Construction Disputes And Mediation – Info & Advice
Construction disputes have a highly negative effect on businesses. The business faces not only the cost of solving the conflict, which can be substantial but also the possibility of loss of income. This can come about when work stops until a resolution is achieved, or if crucial personnel are diverted from their normal tasks to assist in finding a solution to the dispute. Not only are such disputes damaging to the business, but also to the contractor and others involved in the contract work. Engaging an expert mediator can help to get construction disputes resolved before the costs escalate. Mediation services have a high success rate, and this is an avenue that should most certainly be explored if face-to-face consultations cannot break the deadlock.
Benefits of using mediation
Firstly, mediation provides a process to quickly bring all parties to a meeting. The mediation process can be financially beneficial to both parties, saving on large legal fees that can accrue if the conflict appears before a civil court for resolution. It can take quite some time, sometimes even years, for a dispute to be heard in court, depending on the court calendar and the nature of the evidence that needs to be gathered. This is especially true where more than two parties are involved. The long delays involved in getting a hearing in court could cause substantial financial losses to all parties involved in the dispute. Secondly, when the parties reach a resolution during mediation, the working relationship between them will remain on better terms, since both parties will mutually agree to the outcome. This, of course, is in contrast to the wake of a court hearing, where one or more parties involved in the dispute may feel aggrieved by the allegations made and by the decision of the court.
What the mediator does in construction disputes
Understanding the role the mediator plays in assisting the parties to come to an agreement is very important. He or she is not there to make any decision that the parties are expected to abide by, nor is the mediator there to determine the rights or wrongs of each party’s claims. The mediator will not give any opinion on the rights of any of the parties involved (unless in rare circumstances asked to do so by the parties in writing). The mediator acts as a facilitator, allowing both parties to present their point of view in a controlled, civilised and respectful way. The mediator will ensure all discussions relevant to the dispute will happen directly between the disputing parties and will remain completely impartial. While the agreement finally reached will be that of the parties themselves, an experienced mediator may well put forward some innovative suggestion for their consideration. This sometimes makes all the difference.
Is seeking mediation compulsory?
There is no general legal requirement to use mediation to settle conflicts, although there is often provision for it in the contract, especially if one of the standard forms is used. Nevertheless, a court could rule that any party that rejected an attempt at mediation acted unreasonably, and can make a judgment against such parties based on that ruling. Simply put, refusal to engage in mediation can result in a party being penalised in costs. This puts an obligation on the parties in construction disputes to thoroughly look at all options prior to engaging in court proceedings. Important legal decisions only serve to enhance the strength of mediation. In a landmark case involving a lawsuit against Railtrack, the court found in Railtrack’s favour. However, Railtrack had refused to go to mediation, and the court ruled that because of its insistence on proceeding to court, the plaintiff would not be made responsible for Railtrack’s costs.
Consider mediation as vital before litigation in construction disputes
There are situations when a court will rule that a party’s refusal to attend mediation is not unreasonable. When construction disputes arise, seeking legal advice from a solicitor or barrister with experience in this area of the law is highly recommended. Although it is not necessary to have legal representation, especially in a complex construction case, representation at the mediation is of great assistance to the parties and the mediator in bringing about a successful conclusion. It should be noted that many barristers now accept instructions to act directly without a solicitor, although not all cases are suitable for this course.
Stewart Patterson has considerable experience in the field of construction disputes, having represented property owners, contractors and sub-contractors, during his career at the bar as well as mediating in such cases. His experience enables him to have a sympathetic understanding of all sides. He is also well versed in the subject as he has a master’s degree in contsruction law.