Philip Bruner, Nancy Holtz and Stacy LaScala | JAMS
Construction disputes can involve extensive records and technical questions, often with multiple parties and significant financial exposure. But whether a mediation is productive may depend just as much on preparation. The right people need to be involved, and the parties should have the information necessary to meaningfully discuss resolution before the session begins.
In a recent episode of “The Mediation Table: Conversations in Conflict Resolution,” JAMS neutrals Hon. Nancy Holtz (Ret.); Stacy La Scala, Esq.; and Philip Bruner, Esq., discussed how those conditions can be developed well before mediation day.
Their discussion points to a broader lesson: Much of the work that determines whether a mediation will be productive happens before the parties enter the room.
Start by Identifying What Could Prevent Settlement
Pre-mediation conversations can reveal problems that may never surface in an exchanged brief. There may be missing information or unrealistic expectations. In other cases, the real complication is figuring out who has authority to approve a settlement.
As Mr. La Scala explained, “I believe one of the most important pieces of the puzzle is to have a pre-session call,” adding that the conversation can help “identify any impediments that might be presenting themselves to the mediation session itself.”
For Mr. Bruner, preparation also means identifying what the parties are actually asking the mediator to help resolve.
“It’s critical, I think, to get a good feeling for just what it is the parties really expect to mediate,” he said.
In a construction matter, the disagreement may center on payment or delay. It may also turn on competing accounts of what happened at the project site or disagreement over how a particular event affected damages. Identifying what is truly driving the dispute can help focus the mediation on the issues that matter most.
Judge Holtz similarly emphasized looking beyond stated positions: “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?”
Understand What Is Really Driving the Dispute
Effective preparation requires understanding what is actually driving the dispute. Construction matters may appear primarily technical or financial, but the relationships behind them can carry their own weight.
“Many of our disputes are based upon a violation of trust,”
Mr. La Scala said. “That sometimes is the more important issue than the money.”
That can be significant when project participants have worked together for years or expect to do so again. A monetary claim may be intertwined with concerns about credibility, damaged relationships or how a particular decision was made.
Judge Holtz noted that mediators also need to understand “who are the big personalities in the room” and the history among the parties. Those dynamics may influence both who should participate and what could stand in the way of resolution.
Identify Who Needs to Be Involved
Successful preparation also means understanding who can provide critical information and who ultimately has authority to settle. In a large construction case, the person attending the mediation may not have final decision-making authority. Approval could need to move through company leadership or reach decision-makers located elsewhere.
Identifying that structure before mediation helps the mediator and counsel understand what decisions can realistically be made during the session and what additional steps may be required.
Use the Mediation Process as a Tool Rather Than a Formula
Preparation also gives the mediator and counsel an opportunity to decide how information should be exchanged and when bringing parties together could be useful.
Judge Holtz cautioned against treating joint sessions as a required opening ritual, describing the joint session instead as “a dynamic tool” that can be used “throughout the day.”
The right format may change as the mediation progresses. At one point, bringing everyone together may be productive. At another, a discussion among principals or experts may be more useful. In larger construction matters, Mr. La Scala described using expert exchanges or presentations before mediation so the parties can clarify where their experts agree and where the real disagreements remain before negotiations turn to money.
That flexibility is especially important when the underlying facts are difficult to untangle. Mr. Bruner pointed to delay disputes as one example, where competing views of the critical path or concurrent delay can significantly affect how the parties evaluate responsibility.
“It’s going into the factual complexities of the case, because typically that’s where a lot of the dispute lies,”
he said. “And a lot of what we do in mediation is help people kind of work through some of those things.”
Prepare Clients for Resolution Instead of a Trial
Preparation should also include setting expectations with the client about what mediation requires. Even a well-structured process can stall if participants arrive prepared to litigate their positions rather than explore resolution.
“Mediation is not a battle to be won,” Judge Holtz said. Parties need to arrive prepared for “a give-and-take,” rather than focusing only on how much they hope to obtain.
Mr. Bruner likewise emphasized candor with the mediator: “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.”
That may require counsel to discuss weaknesses in the case as openly as strengths. The mediator may also need a realistic understanding of the client’s expectations and anything that could make settlement difficult. Without that information, it becomes harder to help the parties evaluate the dispute realistically.
Mr. La Scala described part of the mediator’s role as helping participants move out of a purely adversarial mindset and “into a collaborative effort in order to get the matter resolved.”
The timing of that work matters. His warning about missing information is direct: “If you wait until the day of the session to identify those, your session’s done.”
From Advocacy to Problem-Solving
Productive construction mediation begins before the parties sit down to exchange numbers. Counsel and the mediator need to understand what could prevent settlement and whether everyone necessary to make meaningful progress will be involved. The parties also need enough information to evaluate the dispute with a realistic view of what mediation is designed to accomplish.
Judge Holtz summarized that shift by encouraging counsel to
“put down the gladiator’s sword and take up the diplomatic credentials.”
That does not mean disregarding the merits. Rather, mediation creates an opportunity to examine them differently. Parties can assess where their positions are strong, confront areas of risk and determine whether there is a resolution they can accept.
For the full discussion of these construction mediation strategies and the role preparation can play in the process, listen to the JAMS podcast episode, “Construction Mediation Best Practices for Productive Resolution,” part of “The Mediation Table: Conversations in Conflict Resolution.”
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.