Richard Erickson | Snell & Wilmer
As a mediator helping to settle construction disputes and as an arbitrator deciding outcomes of these disputes, I found certain lessons to be especially helpful after graduating last summer from the Executive Education program at Harvard Kennedy School (HKS). The exceptional HKS curriculum included courses focused on negotiation strategies for multiparty disputes, decisive leadership during crisis, and human behavior affecting dispute resolution.
In particular, our HKS class debated the impact of cognitive bias in dispute resolution, and we studied a central theme that decision-making is universally scientific. That is, parties making decisions in dispute resolution exhibit and rely upon empirical factors that good mediators and decision makers should appreciate and understand. Bias, for example, can cause key players to discount persuasive witnesses, admissible evidence, and reliable expert opinions that influence the outcome of a construction dispute. Biased decision makers may also choose to withhold key information from the mediator, as though doing so will help rather than hurt what is supposed to be an objective and diplomatic process.
In the heat of dispute resolution, biases may also hinder sound decision-making before, during, and after mediation of the dispute. Mediators must recognize the risk of “bad cues,” such as personal feelings of incidental anger, and then refocus decision makers on both favorable and unfavorable facts, mitigating information, and undisputed issues. Replacing a decision maker’s anger or bias with a simple acknowledgment of the risk of losing the dispute may be all it takes to identify meaningful opportunities to compromise and settle.
The point is not merely to recognize obvious factors impacting the negotiations but to understand how they inevitably affect mediation and how those same factors will contribute to the outcome if mediation fails. Construction disputes often involve millions of dollars in claims and years of stubborn discontent between parties that become exhausted by the contest and fees and costs required to seize any advantage. Dispute resolution often costs far more than the value of the parties’ claims, and this dilemma often causes parties to mediate with highly unreasonable expectations. Human behavior tends to be at its worst under these extreme circumstances. Some scholars even suggest that psychiatrists would make better mediators than lawyers.
To be sure, the best construction mediators have a strong grasp of every factor shaping the dispute — psychological, scientific, and legal. Party representatives in construction mediation often — sometimes unwittingly, allow their biases to dictate uncompromising terms, as though refusing to compromise early will ultimately force more acceptable terms of compromise later. A good mediator should be prepared to break down these barriers before mediation begins. The mediator also needs to earn the decision maker’s trust by demonstrating an understanding of the parties’ biases and by persuading leaders to leave those biases out of the negotiations.
Surveys conclude that mediation succeeds most of the time. Nonetheless, mediation has the best chance of success when decision-makers are willing to acknowledge their biases but agree that they should not bring those biases to the mediation.
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 888.684.8305, or email experts@adviseandconsult.net.