I wrote previously about not using mediation to resolve construction disputes. I mentioned that all parties may not want to settle the dispute, it was not binding, and it was an intermediate step that could consume money and time. So, how will you know when not to use mediation on your construction dispute?
The most common denominator I have observed in my career is that one party is absolutely unresponsive to the other party during the construction period. This has ranged from an architect that would accept absolutely no blame for late submittals or design mistakes to the alleged “Construction Manager” that blamed all of the schedule problems on the contractors. It has included owners that will not recognize their responsibilities on the project. It included a contractor trying to shave their costs on the project.
By the time the dispute has festered for a while, it will be costing one or more on the project some serious money. The longer the dispute lingers, the more money it costs. The more it costs, the more it hurts. The scale doesn’t matter. A small firm with a $100,000 dispute is likely to be hurting as much as a larger firm with a $10 million dispute.
Mediation is based upon two parties willing to settle a dispute. This is the fallacy of having mediation, even as a stepping stone to arbitration, on a construction project. It is an impediment in that the parties must waste time and money on attorneys and experts. This is especially true when one party has no intention in resolving the dispute and uses the mediation process to drag out the time involved.
Comments have been made that is just a matter of time, so why not use mediation? Well, time is money and one of the parties is usually holding the others’ money. Time is important to that party! The lost use of the money is usually crucial. Time is the enemy to the injured party. The wronged party needs a prompt, binding resolution to the dispute. Mediation does not provide this!
Arbitration will settle the dispute so cut to the chase and go immediately to arbitration! After all, this is why we have Alternative Dispute RESOLUTION.
Here are links to the previous blogs regarding Arbitration and Mediation:
