Subject to sub-paragraph (3), in the case of any dispute arising out of or in connection with the contract, the contractor and the Health Board must make every reasonable effort to communicate and co-operate with each other with a view to resolving the dispute, before referring the dispute for determination in accordance with the NHS dispute resolution procedure (or, where applicable, before commencing court proceedings).

Either the contractor or the Health Board may, if it wishes to do so, invite the area medical committee (if any) to participate in discussions which take place pursuant to sub-paragraph (1).

In the case of a dispute which falls to be dealt with under the NHS dispute resolution procedure, as modified by paragraph 36(3), sub-paragraph (1) does not apply where it is not practicable for the parties to attempt local resolution before the expiry of the period specified in paragraph 91(4) as so modified.