Construction disputes and mediation: securing the right result and getting home for tea
2 March 2020
Most significant construction disputes go through, or at least flirt with, mediation at some point. Often it’s the last process they go through – because the success rate of mediation in securing settlements is very high.
Suggesting a mediation is no longer seen by any sensible party, including the courts, as a sign of weakness. Indeed, the courts actively encourage mediation as a form of alternative dispute resolution and may punish parties with costs sanctions if they refuse a reasonable offer to mediate.
As a result, mediation has become common in the world of construction disputes. It can be used as part of court litigation or arbitration, or as a standalone activity before proceedings, during adjudication, or even at an early stage as a dispute brews. No type of construction dispute is too difficult to mediate – simple payment issues are as-suited to the input of a good mediator as a complex defects, extension of time, or valuation disputes on multi-million pound projects.
One of the perceived negatives of mediation – the costs and their potential recoverability – is generally seen as less of a problem in the construction industry than others, probably as a result of parties used to bearing their own costs in adjudication. Weighed against the upsides – an early resolution of a dispute, and keeping the decision within the control of the parties (the mediator will try and guide the parties to a settlement but won’t force them – whether or not to agree a deal remains entirely up to the parties) – those costs can seem very good value. It is invariably a more attractive option than spending thousands arguing the point before an unpredictable adjudicator.
As the mediation world has developed, so have the tactics employed by parties and the sophistication of techniques used by mediators. Many mediators now work full time and so have a range of tricks they can use to help broker a deal. And importantly, the idea that parties would posture all day and wouldn’t start negotiating till the evening, leading to all-night mediations and a settlement achieved through grinding the parties down, has lost its shine: most mediators will see that if a deal can be done it can be done during the working day, meaning parties can settle their dispute and be home for tea.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2020.