Mediation is a voluntary Alternative Dispute Resolution (ADR) method, which is often encouraged by the Courts to resolve construction disputes. Mediation is confidential, typically faster, more flexible, and less expensive than formal proceedings, with disputes often concluded in a single day.
Mediation in construction can be very successful, generally designed for lower value disputes, whereby it would not be as cost effective to use other dispute resolution methods and where there is a desire to preserve and re-establish relationships between parties.
An impartial third-party construction Mediator assists the parties to achieve a mutually agreed settlement rather than impose a decision on them, as with other ADR methods. Mediation focuses on what both parties need, as opposed to what rights they have.
The Cost of Mediation
The costs involved with Mediation are relatively low compared to other ADR methods and they are generally shared between the parties, making them more appealing. With Mediation proceedings more commonly taking place online due to the Covid-19 pandemic, with remote or virtual participation in Mediation sessions, the cost of venue hire is also removed. Arbicon can provide an RICS accredited Mediator for construction disputes.
Effective Mediation in Construction Disputes
The key to an effective Mediation is a mutual commitment by the parties involved. If both parties are not willing to come to an agreement, then the Mediation is likely to fail.
Reaching the point where Mediation is agreed as the way forward is often the most difficult part. Arbicon are experienced in acting as representatives, taking disputes through the Mediation process, or can appoint a Mediator.
Our expert team can:
- prepare your case for Mediation
- seek agreement to Mediation proceedings
- instigate a Mediation on your behalf
- attend any meetings
- draw up the resultant Settlement Agreement to fully resolve the matter on the day.
It is essential that any agreement reached is quickly and comprehensively recorded and signed in writing by the parties, ideally on the day, for there to be a binding end to the dispute.
Mediation does require commitment from both parties, which is often difficult in construction disputes, which often arise when one party quite deliberately refuses payment or performance thus will not cooperate. If this is the case, a different method of ADR is advisable such as adjudication.
Starting Mediation
There are several ways in which a Mediation can be instigated to resolve construction disputes:
- A Mediation Clause - Many construction contracts will include a clause stipulating that parties should attempt to settle disputes using Mediation in the first instance.
- An agreement to Mediate - This is where the parties agree to use Mediation, usually one party contacts the other asking if they are willing to use Mediation to settle their dispute, known as the ‘Referral Letter’.
- Court Recommendation - The Court has recommended or ordered that the parties should attempt to use Mediation to settle the dispute.
Is Mediation the Right Choice for Resolving my Construction Dispute?
If you are looking to resolve your construction dispute quickly and at a low cost, obtaining an outcome that benefits both parties involved, whilst maintaining a good relationship, then Mediation could be right for you. If you are unsure, find out more about the benefits of using Mediation for your construction dispute.
It is important to consider the commercial risk and cost involved with achieving a settlement of a dispute. That risk will basically be the time, cost and likely outcome. Mediation is often the cheapest and quickest way but it gives no guaranteed outcome of rights, only a deal will do that.
If you would like advice on Mediation for your construction dispute, please use our contact form or call one of our offices.