Be prepared early
Construction disputes are complex. Often a dispute related to a small part of the works can lead to serious and far-reaching consequences unless a solution can be found quickly. The decision regarding when to mediate, therefore, needs to be made after considering the effects of any delay. If mediation is undertaken at an early stage and while the project is still under construction, there is a greater likelihood of finding a commercial resolution before costs build up and the parties harden their positions. Additionally, parties will be able to control many more issues and be able to “trade” their claims. If a dispute continues until after construction is complete, usually the only resolution the parties are negotiating for will be a purely monetary one.
In any event, the Civil Procedure Rules and the related Pre-Action Protocol for Construction and Engineering Disputes (in the United Kingdom) compel all parties to examine a case fully, even though there may be no certainty that proceedings will be issued if settlement is not reached and no guarantee of recovering the costs involved if the claim does not proceed. The mediation is held on a “without prejudice” basis, so communications made for the purposes of the mediation will not be admissible in court proceedings: though not the fact that mediation has taken place.
Know what to expect
How a mediation is conducted will depend on the type of case, the parties, the content of the dispute, and the timing. Most mediations are conducted in a day, and although there are many shapes to mediation it can be described as consisting of any number or combination of joint and private meetings.
Before a mediation, the mediator will be in contact either by phone or at a pre-mediation meeting with the lawyers to confirm the details and sometimes with the parties to address concerns about the mediation. For example: in multiparty cases, the mediator might confirm the negotiation approach of the claimant and the defendant group. In complex cases where the defendants are at odds on the issue of contribution, a separate day of mediation with only the defendants might be advisable before parties meet to resolve the case as a whole; and sometimes a site visit may be valuable to the mediation, particularly if there has been no opportunity for an inspection or where the dispute revolves around workmanship and defects.