Construction contracts routinely require parties to mediate as a prerequisite to arbitration or litigation. Even if the contract doesn’t require mediation, many judges will still order parties to mediate before going to trial. While some disputes are resolved in mediation, too many times parties leave the mediation thinking it was a waste of time. Despite the title, I’m not suggesting that there is a formula that will always guarantee a successful mediation, but there are things that will increase your odds for success.
- Select the right mediator. Just because someone is an experienced, good mediator doesn’t make them the right mediator for every dispute. For a construction dispute, your chances of reaching a resolution increase if you have a mediator that understands construction industry concepts and construction law. If a lawyer has to spend a lot of time during the mediation educating the mediator on construction industry concepts or construction law issues, the chances of settling the case go way down. Too often, mediators who do not have a lot of experience with construction matters want to skip over the legal merits and simply jump to telling the parties how expensive it’s going to be if they don’t settle the case. Or occasionally, I’ve mediated with a former judge whose resume says they have experience with construction cases, only to learn at mediation that their experience is minimal, so they spend their time telling their best trial horror stories to try and scare the parties into settling. While these approaches may occasionally get cases settled, it usually only frustrates the parties and the lawyers. So when you select a mediator for a construction case, find someone that understands construction industry concepts and construction law. Even if it’s someone in a different location and you have to pay for a plane ticket, in the long run it will be worth it.
- Watch for the mediation sweet spot. Mediation is more likely to be successful if both parties have enough information about their case and their opponent’s case, but still have enough work left to do in the case to incentivize the parties to try and resolve it. There is no scientific formula for finding the sweet spot, but it’s critical that you begin watching early on to see when the window might open. If you mediate before you have enough information, people will be hesitant to settle for fear they are paying to much or giving up too much. Or if an insurance carrier is involved for one or more parties, adjusters may have a checklist of information that has to be provided before they can authorize settlement. If you wait until late in the case, however, then parties have often spent so much in attorneys’ fees and costs that it impacts how parties evaluate every offer and it becomes an impediment to reaching a resolution. So look for the mediation sweet spot and it will increase your chances of resolving the dispute.