Advantages of Mediation
The Six Universal Advantages of Mediation
D. Albert Brannen
March 2012
The presence of multiple parties and causes of action ultimately drive up the cost of litigation for everyone—making mediation a valuable alternative to resolving construction-related legal disputes. Mediation is particularly well-suited for construction matters because many projects have fixed budgets and completion dates.
Mediation is a structured settlement process facilitated by a neutral third party. Unlike a judge or an arbitrator, the mediator has no power to issue a binding decision. The process usually begins with a joint conference including the mediator, all parties and their representatives. Then, the parties break into separate rooms with the mediator shuttling back and forth.
The process works best when the mediator holds some expertise in both the legal issues and the substantive construction-related issues at the core of the parties’ dispute. The process only works if the parties make a good faith commitment to explore their respective interests and be patient through the process.
Regardless of the nature of the underlying dispute, mediation has six universal advantages: choices, control, confidentiality, cost, time and closure.
Choices
The parties involved in mediation have choices that don’t exist in traditional adversarial litigation, such as the place, date, time and ground rules, as well as mediator selection. The parties may choose to meet before the filing of any formal legal claims, early in the litigation or arbitration process, or at the end of the discovery period. They are free to leave the mediation at any time if they are not satisfied with the process, and may resume the process at a later date. They also can select remedies or compromises that aren’t available via litigation.
Control
The parties have more control over the process and outcome. Most importantly, they can decide whether to settle. In other words, unlike a judge or an arbitrator, a mediator is not empowered to unilaterally impose a remedy on a party.
Confidentiality
Absent a special sealing process, court records are open to the public. Competitors, creditors, customers, employees, insurers, bonding companies and other parties not involved in the litigation may access allegations made in the lawsuit. The damage from unfounded allegations becoming public may be irreparable. Mediation can successfully keep such allegations private.
Cost
Mediation can cost considerably less than litigation or arbitration, especially if the parties get together early. Full discovery is not necessary for the parties to get an idea about the likely outcome of a claim.
Plaintiffs often are guarded during mediation because they think the defense is attempting to get information to defend the claim (and to defeat the plaintiff). However, the parties can share enough information to let the other side properly assess their risk of liability and possible damages.
Following discussion of the merits of a case, the parties may decide it is best to pay to make the case go away or to withdraw the claims—before racking up tens of thousands of dollars in discovery costs and attorneys’ fees only for a judge or jury to rule against one of the parties in a public forum.
Time
State and federal cases can take years to be processed through the judicial system, especially given the court system’s current budgetary limitations and overwhelming caseloads. Formal arbitration also can be very time consuming. When parties agree to mediate, their day in court may come much sooner.
Closure
When the disputing parties agree to resolve their differences via mediation, they get closure. They know they can move forward without the cost, disruption and distraction of a pending legal claim. Mediation usually leaves all parties unhappy to some extent, but it’s better than receiving an adverse judgment imposed by a court or an arbitrator.
Mediation may not be appropriate in every situation, but significant advantages exist for disputing parties in the construction industry due to its proven track record of helping short-circuit the adversarial litigation process. Any party in a legal dispute should seriously consider engaging in mediation before submitting to the judgment of a court.
SOURCE: www.constructionexec.com