Keeping out of court

Mediation or alternative dispute resolution can take whatever form the parties agree it may take. This can range from little more than a framework for “without prejudice” meetings through to the use of an independent third party or mediator, all the way to a mini trial where all the issues are heard by both parties.

Mediation is a consensual non-disclosable procedure from which any participating party may withdraw at any time unless the parties so agree. There is no binding outcome which will be enforceable as the equivalent of a judgment. It is impossible in the space of a short article to cover the options available, but the most commonly used is the appointment of an independent mediator.

Who is involved?

There is no limit to the number of parties which can be involved in mediation. In complex construction projects, three or more parties may be involved, particularly where defects issues arise. It is however the level of the personnel involved which tends to be critical to the success mediation. It is vital that the decision- makers within each of the parties participating are able to make decisions that bind that party in the event that a resolution can be reached. Otherwise, a scenario may develop where there is willing among those at a mediation hearing, but those who actually make the decisions at senior level are not present.

This is a skilled role where the mediator has to be able to gain the confidence of the parties, demonstrate his own grasp of the subject matter, and assist the parties in trying to reach a resolution of the dispute. The bodies providing mediation services retain a list of mediators and as mediation has been used for some time now, it is fair to say that there are a number of mediators within the construction arena who are recognised as having the necessary background and skills to fulfil the role.

The venue

In order for a mediation to succeed, housekeeping matters can be surprisingly important. During the course of a mediation hearing there are often long gaps where a party is left alone and clearly the environment for the mediation is going to affect matters. Identifying a location with sufficient rooms to enable parties to break off into caucus meetings, sufficient food and drink to keep the parties happy and, bearing in mind some modern office buildings, access to daylight and fresh air, may well prove to be important ingredients in setting the scene for a mediation.

Before deciding to embark on mediation decide whether your opponents are genuine in their approach

Innovative outcomes

Because the parties are not, unless they agree to them, constrained by any strict rules, the negotiations during a mediation can demonstrate a flexibility not available in a more traditional dispute resolution arena where the compensation to either party is represented by money alone. Mediations can lead to conclusions where future further work is to be carried out.

There are extreme views about the benefit of using mediation, usually based on the experiences parties have had of the procedure. Mediations can be time consuming and costly, particularly when adjudication can be an alternative route to a binding outcome, at least in the interim. But there are many scenarios where mediation may have its benefits. In order to work, it clearly requires all parties to approach the mediation in a genuine attempt to resolve matters, however far apart their starting positions may be. Part of the mediation process is to flush out information and documentation which in a more traditional form of dispute resolution may take months if not years to identify.

Mediation also enables parties to identify their own strengths and weaknesses, as well as those of the opposition, and often gives senior management an opportunity to satisfy themselves that the information being given to them by middle management does bear up to closer scrutiny.

It is important to remember that mediation is a “without prejudice” process and therefore nothing that is disclosed within the mediation can be subsequently referred to a court or arbitration, save only when the parties have agreed that this is the case. A critical issue is that the parties will bear their own costs of the mediation, regardless of the outcome (unless of course any settlement incorporates these costs as part of a deal), so there is an unavoidable risk that the cost of taking this route could be wasted.