Construction Dispute Mediation

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What Is a Mediation in Construction Dispute?

Mediation is a way to resolve a dispute in a manner that is quite different from arbitration and litigation. In mediation, there is usually a mediator that is agreed to by both parties. However, the significant difference is that mediation doesn't have a legally binding effect upon the parties.

Mediation is a truly low cost alternative to arbitration and litigation. In addition, mediation might allow both employer and contractor to continue a prosperous relationship while mediating a specific issue of controversy. Typically, after the expenses incurred by litigation and with how adversarial and invasive it can be, parties want nothing to do with one another.

How Should I Select a Mediator?

Below are some basic considerations that typically go into selecting a mediator:

Impartial - Most importantly, a mediator should be an impartial party that both the contractor and employer respect. A mediator can be appointed through the courts or privately employed by the American Arbitration Association. 

Experience - After fairness, it is vital to select a mediator that is equipped to handle the needs of the dispute. For complicated matters, selecting a mediator with expertise in the field where the issue arises from will help keep the mediation simple and quick. For example, if the dispute is over a new type of material going into a new style of bridge span over a difficult terrain, it may be wise to consult with a mediator who is not only knowledgeable with engineering, but has handled bridge construction disputes in the past. Likewise, where the issue is relatively simple, a less experienced mediator should be more than adequate, and may save some money as well.

Cost - Mediation can still be quite costly, and therefore it's always wise to consider the hourly fee of the mediator when selecting one.

How Does Mediation Work?

Mediation does not work like a typical court. Instead, both parties are usually in different rooms, and the mediator goes back and forth between rooms attempting to broker an agreement. Both parties will attempt to negotiate through a mediator and present offers and counteroffers to various issues.  

When Should Mediation Begin?

In construction disputes, mediation should begin whenever a problem that has been brought up between both parties can't seem to be solved without the intervention of a third party. It is important that mediation begin before the situation becomes counter productive or negative. The purpose of mediation in construction disputes is to prevent a breach of contract. Both parties have an inherent interest in keeping the contract and remaining profitable. Moreover, once a contract is breached, the only real recourse may be through filing a lawsuit and initiating litigation. This can become costly very quickly, and may destroy an otherwise prosperous business arrangement.

Should I Contact an Attorney?

A mediation lawyer plays an important role in construction disputes. For example, mediation or contract attorneys can help find a good mediator and work with their clients in presenting a favorable but fair position. Furthermore, these attorneys can advise their clients on what is legally binding. Therefore, if a client is asking too much, an attorney may instruct their client to compromise because of the more severe consequences of litigating the matter in court.

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Last Modified: 07-25-2014 03:11 PM PDT

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