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Seven Benefits of Mediation in Construction

On Behalf of | May 21, 2014 | Business Law, Firm News

The construction law attorneys at SMLH explain seven benefits of using mediation to solve contractual disputes in the construction industry.

Mediation is becoming increasing popular in the construction industry as a method for resolving disputes, and for good reasons. Mediation offers several advantages over other forms of alternative dispute resolution (ADR) and litigation.

Here are seven benefits of using mediation to solve contractual disputes in the construction industry:

1. Open Schedule: Mediation sessions are not subject to court schedules, and thus are very flexible.  They can usually be scheduled within 1-2 months and take place at a time and place that is convenient for all the parties. This is particularly important in the construction industry when the parties involved in the dispute are often geographically distant from each other. Construction mediation sessions generally range from a few hours to 1-2 days.

2. Inexpensive: Litigation in the construction industry is expensive. The expert witnesses spend thousands of dollars on preparing arguments, analysis, reports and exhibits for trial. Mediator and attorney fees are relatively low compared to the costs incurred in trial preparation and trial.   Mediation can avoid or truncate some discovery.

3. No Unnecessary Conflict: Litigation can serve business relationships to a point that they are not recoverable. Mediation can help save business relationships, especially if the conflicting parties have to work together in the future. Mediation allows the principals of each party a chance to cooperate and come to a settlement on their own terms in an informal face-to-face setting.

4. Control of the Process: Mediation gives the parties more control over the outcome of the dispute. The  rules and procedures are much more relaxed than litigation.  The parties can tailor almost every aspect of the construction mediation session. The mediator helps keep the parties focused on dispute resolution.

5. Success Rate: Typical success rates for Construction mediation are reported to e in the 80% range.

6. Confidential and Private: Arbitration and litigation procedures are often announced in local newspapers and become public records.  In Mediation, the parties can agree to keep negotiations, positions and outcomes confidential.

7. Good for Multi-Party Disputes: Construction disputes involve many parties. Whether the dispute is between property owners and design professionals, general contractors and subcontractors, suppliers and sureties, or any combination, mediation is an effective and efficient process for dispute resolution.

Mediation has become increasingly popular in the construction industry for resolving contractual disputes. For more information about pursuing mediation and contract law, please contact the construction law attorneys at SMLH.