Originally posted 2010-12-27 09:00:05.
Here at Construction Law Musings, we have discussed mediation from numerous angles. From a great Guest Post from Vickie Pynchon (@vpynchon) on Ways Your Construction Mediation will Fail to my own personal musings on the subject.
All of the thoughts from these posts flooded to mind during one long mediation experience recently. The parties had already tried a court-sponsored mediation that lasted maybe an hour and, a few months later, were ready to charge into the void of trial (a result that would have lead to an interesting case with some cool construction issues, I might add), but the lawyers decided to take one more shot with a private mediator. As is true in almost all commercial and construction disputes, the parties each had strong feelings and reasonable arguments from a legal perspective. In my latest case (as in most cases where a good mediator is used) a deal got struck.
Also, and as always happens, I learned something during the process and left it even more committed to the possibility of voluntary (as opposed to contract or court mandated) mediation at the proper point in time between parties who are poised and ready to go to battle in the courtroom. I say this as a litigator by trade and training that truly enjoys the courtroom battle. However, I need to remind myself that “Counselor at Law” often follows “Attorney” after my name and I take that second designation seriously.
I saw the reasons that mediation works to resolve even the thorniest of construction disputes, from the ability of businessmen to make business decisions to the possibility of a creative solution unavailable in a pure litigation context. I also saw how a mediation might not work, from the desire to just shut it down to a mediator that did not take the time and twist the arms. Mere shuttle diplomacy never seems to do anything to move the parties toward resolution any more than a settlement conference without a mediator would have.
I also saw that mediation can move the ball forward even after a day of hard-fought negotiation results in everyone going home. Even when parties are at the end of their ropes and all hope seems lost, sometimes a break can lead to a breakthrough. When all seems lost and a break is the difference between “no” and “maybe,” “maybe” is always better. This last needs to be remembered late in the day when the parties are in from out of town or seemingly at their final offers and ready to dig in their heels. This is true even though most mediators with whom I have worked seem to cling to the thought that once the parties leave the office or conference room the deal is lost. Sometimes (though far from always), the fresh perspective of a good night’s sleep can relieve tension and lead to a bit more rope.
The takeaway? In even the most difficult and contentious of construction disputes, once business people get into a room with the mindset to fight for a compromise, a deal generally results. In most cases the parties’ bottom lines minutes before the mediation starts turn out to be a lot more fluid than even they thought by the end of the day. The ability to vent as well as be a part of a process (mediation) as opposed to a passenger on a careening train (litigation) almost always results in a more satisfactory resolution. The parties can leave the mediation exhausted, psychically bruised, but firm in the knowledge that they worked hard to solve a problem and that they came to an imperfect but palatable resolution instead of a decision by a third-party sitting in judgment.
In short, mediation works and, in my opinion, should always be a tool in a litigator’s tool belt.
As always, I welcome your comments below. Please subscribe to keep up with this and other Construction Law Musings.
Chris,
Court-ordered mediation of construction disputes rarely works. Unless the parties participate in the mediation voluntarily, the essence of the process is lost. Mediation is based on the assumption that parties, who are so inclined, will find a way to resolve their dispute. Parties ordered to mediation usually do not have the commitment to weather a stormy day of negotiations.
Parties should not begin mediation until they have conducted sufficient discovery to analyze the risk of going to trial. As discovery is so very expensive, ideally, parties will stipulate early on to an efficient discovery process that will enable them to conduct meaningful negotiations as early as possible. It would be even better if the parties put ADR provisions in their contracts that provide for the meaningful exchange of information and mediation procedures that must be completed as a condition precedent to litigation. I recognize this could be construed as a mandatory process, but it is a process of the parties own design and reflects the parties’ intention to resolve conflict in the most efficient way possible, and that is what mediation is all about.
Great comment Ron, thanks. I am less skeptical of contractually negotiated procedures. However, I find that many times an owner or GC will use a ” take it or leave it” approach that sometimes creates a less negotiated agreement. It is in these instances where I don’t see mandatory mediation, particularly where the mediation has to “get out of the way” to get to what the allegedly wronged party feels is necessary, i. e. litigation.
.-= Christopher G. Hill´s last blog post ..Contractor Side Deals Can Waive Rights =-.
Chris,
I am finally having a week that allows for a bit of ‘exhaling’ and get caught up on some of my favorite blogs, yours always being at the top of that list.
We just took on a client who offers construction mediation and I forwarded your link to them. Yet another great posting and I am glad I get to ‘brag’ on something you wrote!
Keep up the great work…
Bobby
Thanks Bobby. I’m glad you’ve stayed busy and enjoy your comments so am happy for your readership.
Having just settled a case yesterday at a client sit down (no mediator, but very much like a mediation), I am really sticking to my original point. I spent four months virtually begging to get the parties together.
Tens of thousands of dollars later, multiple hired experts and reports, more complexity of resolution due to clients being on notice of property defects, the parties sit down ad resolve their case. A pre-litigation mediation clause would have short-circuited a ton of wasted time, energy, effort and money, produced a very similar result, and the other side would probably have been able to sell a little better deal for themselves to boot.
I agree with Ron that like fine wine, the aging of information and analytical exchange needs to ferment appropriately for these methods to work; however, good lawyers who have their clients’ trust can extrapolate on partial information and save a lot of time and effort in most (but not all) circumstances.
.-= Timothy R. Hughes´s last blog post ..Contract Terms Govern in Virginia … Except Non-Competes =-.
Glad to hear you got it settled Tim! Good lawyers always help. Unfortunately in many cases the cases we have are the first that our clients may have that go to such resolution procedures.
The only way that a pre-litigation mediation clause can work, in my mind, is if all of the parties buy into the necessity of such a clause up front. If not, they’ll just go through the motions because they won’t know enough to move forward. While I always advise “working it out” before suing, this does not and cannot happen in all cases.
.-= Christopher G. Hill´s last blog post ..Contractor Side Deals Can Waive Rights =-.
If the parties come to the table with an open mind, mediation really can be an asset to the dispute. I just went through a marathon mediation myself. Exhausting, but worth it.
.-= Scott Wolfe´s last blog post ..CPSC Stiff Recommendations Positive Development for Homeowner Claims =-.
Thanks for the comments Scott
I think the financial crisis has fueled a mini boom for mediation services across the world as more and more people dispute over money.