must be carried out in accordance with Building Regulations and applicable law relevant to the works.

5. Clause 8 – Obligation to engage with certain third parties

• 8.2 – The Participant Developer will from the commencement of the works until practical completion of the Works, keep the Responsible Entity updated as often as reasonably necessary in respect of the progress of the Works. This includes updates at least once in every 3-month period throughout the duration of the works.
• 8.3 – The Participant Developer will request the Responsible Entity shares with leaseholders, residents, occupiers and other users all relevant information in writing that the Participant Developer provides to the Responsible Entity within 10 business days of receipt.
• 8.4 – If the Responsible Entity does not share with leaseholders, residents, occupiers and other users all information, the Participant Developer will share such information within 10 business days following a written request.

6. Clause 11 – Obligations following practical completion of the Works

• 11.1 – (Compliant) Qualifying Assessment to be provided to Welsh Ministers and the Responsible Entity within 20 business days of the date of receipt of the Qualifying Assessment.
• 11.6 – Terms on which the developer is released from its contract with Welsh Ministers and the Self Remediation Terms.

7. Clause 13 – Dispute resolution between the Participant Developer and Third Parties

• 13.1 - In the event of a dispute between a Participant Developer and any Third Party, the Participant Developer will use all reasonable endeavours to resolve the Third Party Dispute fairly and as expeditiously as possible.
   
• 13.2 - In the case of a dispute, the Participant Developer will act cooperatively and proactively to facilitate the resolution through good faith negotiation within 10 Business Days as a minimum and/or by suggesting such other alternative dispute resolution mechanism as may be appropriate.
   
• 13.3 - The Welsh Ministers reserve the right to become involved in a Third Party Dispute in such manner that it considers appropriate.

8. Clause 16 – Claims between Participant Developer Group Companies and Third Parties

• 16.5– The Participant Developer is not liable for indirect/ consequential losses incurred by any Third Party (See Section 1 for a definition of the Third Party). 

9. Clause 17 – Liability to certain Third Parties

• 17 – This clause sets out the Participant Developer’s liability to each Third Party with a freehold/leasehold interest in the building for the reasonable costs to the extent that such costs are properly incurred by the Third Party as a result of any default by the Participant Developer in the performance of its obligations under The Contract (save for indirect costs).

10. Clause 20 – Breach and Termination

• 20.1 – Welsh Ministers’ right to terminate The Contract in the case of breach.

11. Clause 28 – Confidentiality

• 28.1 – The Participant Developer and Welsh Ministers’ commitment to treat as confidential all confidential information (see the definition of confidential in Annex 1), subject to the constraints set out in 28.1.

Post-Mediation Form 

To be completed by the Mediator and sent to the Welsh Government at buildingsafety@gov.wales in the instance agreement is not reached between parties.

• Name of parties
• Nature of dispute
• Did both parties attend and participate? Y/N
• Was agreement reached? Y/N
• If agreement was not reached, do the parties intend to continue mediating? Y/N
• In your opinion, would further mediation be beneficial?
• Were any particular issues or next steps agreed?
• What other observations do you have?