As I sit down to write my annual list of resolutions for contractors, I am amazed at how much things changed in 2020. Construction was going well and then, in March 2020, COVID-19 hit. At first, we thought it was going to be a disaster for the construction industry. States, cities and towns shut down projects and many applied for PPP loans. Then, something amazing happened. Construction was considered an essential service and everyone was back to work.  That said, the work world changed: companies were donating their PPE to frontline workers, COVID-19 protocols had to be followed and paperwork had to be filed. Everyone was scrambling to figure out how to comply and keep their businesses going. So, you may or may not ask, what was I, as a construction lawyer doing? I spent March and April thinking about the new risks contractors/construction companies were facing and developing contract clauses to protect the industry. I wrote a number of blog posts with clauses to add to your contra

When You Shouldn’t Mediate Your Construction Dispute

Photo by Cytonn Photography on Unsplash

Mediation is a wonderful form of dispute resolution.  It allows the parties to craft their own resolution to a conflict.  It frequently repairs relationships.  Parties tend to comply more with mediated settlements.   That said, there are definitely times when you should not mediate.

As a refresher, mediation is an alternative form of dispute resolution where the parties attempt to negotiate a settlement of their dispute with the aid of a third-party, neutral mediator.  It is a confidential process.  If the parties come to an agreement, that agreement becomes an enforceable contract.  Since parties have control over whether they come to an agreement, they are much more likely to comply with a mediated settlement than a judgment.

So, when not to mediate?

When the other side refuses.

Mediation is supposed to be a voluntary process.  The parties are supposed to attend a mediation session in good faith.  There is no point in wasting everyone’s time by attending a mediation session and refusing any sort of compromise or not being willing to listen.  If the other side won’t play, don’t bother.

If the law and the facts are on your side.

As a lawyer I can tell you that I have rarely been involved in a dispute where the situation was absolutely black and white, but it can happen.  If you are absolutely going to win, why mediate?

If there is a power imbalance.

Parties really can’t mediate if one side has most of the power.  If you don’t have any leverage in a situation, there may be no point in mediating.  It may be cheaper to just try to settle or have your lawyer negotiate for you.

If the relationship has been abusive.

This is really a variation of a power imbalance, but worse.  If there has been abuse by one party against another, then it would not only be inadvisable to mediate, it could be dangerous.  The abused individual may make decisions that are against his or her best interest.  If the person is not represented by counsel, it would be dangerous to even be in the same room as the abuser.

When it isn’t cost effective.

Most disputes come down to money.  I cynically tell my litigation clients that it is their job to persuade the mediator to advocate for their position.  As a preliminary matter, mediators need to determine who is writing a check to whom; then, it’s a matter of how much.  If you believe money should be coming your way, but you don’t think a mediator would see it that way, then don’t bother.  Mediation typically saves money because the parties come to an agreement and litigation ends.  That said, spending eight hours mediating and not coming to an agreement just costs the parties money.  During the mediation you may find out some valuable information, but at the end of the day, it has to be worth it.

The timing isn’t right.

Sometimes parties rush into mediation before they have exchanged any information or have evaluated the strengths and weaknesses of their position.  At times, the parties’ contract requires mediation, but no one is really ready.  In that scenario, it is better to waive mediation and pursue it at a later date when the process has more of a chance of being successful.

Although I firmly believe that mediation is a wonderful thing, that doesn’t mean it is suitable for every dispute.  For a mediation to be successful, it has to be done when the time is right, when the parties are read to participate in good faith and when everyone is motivated to do the work to discuss the issues and possible solutions.  If you are ready to mediate your dispute, give me a call at 617-953-3760, or email me at agoldman@goldmanlg.com.


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