Benefits of Mediation in Construction Disputes

Benefits of Mediation in Construction Disputes

Mediation is an excellent alternative dispute resolution (ADR) choice for construction disputes. While most forms of ADR are often preferred over court proceedings for litigation, when it comes to construction contracts, mediation can prove most beneficial, especially when there are international conflicts involved.

What is mediation?

Mediation is an alternative dispute resolution method whereby parties in conflict engage the services of a mediator to facilitate a settlement between them. The mediator is a neutral, independent third party trained in mediation and is dedicated to ensuring a smooth discussion between those involved in the dispute. When opting for mediation, parties can also seek and appoint a mediator who has experience in the construction industry to help discussions better than someone unfamiliar with the issues at hand. The mediator, including those involved in international mediation, does not have the authority to bind parties to a result legally. However, since the parties usually have vested interests in resolving their issues amicably, the non-adversarial forum of mediation is conducive to reaching a settlement. Also, the disputing parties have complete control over the proceedings from scheduling down to the terms of any settlement, ensuring that everyone’s best interests are taken into consideration.

How does mediation work for construction disputes?

Regarding construction disputes, this form of dispute resolution is ideal. By reaching a satisfying arrangement through mediation, construction projects that may have halted due to a dispute can continue without extended delays. Furthermore, a fruitful mediation can also preserve working relationships between the parties so that they may be able to pursue future projects together. On the other hand, while mediation puts the control in the hands of the parties in dispute, under the watchful eye of an experienced mediator, litigation and arbitration demand that they authorize the court (in litigation) or the arbitrator (in arbitration) to decide the outcome, which may not be to the best interest of the parties or the project in question.

Another issue that can be complicated when in litigation or arbitration is the many parties to a construction project or contract. Some of the issues that may need addressing during (or even before or after) a project include but are not limited to:

• Defective work or plans
• Delays that would affect project schedule or completion
• Property damage
• Failure to meet specifications or obligations
• Payment, supply, or manpower issues
• Breach or termination of contracts or subcontracts

Any or all these could involve contractors, sub-contract, architects, engineers, or other involved parties. The strict structures of litigation and arbitration could add a layer of unnecessary complication to a dispute, causing further delays and substantial costs. Construction projects are complicated and layered enough without having to add an adversarial component in litigation. Mediation offers all parties a seat at the table for an open discussion that is facilitated by a skilled mediator who can also be a construction sector expert.

What are some of the specific benefits of construction mediation?

The previous section discussed general, overall benefits for settling construction industry disputes through mediation. Here are a few more specific advantages to mediation in construction disputes:

• Neutral expertise – as mentioned before, mediation allows participants to select an independent third party who can steer discussions towards a mutually agreed resolution. Unlike litigation in court, which is overseen by a judge who is an expert in the law, mediators can be subject matter experts as well as skilled mediators. This can help focus conversations and negotiations during mediation.
• Scheduling flexibility – litigants must abide by court rules and schedules with little to no room for flexibility. With mediation, parties are in full control to expedite proceedings by arranging times that suit all those involved. This means that disputes can be settled in much less time than if they had to wait for court proceedings.
• Affordability – With the time savings mentioned, disputants can also save money when choosing mediation. They do not have to pay court costs or expensive lawyer fees. Furthermore, mediation costs at most dispute resolution centers are much more affordable than litigation. Also, since the disputing parties as well as the mediators are experts or experienced in the matters in question, they can save on costly additional expert testimony or reports to explain issues to judges or juries.
• Non-adversarial – Since mediation is ostensibly an in-depth discussion between parties in conflict, and since the mediator is there as a facilitator without decision-making authority, the parties can enter mediation with a better sense of goodwill towards each other. This can help safeguard existing relationships while coming to a satisfactory resolution.
• Amenable to multi-party disputes – Litigation, as an adversarial approach, tends to be an us versus them situation. As mentioned before, there can often be more than two parties involved. Mediation does not have a plaintiff/defendant paradigm so that every party has relatively equal standing in the proceedings.
• Complete control – This is another benefit that bears repeating. Mediation provides involved parties with greater control over proceedings. They can dictate almost every aspect, from scheduling to appointing mediators to drafting settlements.
• Privacy and confidentiality – Like other ADR methods, and very unlike court litigation, mediation affords all parties confidentiality. Proceedings are private so that nothing discussed no evidence presented can be disclosed without explicit consent from all parties involved

THAC provides full mediation services

Thailand Arbitration Center (THAC) is a world-class dispute resolution center that provides complete services for mediation and other forms of alternative dispute resolution. With a convenient location near the BTS Skytrain and significant roads, parties can access THAC facilities from all points, including major international airports. Such state-of-the-art facilities include fully equipped meeting rooms and video conferencing capabilities, allowing in-person and remote hearings. In addition, THAC offers parties access to myriad mediators, all skilled to international standards of ADR and experts on various subject matters. Moreover, the majority of cases are related to construction disputes. For more information about our ADR and ODR services for personal and business disputes, contact THAC at [email protected] or +66 (0)2018 1615.