Mediation Of Construction Disputes

Michael Lodge, NCPM, CRTP
Certified Mediator - Hearing Officer
Email:  info@lodge-co.com
Website:  www.lodge-co.com
Providing mediation and business advisory services nationwide.

Mediation should be used in construction disputes more.  There are issues that arise on almost every construction site that leads to a dispute.  It can be a change order that was not approved, billing for materials not part of your construction, over charges, construction quality issues, construction schedules and various charges for being late, warranties on the work and the list goes on.  Mediation provide both parties mediate and resolve disputes prior to going into a costly legal battle.

Here are some ways to prepare for mediation.

1. The role of the mediator
Mediation is geared to resolving the dispute. One feature is the chance to hold confidential discussions with the mediator. The opportunity to discuss issues with the mediator in private can often be a more appealing way of getting a point of view across rather than being constrained by what has been prepared.

Once the mediator has a grasp of what is driving the dispute then he or she can get to work. Mediators are independent and neutral. They will use their knowledge and experience of the law and construction to rigorously test what each party is saying and help parties decide on what terms a case might be settled.

Preparation is therefore geared to helping the mediator to help the parties with identifying the point at which one or more of the parties have a reason to settle: the point at which the benefits of reaching a settlement outweigh the alternatives.

2. Representation
Mediation is not adversarial in nature, unlike adjudication or court proceedings. Parties to a dispute can mediate their differences without legal representation. That said, legal representatives can and do serve a useful role in assisting the mediator, identifying the issues and advising their clients on settlement as well as the consequences of the alternatives.  If you have a grasp of the facts and feel you can mediate on your own, mediation allows you that opportunity.

3. Know the case
Knowing the facts is key to your opening statement to the mediator at the time of the mediation session. If you have all of the facts ready ahead of time it will provide the other side a clearer understanding of your dispute.  Prepare a “punch list” of items that need to be discussed, the costs associated with them.  If you have contracts provide that to the mediator so he has a better understanding on the relationship with the you and the other parties.

Clarification of issues and disclosure of documents before mediation meetings is an important part of the process. Mediation meetings can then be used to test issues once the parties have shared relevant information and settlement options explored.
 
4. Be prepared to negotiate
A dispute is seldom settled by trying to persuade the mediator that your case – and your bottom line – is the right outcome, but because one or more of the parties does not have a better alternative. This inevitably means you need to identify the point at which you will walk away from the mediation without a settlement. If that is less than the other party’s bottom line – what they are prepared to settle for – then the dispute will obviously be settled.

5. Be prepared to make hard decisions
An experienced mediator will test you as well as your case. Be prepared to listen to criticism. Consider that the mediator may try to help you rationalize your own case as well as giving a clue about the other side’s bottom line without breaching confidentiality. Parties often push back against hard questions from the mediator. Rather than push back, take the opportunity to reassess your own prospects of success.

6. Aim for settlement
As noted above, settlement rates are high. This reflects the fact that management of risk in dispute resolution is hard to achieve in more adversarial processes. The benefits of mediation are many and being familiar with how to prepare for mediation might just persuade you to consider mediation not as an alternative but as the norm.