Jennifer Grippa | Miles Mediation & Arbitration
After 10 years of arbitrating and mediating hundreds of construction disputes, I have learned that no two cases are exactly the same. Projects change, parties change and issues can range from relatively straightforward payment disputes to extraordinarily complicated questions involving design, delay, defects, scheduling and damages.
Certain patterns show up again and again. Perhaps the biggest one is this: The obstacles to resolution are usually human, not technical.
Here are five lessons that can help you prepare for your next construction mediation.
1. Documentation matters, but credibility matters more.
Construction cases are built on records. There are contracts, change orders, schedules, daily reports, photographs, emails, texts, pay applications and countless other documents.
Good documentation does more than prove a claim. It creates credibility. When contemporaneous project records tell a consistent story, it becomes easier for everyone to realistically evaluate the case.
Poor documentation has the opposite effect. Missing records, inconsistent communications, unsigned change orders and decisions made without explanation create uncertainty. That makes settlement harder because it gives each side more room to believe its version of events will ultimately prevail. Replace uncertainty with credible information for a productive settlement discussion.
2. The technical issue isn’t always the real problem.
Construction disputes may involve complicated engineering, scheduling or damages questions. Those issues matter and experts can be important to helping parties understand them but the technical dispute is not always what is preventing resolution.
Sometimes the real obstacle is a communication breakdown that occurred months or even years earlier.
Sometimes one party believes they were treated unfairly or blamed for a problem they did not cause. Sometimes someone needs an explanation or wants to be heard. Sometimes business realities are driving the dispute as much as the merits are.
To resolve the dispute, it can be just as important to understand what is driving the conflict as it is to understand the merits of the case.
3. Preparation wins.
The best negotiators do not just advocate their case, they evaluate it realistically. That means taking an honest look at the strengths and weaknesses of the case, the likely range of outcomes, the cost of continuing the dispute and the practical consequences if a resolution is not reached.
Parties typically see a dispute through their own lens, and it can be difficult to realistically evaluate a risk you are convinced will never materialize. Understanding how you could lose, not just why you should win, is one of the human hurdles that can make settlement difficult.
Being prepared to settle also means having the right decision-makers present. You can’t successfully mediate a case if the parties there lack the authority to settle.
4. Relationships matter.
Construction is a surprisingly small world. Owners, contractors, subcontractors, designers, consultants, insurers and lawyers cross paths again and again.
That matters when trying to resolve a dispute. Sometimes the more crucial question is whether the parties can solve the immediate problem without destroying a business relationship that may have value long after the dispute is over.
In some cases, that relationship may be worth more than the dispute itself.
5. Flexibility creates opportunity.
Settlement may involve more than a number. Payment timing, extended warranties, future projects, revised contract terms, releases of retainage or liens, replacement work and other business arrangements can sometimes bridge a gap that money cannot.
Parties who have only one acceptable outcome in mind may miss solutions that may better serve their interests.
After mediating hundreds of cases, I have come to believe that successful negotiation is not really about declaring a winner. Mediation gives the parties the opportunity to decide for themselves how the dispute ends.
The best resolutions occur when parties understand their risks, recognize that the other side has its own realities and consider practical solutions that let everyone move forward.
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.