The latest version of the CCDC 40, Rules for Mediation and Arbitration of Construction Industry Disputes, was recently released and brought several changes to the previous version released in 2005.
The CCDC 40 is intended to be a stand-alone document, which can be incorporated by reference into any contract. If incorporated into a contract, the terms of the CCDC 40 are triggered by the main contract. Once triggered, all rules for mediation or arbitration are contained in the CCDC 40.
The CCDC 40 now has express rules for the joinder of additional parties to a mediation or arbitration, on consent of all parties already involved and the additional party. For example, an owner and contractor may want to add the consultant to the dispute resolution process, given that the consultant has an interest in the outcome of the dispute resolution process. Other than expressly mentioning joinder, it is not immediately clear how this amounts to much of a change, since any party could have presumably been joined under the 2005 version as well, as long as all parties involved agreed.
The drafters have included helpful flowcharts which outline the revised mediation and arbitration processes and timelines. For arbitrations, some timelines were lengthened while others were shortened. A first procedural meeting is to be held 10 working days after the arbitrator is appointed, as opposed to the previous 5 days outlined in the 2005 version. For the exchange of statements, the claimant provides its statement within 15 working days of the first procedural meeting, the respondent can respond within 15 working days, and the claimant can respond to any counterclaim within 15 working days. The 2005 version allowed for 14 working days for each of these steps. For hearings and meetings, an arbitrator must give 5 working days notice. The 2005 version required 7 days notice. In the new version, an arbitrator must make a final award not later than 20 working days after final submissions, while the 2005 version provided for a period of 30 days.
An arbitration under the new CCDC 40 Rules will have three arbitrators if stipulated by the agreement to arbitrate. For reference, the 2005 version states that an arbitration will have three arbitrators if the amount in dispute is more than $250,000, or a party gives a written request for three arbitrators within 15 days following the start of the arbitration.
For mediations, if there is an agreement on the mediator, then the mediator must be appointed within 10 working days. If the parties are unable to agree on a mediator, either party can apply to the Superior Court of the applicable jurisdiction to appoint a mediator. All other mediation steps, including setting a date, time and place for mediation, exchanging mediation briefs, and the mediation itself is to happen “as soon as possible.” The 2005 version did not specify when a mediator must be appointed.
If you intend to use the new CCDC 40 as a stand-alone document or in conjunction with another contract, it is advisable to carefully review the recent changes.