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Litigation-I Win, You Lose vs. Mediation-Win/Win

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  Litigation is a zero-sum game.  It destroys relationships and fosters enmity between the parties.  Parties rarely walk away happy.  Even if they win, the expense of litigation is enormous, and collecting on judgments is difficult. Disputes ultimately resolve, but the focus on winning at any cost can lead to prolonged legal battles.  Living with a lawsuit causes ongoing stress, which can distract you from your business and even have an effect on your health. In a courtroom, the final decision lies with a judge or jury who may not fully grasp the complexities of the case. Parties relinquish control over the outcome, potentially leaving them dissatisfied with the final judgment. Mediation has the opposite effect.   Rather than polarizing people, it enables the parties to attack the issues and not each other.     The process promotes open communication, collaboration and problem-solving, which enables parties to actively participate in crafting mutually beneficial solutions.   It res
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Arbitration v. Litigation-Which one is more efficient?

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Last week I arbitrated a case over Zoom.  The hearing lasted one hour.  The Claimant, a construction company, was owed high five figures.  They did not have an attorney’s fee clause in their contract. The Respondent never answered the arbitration demand and did not appear. The Claimant presented his damages and told me the history of the project.   I awarded him the full value of his claim plus interest and costs because they were provided for in his contract. What if this had gone to litigation?   He would have filed a lawsuit and paid for service on the defendant.   He would have had to wait twenty days for him to file an answer. He would have to file a request for default. He would have to file a motion for default judgment. Even if the claim were for a “sum certain,” the court would probably require a hearing on damages. He will have to appear at the hearing and testify as to his damages.   If the court is busy that day, he may have to wait around for hours. He
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How to Calculate Construction Defect Damages

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How to Calculate Construction Defect Damages As an arbitrator, mediator and advocate, I am often surprised by claimant’s calculation of their damages in construction matters.   They come to hearings seeking wildly inflated damages or simply do not calculate their damages properly.   I cannot tell you how many times I have heard plaintiffs ask for all their money back, request lost wages or feel they are entitled to pain and suffering for the inconvenience they have experienced when a project does not go well.   This leads to inflated damage claims, which can hinder settlement and benefit only the lawyers. To avoid such outcomes, it is crucial to understand how to calculate damages correctly. Image courtesy of sscreations at FreeDigitalPhotos.net In most cases, Owner’s claims or for defective work. To support their claim, Owners must either hire an expert to evaluate the job or obtain subsequent quotes from at least two sources for repairs and completion. Both methods can serve as a
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Why You Should Arbitrate Your Construction Dispute

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Many of my colleagues are dissatisfied with arbitration due to its virtually unappealable nature in Massachusetts. The bases for appeal are extremely limited and include only bias on the part of the arbitrator, fraud, and other difficult-to-prove allegations. Moreover, there is no concept of "manifest disregard of the law," which means that the arbitrator can fail to apply the law correctly. Despite this, the reality is that most cases settle, and of those that go to trial, only a small percentage are appealed. For example, in Massachusetts last year, out of 52,299 civil matters filed, there were only 435 appeals, representing less than 1% of the total civil matters filed. Construction law is a specialized area, and it is crucial for a judge or arbitrator to have experience in the subject matter of a dispute. The course of conduct in construction projects is often relevant, making experience in the field important. Therefore, the lack of a right of appeal should not discour
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TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2023

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  TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2023   As I think about developments in construction in the last year, I would say that construction seems to have become more stressful.   Rising prices due to fallout from COVID-19 and inflation make money a more difficult subject.   Consumers are monitoring expenditures closely and contractors are having to account for price increases.   Trust between the parties is more important than ever.   Communication is paramount and transparency is key.   At the end of the day, running your business in a professional fashion is more important than ever.   My New Year’s Resolutions for 2023: 1.      Be An Educator       Many people have never done home improvement projects before.   You have to teach them what to expect.   For example, I have seen many situations where homeowners want to bring in their own subcontractors or buy their own supplies.   You need to explain to them that you have your own subcontractors who you work with regularl
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To Arbitrate or Not? That is the Question.

  There are lawyers who will not include arbitration clauses in their contracts and they avoid arbitration at all costs.   I have spent the last 33 years litigating disputes and it is my opinion that arbitration is preferable in most cases; especially in construction disputes. In arbitration, the parties submit their dispute to a third-party neutral who serves as a private judge who then rules on the case.  The arbitrator holds a hearing that is similar to a court proceeding, but the rules of evidence do not apply and the proceeding is private.  The arbitrator’s award is usually binding and non-appealable.   The advantages of arbitration are numerous: 1.       The parties choose the arbitrator.   Construction is an area where subject matter knowledge is important.   You want an arbitrator who understands the course of conduct in construction projects.   Many judges in the courts are not familiar with the nuances of mechanic’s liens, local construction laws, delay and construction
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Is Your Construction Arbitrator Biased?

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  The first thing clients ask me when we start choosing an arbitrator is: “What is the arbitrator’s reputation?   What is the arbitrator’s background?”   In other words, “Is the arbitrator biased?” Honestly, in my thirty-four years of experience, I can’t say that I have ever encountered an arbitrator who was biased in favor of builders, owners, subcontractors or suppliers.   Most try to be fair and apply the law.   However, we still try to “game” the system by considering the arbitrator’s background and whether it may unconsciously cause him/her to lean in a specific direction.    Even if that’s the case, it is the arbitrator’s ethical duty to draft an award that is based on the facts and the law. One’s background does influence perception.   We try to remain neutral, but if an arbitrator’s experience is mainly in representing developers, it may be difficult to understand the general contractor’s point of view.   Can your arbitrator set aside past experience and judge the matter fa
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TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2022

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TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2022   Can you say COVID fatigue?   As I sit here to write this year’s resolutions, I can’t believe that coronavirus is still very much with us.   In fact, you can just read my newsletter from last year, and all of them are still relevant. The difference this year is how divided we have become.   Some are living life as it is more or less normal, and others are still playing it safe.   One thing is certain.   The virus has disrupted construction and the way you do business.   On the positive front, I keep hearing that business has never been better.   On the negative side, there are still issues with increases in the cost of materials, shipping delays and unavailability of subcontractors.   Last year I wrote a number of blog posts with clauses to add to your contracts and refined them as new developments occurred. See, http://buildingconfidence-llc.blogspot.com/2020/04/coronavirus-and-construction-clauses.html   Those clauses still hold.  
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TEN NEW YEAR’S RESOLUTIONS FOR CONTRACTORS-2021

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   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
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When You Shouldn’t Mediate Your Construction Dispute

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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 ever
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What if the Debate Were Moderated by a Trained Arbitrator/Mediator?

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  I am guessing like the rest of you, I am still reeling from last night’s presidential debate.    I was so tense during the whole thing that I felt as if I had been through a horrifying experience. How could that have happened?  Trump came in like a bulldozer and just kept stepping on the gas.  Sadly, Biden did not seem to know how to deal with this attack.  As Dana Bash on CNN stated, “It was a shit show!” I couldn’t help imagining how I, with my arbitration/mediation skills, could have moderated the debate, which may have resulted in a very different outcome. State the Rules and Control the Process. In every mediation and arbitration, I remind the parties that it is my job to control the process.  They provide the evidence and information, but when it comes to procedure, I am the boss. So, knowing Trump’s track record, I would have sternly reminded the parties of their prior agreement to the debate format. “You will each have two  uninterrupted  minutes to respond to the questions.”
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