Interview with Fritha Wheeler-Ozanne, Senior Counsel, Fluor Corporation

Our respondents are increasingly looking to resolve conflict points separately during the course of a project rather than leaving them to the end. Does that ring true with you?

That’s definitely what we try to do. I’ve worked in the UK and Australia, so obviously you’ve got the adjudication regimes there, which are ongoing ways of resolving disputes. But I think even with our international projects, where there’s no such regime, I think the contracts are getting more sophisticated around DRPs (dispute resolution provisions) or other interim dispute mechanisms. I think there’s definitely a willingness and awareness to not wait to the end, especially on big disputes. There’s definitely a keenness to get that dialogue going.

Is there still that natural tension between the business people who want to preserve commercial relationships and then the legal team that wants to address these conflict points early?

It depends. Every project is different and every client is different. So there’s lots of varying factors, but I feel like the industry is trending towards being more willing to tackle interim points. I’ve always counselled clients from outside and now internally, that if you have a good relationship that should make these discussions easier. I think sometimes it’s a case of not rocking the boat, that we’ve got a good relationship, we’re getting things done and everyone’s happy. So why would we risk having a difficult conversation? But if you leave it to the end, people then move on to different projects and it can be a lot less effective.

Has there been a cultural shift where the business people are recognising that dealing with conflict points and disputes as they arise actually preserves and secures the relationship?

I’ve definitely seen that there is a willingness to engage in those difficult conversations, and even do it with a framework for a dispute, rather than waiting to the very end of a project.

Given the current pressure on margins and with everything that’s going on economically, our study shows that there is still a greater willingness to spend money on legal advice during the course of the project to deal with any potential conflict points. Is that something that you recognise?

From a contractor’s perspective, I think we always try and actively help before disputes are left to the end of a project, even if it is in the background. I think sometimes it can be seen as an aggressive stance to have lawyers involved, but we can definitely help behind the scenes. In terms of external legal advice, there are some cases where I know that we’ve engaged lawyers before we’re in formal dispute mode and we are getting some interim advice on particular elements. I think it’s about understanding the strategy, understanding the project and understanding the client.

When would you typically reach out to external advisers to help deal with conflict points at an early stage?

If there’s a point of local law, that is important. A lot of our projects are international, so we might need international advice as to how a principle operates in a certain jurisdiction. Also, if it’s not a jurisdiction or a dispute resolution mechanism that we’re used to, that might be a point too. Sometimes the business would say “this is our view, we want to make sure that we’re on solid ground from a negotiation perspective”, or we may just want to sense check things that are quite nuanced.

Arbitration appears to be growing in popularity as the preferred form of dispute resolution, while enthusiasm for mediation has dropped. How do you see these preferences evolving?

I would say that enthusiasm for mediation has dropped a little bit from maybe where it was 10 years ago, when I think people were more excited about it. But often in mediation, you get to a point where you think this is never going to settle. And more than often than not it does. If you’ve got more than two parties, I think mediation really helps. Getting everyone in the same room and cutting through some of the technical issues or finding a way to navigate through different expert opinions, it’s been really effective with a mediator.

Is arbitration still the preferred mode of dispute resolution?

If you’re in formal dispute resolution, then arbitration would still be the preference. I think you have more control over the timetable and I think there’s a certain amount of comfort from that. I think the frustration I have with arbitration is that there’s a tendency to wait and make everyone do a final hearing two years down the road, when actually a court might make a motion for summary judgement. I know that people are having some success with those sort of interim hearings in arbitration, but I think it’s still not as common as it should be.