Well, I’m back. After a busy week of meeting with clients, college visits with my daughter and a successful mediation (this time as co-counsel), I am back to what I hope to be a more consistent posting schedule.
Luckily for me, my friend Seth Smiley stepped in with a great Guest Post Friday post on the need for a mediation clause in your construction contract. In his post, Seth made some wonderful points on the value of such a clause and the value of construction mediation in general. In this post, I want to follow up and elaborate on some of those points and add a few of my own.
At the risk of sounding like a broken record, mediation works in construction dispute resolution. In my experience a commercial construction dispute is the perfect candidate for mediation for a couple of reasons. 1. a commercial construction dispute is a business dispute and 2. a construction contract dispute is essentially a zero sum game where every dollar spent paying your construction attorney and every minute spent on the past hurts the bottom line. Add these two factors together, and I find very few instances where I won’t recommend mediation to a client.
Even in the rare instance where no settlement occurs, the mediation process can be helpful. It allows for some discovery of the motivation and arguments that the other side may present should the matter make it to arbitration or trial. While the process is confidential and nothing said during the mediation can be used as evidence later, getting this sort of intelligence can certainly help you prepare for trial. Additionally, in the case where the mediator has experience in construction matters, the comments and insights of this third party can be helpful in evaluation of both your case and that of the other side.
In short, mediation has a lot of upside and very little downside that I can see, particularly in a construction dispute.
One point on which I disagree with Seth is the need for a mandatory mediation clause in the contract. In my experience, having seen the process from both the mediator chair and the counsel chair, “mandatory” and “mediation” don’t often mix. In more cases than not, parties that look at a contract and see that they have to “check the box” of mediation before they can get to court or arbitration simply do just that: check the box. This generally leads to a relatively short and superficial mediation experience.
While I am fully committed to the mediation process, it is a process. Without the right attitude and the desire to work toward a settlement, the process won’t work as it should. If the parties are simply checking off another requirement so that they can get to court where they want to be, the willingness to work is not there and the process isn’t as effective. If parties look at mediation as a hoop to jump through, they tend to go through the motions without a true commitment (whether this lack of commitment is conscious or subconscious). Mediation works best when the parties decide to enter the process (with more or less encouragement from their counsel).
To wrap this up, mediation is a process that is great and that works wonderfully for construction disputes. . . . so long as it’s voluntary.
Thoughts? Disagreements? Let me know with a comment.
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