Compromising a construction and engineering dispute through mediation

Niall Lawless

Chartered Arbitrator and Engineer, Adjudicator, Mediator

Mediation works best when there is balance and harmony between people and the participants’ trust in the process.

Mediation process is confidential, private and structured. It has five stages: Introduction, Information Exchange, Option Generation, Negotiation, and Conclusion. Information Exchange and Option Generation are by far the most important. Mediation is not adversarial and works best where the parties are willing to cooperate together to solve a shared problem, and because nothing is agreed until everything is agreed in writing, it allows the parties to take risks when they come to deal with individual items.

Mediation people includes the parties, their lawyers or representatives, and the mediator(s).

Commercial mediation begins with the parties agreeing to mediate, and usually ends with the parties compromising their dispute. The parties are the stars; most often they are common sense business people motivated by revenue and contribution, and the desire to continue their future cooperation.

The parties’ lawyers can make or break the mediation. Good mediation lawyers can move seamlessly to advisor from advocate. In their role as advocate they will succinctly summarise legal arguments, but not in an adversarial or combative way, gifting litigation risk to the mediator. They allow the business principal to take the lead, preparing their clients offering advice, guidance and information on negotiation and mediation. Good mediation lawyers cope well with being challenged privately by the mediator, they are experienced and wise, and they are committed to find the best possible solutions for their client.

During the mediation a neutral third party, the mediator, assists disputing parties’ compromise their dispute using communication and negotiation skills. Essential parts of the role of mediator are to be the guardian of the mediation process, to facilitate the exchange of information, to help the parties reality check their position, and to leave no value on the table. The mediator should be adept using the phone, as it will be essential in early engagement relationship building, and promptly discussing and agreeing the manner in which the mediation shall be conducted. The mediator should be comfortable dealing with feelings, where there is a fractured relationship, the mediation may have considerable emotional content. As mediator I always commit to follow the European Code of Conduct for Mediators which sets out a number of principles to which individual mediators may voluntarily decide to commit themselves. In particular to commit to conduct the proceedings in an appropriate manner, taking into account the circumstances of the case. This might mean adopting an evaluative or facilitative mediation model, and other apt intervention.

I believe that where construction and engineering disputes revolve around matters of fact, the evaluative mediation model often works best, and it is construction and engineering professionals with practical hands-on experience and knowledge who are best placed to fulfil the mediator role.

Recently I was appointed by the International Centre for ADR (“Centre”) of the International Chamber of Commerce (“ICC”) as a mediator in a multi-million US $ engineering dispute, which resulted in a settlement. Culturally different, the parties asked the ICC Centre to appoint an engineer mediator, with cross border mediation experience, and with particular construction, commissioning, and operation expertise. The mediation agreement required that where the parties failed to conclude an agreement within the time allowed, the mediator would issue a non-binding proposed solution to the dispute. One of the important factors that helped the parties move from entrenched positions was a robust application of the evaluative mediation model. For more information click here.

Contributor: Niall is Chair of the CIC Adjudicator Nominating Body Management Board. He is a Chartered Arbitrator, Building Services Engineer, Mechanical Engineer, Information Systems Engineer and Chartered Builder. He provides arbitration, adjudication and mediation services in commercial technology, engineering and construction disputes. https://www.linkedin.com/in/adjudicator