In the construction industry, disputes are regularly referred to the Board of Arbitration for Construction Disputes (COA). Usually because it is required pursuant to the applicable general conditions (AVA, UAV, UAV-C), although sometimes parties choose this option based on the Board’s expertise. A new reason was recently added to submit construction disputes to the Board – even if involving COA is not contractually required. As of October 2022, two new Fast Track procedures have been added to the range of procedures already available at COA. Construction law attorney Rosa Ruimschotel explains this new procedure.
With the new Fast Track procedures, the COA is responding to the growing need for swift, efficient (and therefore less expensive) resolution of disputes. In Fast Track proceedings, no judgment is rendered. Instead, a binding or guiding opinion is issued. There are two options. The Fast Track Light procedure is designed for handling relatively simple disputes with a financial interest of up to €100,000. For major disputes, the Fast Track Plus procedure is available.
There are several advantages to Fast Track procedures. In the first place, the short completion time of the procedure. The lead time of the Fast Track Light procedure is about 6 weeks; for the Fast Track Plus, it is 9-11 weeks. This is a major advantage: especially in ongoing construction projects (whether a home remodel or an office complex), it is often crucial that problems be resolved as quickly as possible before relatively minor disputes escalate into major ones. Moreover, this allows for avoiding delays in other areas (the critical path), causing increasing costs and losses.
Another advantage is cost. The Fast Track Light procedure is subject to a fixed fee of €6,000 (excluding VAT), which is shared equally by the parties. The costs of Fast Track Plus proceedings are settled based on the actual costs incurred according to the COA’s moderation matrix (equivalent to regular arbitration proceedings). These costs can be expected to be substantially lower than regular arbitration proceedings due to the concise scope of this type of dispute resolution.
The opinion is given by a binding advisor. This advisor is selected from the Board of Arbitrators. The opinion is binding to the parties. In Fast Track Plus proceedings, it is also possible for parties to request a legal rights opinion on a particular dispute. This opinion is not binding. Unlike regular arbitration proceedings, the (binding) opinions are not publicly disclosed.
Starting a Fast Track procedure is easy. A form can be downloaded from the RvA website. On this form, the parties briefly indicate the issues in dispute and the nature of the technical and/or legal expertise needed to assess the dispute. Only disputes that are suited for quick and relatively simple adjudication are eligible for Fast Track proceedings.
The Fast Track Light procedure requires one stage in writing. Both parties simultaneously submit their written explanation of the dispute (maximum 10 pages, productions/attachments are not accepted). This is followed by a (brief) oral hearing, including a possible viewing of the work if the advisor deems it necessary. A single written opinion is then issued, in principle within two weeks.
The stages of the Fast Track Plus procedure are similar to the Fast Track Light procedure, but gives more room for explanation and details of the dispute. For example, the maximum size of the parties’ written explanations is set at 20 pages, productions may be attached, and the parties may respond briefly (max 5 pages) to each other’s explanations. Also, instead of one advisor, two or even three binding advisors may be appointed if the dispute so requires. Within three weeks, the opinion is issued.
In our practice, we see a growing need for quick intermediate resolution of disputes in construction cases. The Board of Arbitration, especially for contractors and corporate clients, is an ideal advisory body in this respect, given its combination of construction and legal expertise. If you have more questions about the options of these binding opinion procedures.