Cost-Efficient and Quick Construction Dispute Resolution in Chicago
Mediation is an effective way to resolve design and construction disputes. It allows parties to establish a formal process to explore the possibility of settling their dispute, helped by a neutral third party, when informal negotiations have failed. In Chicago mediation, a neutral facilitator, often a retired judge or highly experienced construction attorney, helps the disputing parties determine if an early settlement of the construction dispute is in their best interests.
Can Mediation Help Resolve Design and Construction Disputes?
A Non-Binding Dispute Resolution Method
Mediation is ‘non-binding’ and ‘voluntary.’ Mediators lack the power to pick a winner or loser, or to force parties to settle. Any party can abandon the process at any time they deem strategic. Participating in non-binding mediation does not prevent the parties who choose not to settle from going ahead with ‘binding’ dispute resolution processes – like arbitration and litigation – where arbitrators or judges will indeed determine who wins and loses.
The Importance of Information Exchange
Information exchange is the key to resolving disputes. Often, when someone says they are not ready to settle a dispute, they really mean that they lack enough information to assess whether a settlement is in their best interests. Mediation allows parties to exchange information quickly and inexpensively. Arbitration and litigation are more formal processes, and less efficient means of information exchange. It can take months or years to learn through these ‘binding’ processes what you can learn in a single day of ‘non-binding’ mediation.
Dispelling Construction Mediation Myths
Mediation is misunderstood. Many lawyers think they understand it, but offer misguided reasons not to mediate: “suggesting mediation is a sign of weakness” or “the other side is unreasonable, so it is a waste of time” or “we must leave no stone unturned in discovery before mediation.” We disagree. A good mediation – where the parties work together in an earnest and good faith effort to overcome impasse, guided by a mediator who understands the human psychology of disputes and why people adopt positions and resist change – can spare the parties years of expense and inconvenience in court or arbitration.
Through speaking and writing, Jeremy has tried to dispel some of these design and construction mediation myths:
- Chapter 19 – Nonbinding Alternatives to Court Litigation for Resolving Construction Disputes, Construction Dispute Litigation 2018 Edition, IICLE (Mar. 2018)
- How Guided Choice Mediation Achieves Earlier Construction Settlements, Construction Law Letter, Vol. 34, no. 3 (Feb. 2018)
- Chapter 13 – Alternative Dispute Resolution Terms in Construction Contracts, Construction Law: Transactional Considerations 2017 Edition, IICLE (2017)
- Negotiating Dispute Resolution Clauses, Five Keys for Negotiating Business Contracts, IICLE Webinar (Mar. 21, 2014)
- Chapter 54 – Ethics and Mediation: Managing Conflicts of Interest, AAA Handbook on Mediation, 2nd Edition, Juris Publishing, Inc. (Jun. 2010)
- Is It Worth Pursuing Your Construction Claim? Journal of Construction Accounting and Taxation, vol. 19, no. 4 (Jul. 2009)
How Does Design and Construction Dispute Mediation Work?
Mediation is a ‘non-binding’ and ‘voluntary’ form of dispute resolution for design and construction claims. In mediation, the mediator – a neutral facilitator, who is often a retired judge or highly experienced construction attorney – helps the disputing parties, perhaps a property owner and contractor, determine if an early settlement of the dispute is in their best interests.
Mediators lack the power to pick a winner or loser, or to force parties to settle. Any party can abandon the process at any time they deem strategic. Participating in non-binding mediation does not prevent the parties who choose not to settle from going ahead with ‘binding’ dispute resolution processes – like arbitration and litigation – where arbitrators or judges will determine who wins and loses.
A good mediation – where the parties work together in an earnest and good faith effort to overcome impasse, guided by a mediator who understands the human psychology of disputes and why people adopt positions and resist change – can spare the parties years of expense and inconvenience in court or arbitration.
What are the Advantages of Mediation?
The biggest advantage of mediation is that all sides to the dispute can agree on a resolution that judges or arbitrators are not empowered to order. You can settle your dispute on your own terms, with a neutral third party helping you see all sides of the situation and the pros and cons of each possible outcome.
Other advantages include:
- Flexible and informal approach: there are no formal rules of evidence or witness testimonies.
- Confidential proceedings: Mediation results are not public record.
- Preservation of business relationships: Mediation aims at a win-win outcome that can preserve the relationship moving forward, especially when amicable and effective tools like Guided Choice are used.
- Quick and cost-effective resolution: Mediation generally allows for a faster solution than arbitration or litigation.
Will Mediation Result in a Binding Agreement?
Under the Uniform Mediation Act, the mediator controls the process, but they do not have the authority to issue and enforce a binding agreement. The parties are the ones who control the outcome. You are under no obligation to agree to a settlement and can end the process at any time.
Can You Switch From Litigation to Mediation in a Design and Construction Dispute?
Yes. Mediation can be started at any time, even after a claim has been filed and a court date set. The parties and their attorneys can advise the judge that they want to try resolving the dispute through mediation instead. In most instances, the court will grant the request if it’s clear that all sides are entering the process voluntarily. If mediation is unsuccessful, and no agreement is reached, the parties are free to take the case to arbitration or trial.
Jeremy is a big proponent of well-designed dispute resolution procedures. He understands that court mediation services are inherently flexible and customizable.
Thanks to great mentors, Jeremy knows the importance of hiring world-class mediators early in the dispute – before his clients suffer business disruption, the loss of hard-earned relationships, and the high cost of litigation or arbitration. He knows how to select mediators who can gain the parties’ trust; investigate why disputes have not settled; encourage collaborative and reasonable information exchange; anticipate impasse; and design a process to overcome the obstacles to settlement.
For more information on how to use mediation to resolve your design and construction disputes quickly and cost-effectively, contact us.
A good mediation – where the parties work together in an earnest and good faith effort to overcome impasse, guided by a mediator who understands the human psychology of disputes and why people adopt positions and resist change – can spare the parties years of expense and inconvenience in court or arbitration.
