Philip Bruner, Nancy Holtz and Stacy LaScala | JAMS
In this episode of the JAMS podcast, JAMS neutrals (Hon.) Nancy Holtz (Ret.), Stacy La Scala, Esq. and Philip Bruner, Esq. discuss how parties and counsel can make construction mediations more effective by focusing on preparation, communication and problem-solving long before the mediation session begins. Drawing on decades of experience resolving complex construction disputes, they explore the factual, business and interpersonal dynamics that often shape these matters and explain why successful outcomes depend on identifying key decision-makers, addressing potential obstacles early and fostering candid discussions about the strengths and weaknesses of each side’s case.
Throughout the conversation, the neutrals examine:
- The critical role of pre-mediation calls in identifying settlement barriers, decision-makers and information gaps before mediation begins.
- How mediators and counsel can uncover the real drivers of construction disputes, including factual complexities, delay issues, trust concerns and competing narratives.
- Best practices for mediation briefs, joint sessions, party exchanges and client preparation, including how counsel can shift from pure advocacy to problem-solving to create a more collaborative and productive path toward resolution.
This episode provides practical guidance for construction industry stakeholders, including owners, contractors, subcontractors, insurers and counsel, emphasizing the importance of early preparation, transparency and strategic use of mediation to resolve complex disputes efficiently and effectively.
For those interested in exploring these issues further, the speakers will continue the discussion during the upcoming webinar, “Bridging the Divide: Mediation Strategies for Complex Construction Disputes,” with additional focus on mediation preparation, barriers to settlement and practical paths toward resolution.
Transcript
Moderator (00:00:00): Welcome to a special podcast series from JAMS, The Mediation Table: Conversations in Conflict Resolution. This series focuses exclusively on mediation, exploring key issues, strategies and best practices with leading JAMS neutrals and industry professionals. In this episode, we’re talking about how to make construction mediation more productive, not by rearguing the merits, but by preparing the right information, involving the right people and structuring the process around settlement. With us are three distinguished JAMS neutrals who have decades of experience of doing just that. Judge Nancy Holtz, whose resume includes 15 years on the Massachusetts Superior Court, Stacy La Scala, a former attorney who is also an accomplished author and lecturer, and Philip Bruner, who practiced for over 40 years as a lawyer before becoming a mediator.
Moderator (00:00:58): Philip, Stacy, Judge Holtz, welcome to the podcast.
Philip Bruner (00:01:02): Great to be here.
Stacy La Scala (00:01:04): Yeah, thanks for having us. Looking forward to a great exchange of information with my colleagues.
Judge Holtz (00:01:09): And I’m looking forward to this as well, and apologies in advance, I am battling some laryngitis, but that will not dampen my enthusiasm to be part of this great group.
Moderator (00:01:16): Stacy, let me start with you. Before a construction mediation even begins, what do you need to understand beyond the briefs about the dispute, the personalities and the business realities to give the mediation a real chance of succeeding?
Stacy La Scala (00:01:33): There are a number of things that are essential to pave the way towards a successful resolution and I believe one of the most important pieces of the puzzle is to have a pre-session call, and that is an opportunity to speak with counsel, sometimes counsel and their client, to discuss the matter, to discuss the process, but also to identify any impediments that might be presenting themselves to the mediation session itself. And that pre-session call really has to occur well before the session itself. And it always brings with it new ideas, opportunities for resolution that may not be present or presented in the mediation brief. It’s an essential part of that puzzle.
Philip Bruner (00:02:30): It’s critical, I think, to get a good feeling for just what it is the parties really expect to mediate. This is, what are the things really dividing them? Is it money? Is it what happened out on the job site? Is it who’s responsible for a particular kind of delay, and is there a concurrent delay involved in the project which would change the compensation picture? Just what is it that the parties are looking for?
Judge Holtz (00:03:01): One of the things to me that we have to bear in mind is sometimes we think about disputes, family law, divorce, those are all emotional, and construction cases are dry, dusty business disputes. But I think a big piece of it, and this dovetails into what you have just said, Phil, is you need to know what are the obstacles, and part of that is knowing the history of the parties. Have they worked together in the past? Do they want to work together in the future? And also, you need to know who are the big personalities in the room, because a lot of times some of these different construction players… there’s a long, complex history. And so, it’s not enough just to know and understand the claims and defenses and respective positions of the parties, but we as mediators really need to tap into, what’s the next layer down? What are the real underpinnings of the dispute beyond just here’s the number, here’s the monetary demand, here’s the monetary response. There’s a lot more to most mediations.
Moderator (00:03:59): Let me get just a little bit more granular. How do you identify who needs to be involved in the mediation, both, the people with settlement authority and the people with information that can help move the dispute forward? Phil, I’ll start with you.
Philip Bruner (00:04:14): Well, the people with settlement authority certainly have to understand fully what’s on the table here. Now, it may be that they are not all that up to speed, and they may need some other people involved. And like Stacy spoke a moment ago having the immediate opening session, if you will long before mediation to just talk about it and get the parties’ feeling and our feeling really is to just where we are with this, and then as Stacy mentioned the impediments to settlement.
Stacy La Scala (00:04:57): This is really kind of an important piece of the puzzle that these pre-session calls really bring to light. For instance, if you’re dealing with a very large construction dispute, you know that the decision-maker is actually a group of decision-makers, usually starting off with general counsel, and it works up the chain to potentially a vice president, potentially even depending upon the amount in controversy, the board of directors or a certain group that has to actually review and approve of the decision-making process established at the time of the mediation. So, these pre-session calls, it’s really important to determine who’s going to be participating because on the large exposure cases, we usually get general counsel that is participating who has some settlement authority, but they have to report back to a series of individuals, and those individuals could be actually internationally based.
I just had a pre-session call, a very large case, where we have specific decision-makers in China and London. It was really important to understand that, because we’re going to have a couple of them that are going to be virtual in the mediation process, we’ve got huge timeframe issues. And I know now that at the end of the mediation, I’m going to have to do a recommendation, and each side is going to have to take it back for approval to the respective boards. Very different dynamic than having individuals sit there with money in their pocket ready to spend and get it done today. There’s a different expectation.
Judge Holtz (00:06:37): I think that the pre-mediation call is essential to understand, much like the need to understand the backstory of a dispute, the pre-mediation call is the perfect time to understand, who are the dramatis personae in the construction mediation. It’s a chance for you to understand with a hopefully candid conversation with counsel, are there people in there who are going to be obstacles? And sometimes you can really get a better sense from a candid conversation with pre-mediation conversation with counsel, understand who’s the power player in the room. So, I think that a pre-mediation call is absolutely crucial to ensure that you do understand, and you know who the players are and what are they bringing to the table. And as part of that, I ask the attorneys, and most of them are pretty candid with me. I’ll ask them, “Do you have any client control issues?” Because sometimes an attorney will make it very clear that, “I have a client who has very unrealistic expectations, and quite frankly, Judge, I’m going to need you to help me because, not just with the other room, but I’m going to need some help in my room.” And that can only really be sussed out with a nice, robust pre-mediation call, the kind that Stacy was describing.
Philip Bruner (00:07:56): Sure. And, depending on just what the case is, that is, have the parties already commenced suit or are they just thinking about it and this is something that just came up? There’s an important difference there. If clearly if there is a suit having been commenced, there’s a lot of paperwork. People have had to put together summons and complaints and presumably motion papers and so on, so the question is mediators getting ahold of those and understanding what the parties have been telling the courts. That’s important. And the impediments to mediation I always invite counsel to send a confidential memo just to me so that I have it in writing what they’re saying is a big problem with settlement. And I’ve seen over the years many different explanations for that including personalities, including legal issues that lawyers get hung up on a variety of different things, so it’s important to get as much information in advance as we can.
Moderator (00:09:08): And Judge Holtz, talk about what makes for a useful mediation brief and what separates one from just flame-throwing?
Judge Holtz (00:09:17): To me, a useful mediation brief in an alternate universe, the attorneys are actually candid with the strengths and weaknesses of their claims and defenses, and so taking, picking up from where Phil just left off usually the parties exchange mediation memos in construction cases, which is great, but they’re basically advocacy pieces, and they really don’t give me any insights. And so, I too like to ask the attorneys, if you would like to give me a more honest assessment or some information, some intel, as to not just why you love your case, but some of the challenges, some of the downsides and weaknesses to your claims or defenses, you can do it in a separate email and sometimes, quite frankly, in my experience, they don’t even want to do that. They cannot bring themselves, attorneys, to reduce to writing that there’s anything wrong with their case, whether it be claim or defense.
Philip Bruner (00:10:14): Following up on that, when you talk about advocacy documents, yes, there are some things that counsel have used to try to impress somebody on an early motion, but basically it comes back to the issue, what are the legal and factual issues that need to be resolved? Is that all spelled out in the brief? Are the parties willing to stand by those, or where are they willing to send the mediators separate detailed statements of just what it is that is separating them? And it’s interesting. Sometimes it’s a factual issue about somebody said one thing out on the job site, and somebody else says, “No, that’s not really what happened.” And of course, then you’ve got one type of issue. But the other type is somebody says, “Well, I’m entitled to $50 million,” and but they can’t really explain fully how they get there, or they come up with the wrong factual or legal reasoning and all kinds of things. At any rate, that’s what makes construction mediation particularly interesting and difficult.
Stacy La Scala (00:11:19): A lot of times you have to figure out what the real dispute is about. Whether or not that’s about pure money, which a lot of these are, but a lot of them are actually emotional. You think of construction as non-emotional, but you have individuals involved in the decision-making process in the field that get very attached to that decision-making process, and if they are the ones making the decisions in the mediation, that’s an added layer that you have to understand as the mediator and figure out how to get around. Many of our disputes are based upon a violation of trust. Contractors have been working with one another for 20 years. Something goes wrong in their most recent endeavor, and there is a perceived violation of trust. That sometimes is the more important issue than the money. One of the issues or one of the strategies that I use in my mediations is a joint session. I like to bring the parties together to meet, to have introductions. A lot of times they haven’t spoken to each other in more than a year, maybe two years and to have a conversation.
Moderator (00:12:32): Judge Holtz, what’s your view on joint sessions? Can they be productive, or when do they become counterproductive?
Judge Holtz (00:12:38): I think the short answer is, when to do joint sessions, can they be helpful or counterproductive? It depends, is my answer. I think that most of the conventional training that we have as mediators, the formula is, you begin with a joint session, and then you break out into private sessions for the rest of the day but I do not believe that it has to be that formulaic, and I think that the joint session, as Stacy has advocated many times in the past, and rightly so, is the joint session should be a dynamic tool, and it can get used at any time during the mediation day. And in fact, sometimes the joint session at the beginning of the day is really little more than a meet and greet, but then as we go through the day, sometimes it’s helpful to reconvene again because it’s a chance for everyone to touch bases and discuss what have we learned where are we at, are there any areas of agreement, have we come any closer?
And so, I think that for me as a mediator, I don’t want to be formulaic in my use of the joint session. It is a dynamic tool to be used throughout the day. And sometimes reading the room, you spot a window of opportunity, and I make a decision using my experience and instincts and reading the room that this is the time when it might be productive to get some heads back together again, and it could be a subset of the whole room. It could be just experts. It could be just principals. There are so many permutations, but the joint session is absolutely crucial, used well and wisely and surgically.
Stacy La Scala (00:14:16): In the bigger construction matters I utilize joint sessions before the mediation, and they’re termed “expert exchanges” or “expert presentations.” I bring the parties together for a very specific purpose and that is to exchange expert information, because most of these larger construction matters are expert-driven, so establishing the foundation as to what do the parties agree, what do they disagree, and what are the basis upon those disagreements before sitting down for money is sometimes an extremely useful tool to set the stage.
Moderator (00:14:58): I want to talk about the counsel-client relationship and the counsel’s role in moving the mediation towards resolution. Judge Holtz, how should counsel prepare clients for a mediation differently than litigation, especially when it comes to evaluating risk, expectations and settlement options?
Judge Holtz (00:15:16): I think that counsel should prepare their clients for mediation by reminding their clients, and quite frankly themselves, that ADR mediation stands for alternate dispute resolution, and remind their clients this is not a trial, this is not an arbitration. Mediation is not a battle to be won. They need to come to the mediation prepared to have a give and take, and too many times attorneys kind of war game their day in advance with their client as to how they’re going to take and how much can they take, rather than figure out how much are they going to have to give.
Stacy La Scala (00:15:53): Yeah, I would add to that. A large part of the role of the mediator actually is an educational process for the parties to bring them into a mind sphere where they can actually resolve the matter, because they do come in the front door pounding on their chests, they’ve got their advocacy hats on, and a lot of the tools that we use as mediators are to change that hat, so to speak, and bring them into a collaborative effort in order to get the matter resolved.
Moderator (00:16:26): Phil, one of the things that I think counsel are probably thinking about is how candid I need to be or should I be with the mediator. How candid do you think the counsel should be with the mediator about the weaknesses in their case and their client expectations or barriers to settlement?
Philip Bruner (00:16:42): I think frankly that they should be candid because that’s going to be the basis upon which the case is going to be resolved at some stage. Whether it’s mediation or going into court they can’t be telling a story that can’t be supported, and some of the problems can be if counsel has been telling the client, “Oh, you got a great case,” and, “We’re going to make a lot of money on this,” and then it turns out that the facts aren’t quite what counsel have been relying upon for that and so I invite them to be candid, and that’s where sometimes I get counsel into a room alone and talk to them about the different issues, or get the two counsel in together and say, “How do you guys differ on this? And how does, what’s the law?” Say in the area that you’re concerned about, and just what law are you relying on? You got to see if you can get some harmony in all of that and get the lawyers thinking along the same lines.
Stacy La Scala (00:17:50): Yeah. I use the same basic technique that Phil does as well. I usually start off the mediation process with everybody in separate sessions, in separate breakout rooms, visit with everybody. At some point in time, I’ll have a meet and greet. At some point in time, I’ll put everybody back together. But at a point early on in the process, I will tell all of the parties, “Look, I’m going to probably want to talk to the attorneys by themselves.” I’m not here as your arbitrator or your trier of fact. I’m trying to get you into a resolution framework. Where’s your client headed? Where are you going? Just a pure straightforward question. And then sometimes I flip it on them, and say, “Where do you think the other side’s going?” All right? So, putting it in their head about, oh, wait a minute, I have to think about where the other side’s perspective is as a part of this resolution process. Again, that sometimes creates a collaborative effort.
Moderator (00:18:48): Judge Holtz, and Stacy and Phil, you’ve given lawyers a lot to think about. But I want to go around for one more question, and to ask you if counsel remembers only one thing from this conversation, before walking into a construction mediation, what should that one thing be? Phil, I’ll start with you.
Philip Bruner (00:19:11): It’s going into the factual complexities of the case, because typically that’s where a lot of the dispute lies. You talk about construction, let’s just take delay for example. A project gets delayed, and there’s different causes that could be the cause of delay because they delayed one aspect of the construction process but not another, and then you get into a discussion about the so-called critical path, and there can be multiple critical paths on a project. And you get people to start talking about the critical path is here, and that’s what caused it, and you get somebody else saying something on the other side talking about a different critical path, or they’re talking about concurrent delay. That was: “It was raining outside anyway, so the work couldn’t be done even if the material suppliers were late in delivering the material,” and the question is which comes first, the chicken or the egg? And you can see the complex issues that can come up in construction. And a lot of what we do in mediation is help people kind of work through some of those things.
Stacy La Scala (00:20:28): I would follow that up with I think the pre-session call is one of the most important takeaways from this conversation. I think counsel honestly needs to have a one-on-one discussion with the mediator in advance to set the stage, to make sure that there are specific information provided to each side to identify gaps, to identify funding sources, to make sure that once you hit the session itself, that you are moving forward. I literally had a call with counsel for a claimant this morning, mediation’s in 45 days, but they have just updated their scope and cost of repair and the defense doesn’t know about that. They’ve just updated their damages; the defense doesn’t know about that. And they don’t know what the funding mechanism is for potential settlement. All of those questions and obvious gaps in providing information to the defense are significant. If you wait until the day of the session to identify those, your session’s done. You have very limited ability to get the matter resolved. Identifying them well in advance is an essential component. I think it’s the best practices for a mediator in particular, but for counsel, reach out to your mediator as soon as it is set. Set up a call. Go through the case.
Judge Holtz (00:22:01): if I could give attorneys one takeaway from this conversation is that, and if they want if they want the case to settle, then they should come to a mediation and represent their client as a counselor, not as simply an advocate. Attorneys who spend the whole day with their client entrenched, holding their position at all costs don’t do their client any good, and in fact, it’s a disservice to their client. This is not a trial, this is not an arbitration, and spending the whole day, holding that hill, it won’t get the case settled. It’s a problem-solving exercise and it should be a robust, candid discussion of strengths and weaknesses, and again, emphasis on not just strengths, but weaknesses. I always tell the attorneys that they should come to a mediation, put down, just for today, put down the gladiator’s sword and take up the diplomatic credentials, because this is your day to work with the other side. That’s all counseling. It’s not just advocacy. And so again, take off the advocate hat, put on the counselor hat, and you can get your case settled. And the last thing on that point, I would say, we are your ally. We as the mediators, we’re here to help. Our goal is to get the case settled. And so, use us as the mediator. The attorneys should use us to help with your own clients.
Moderator (00:23:24): All right, we’ll leave it there. Judge Holtz, Stacy, Phil, thank you so much for being on the podcast.
Stacy La Scala (00:23:30): Thank you. Glad to be here.
Judge Holtz (00:23:31): Thank you.
Philip Bruner (00:23:31): Thank you.
Moderator (00:23:35): You’ve been listening to a podcast from JAMS, the premier provider of alternative dispute resolution. Our guests have been Judge Nancy Holtz, Stacy La Scala and Philip Bruner of JAMS. For more information about JAMS, please visit www.jamsadr.com. Thank you for listening to this podcast from JAMS.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net.