Mediating Construction Disputes

Construction contracts frequently have mediation clauses, but few people understand what these mean, and whether they are useful. Mediation has a number of definitions, including assisted negotiation, but its most important features include a third-party neutral whose job it is to help parties identify the issues, generate options, and develop an agreement that comes from the parties themselves. Mediation is usually voluntary, and there is frequently an agreement signed stating that it is a confidential process.

The advantages of mediation are numerous. When parties are in the midst of a dispute, the communication between them has often broken down. There is a great deal of emotion, and people need to vent. When people are involved in a dispute, and are angry, it is very hard for them to think rationally. Mediation is an opportunity to turn back the clock, and gives each side the chance to really listen to and hear the other's version of the story.

Feeling listened to and understood often helps to diffuse the emotional part of a dispute, and both sides become more able to consider what their true concerns are and they can start working on addressing them. Once the key issues are identified, through brainstorming the parties can frequently come up with a mutually acceptable resolution to the problem.

As a mediator, I have seen the mediation process work over and over when parties come in believing that they will never resolve their dispute. There really is a magical aspect to the process. Even if the parties do not settle at the time, the information provided often helps to resolve the disagreement down the road.

Parties should not become involved in mediation if they are firmly entrenched in their positions, because it can add additional expense to the dispute resolution process. People have to try to approach the process with an open mind. If it is viewed as mandated by the contract and therefore a waste of time, then the parties really will be wasting their money.

I am a firm believer in mediation, because mediated settlements are usually complied with much more than judgments. Parties buy into the process and become invested in their agreements because they have a hand in drafting them. Rather than submitting to the rulings of a judge or jury, the mediated resolution to a dispute frequently repairs the relationship and provides a more secure footing for completing the project.