Unfortunately, at some point in your career, you may face an issue with a client, vendor, or trade partner that won't be resolved by rational discussion, and before you know it you'll be looking for your lawyer's phone number. To save yourself a lot of time and money, it's best if your contracts have a clause for mediation — a process in which a trained, neutral person helps people communicate with each other and, if possible, reach agreements that satisfy their needs.
WHY MEDIATION? All forms of dispute resolution fall under the umbrella of “alternative dispute resolution.” The operative word is “alternative.” Most people want to avoid resorting to violence or a lawsuit to settle a dispute. Several options are available; mediation is the most basic and widely used.
The most common style of mediation is “facilitative,” for which the mediator need not be knowledgeable about the disputed topic. Parties involved in a construction dispute often select “fact-based construction mediation” and choose a mediator experienced in construction (www.constructiondisputes-cdrs.com).
Mediation has several advantages over litigation:
- Affordability. Mediation is a fraction of the cost of litigation; attorney and expert witness fees, court costs, and your time off work add up.
- Time. Mediations can be scheduled within days and disputes usually are resolved in one day.
- Accessibility. Mediation procedures are less complex than courtroom formalities, and there's no judge or jury to impress.
- Privacy. Mediation meetings are held in private, and the disputed issues are never released to the public. Session notes are destroyed; only the agreement to mediate and agreement to settle are kept.
- Control. Mediation offers the most control to the parties over expenses, time, presentation of facts, and the solution.
- Effectiveness. Evaluations from Alternative Dispute Resolution (ADR) centers show that 85% of mediations end with satisfactory agreements.
PAY CLOSE ATTENTION Most court systems force 95% of their cases into a “pre-trial mediation.” Don't be fooled by the name; it's really a “settlement conference” presided over by a retired judge or lawyer. You won't get to present your facts but will get a lot of arm-twisting to compromise and accept a small percentage of what someone owes you. A common tactic is for these mediators to separate the parties, thus defeating the purpose of having everyone work together.
Mediation is more than getting people to compromise. A good mediator will remain neutral and guide the parties to a satisfactory solution. Be prepared to leave a badly managed mediation, for example, if the mediator coerces, badgers, or separates the parties, or otherwise manipulates the mediation. Sometimes a mediator will have a “caucus,” or private meeting, with one party so information can be discussed without interference. With permission, the mediator can reveal this information to the other party.
Discuss with your attorney how to find and schedule a meeting with a qualified mediator. Traditionally, mediation is not legally binding, i.e., enforceable by the court system (arbitration is). Recently, however, it has been recognized by most court systems that an agreement reached in mediation (just like in arbitration) is a contract and should be enforceable by the courts.
Of course, we all try to avoid disputes from the outset. The best defense is having a contract that includes a clause specifying dispute resolution. For guidance, review the contract clause for construction mediation and/or arbitration at www.carlylecc.com, and contact your attorney for specific contract language. —Boyd Petit, Petit Construction, Highland, Md., recently started Carlyle Construction Consulting to help resolve construction conflicts using mediation and arbitration.