Although all industries and individuals have benefitted greatly from the availability of Alternative Dispute Resolution (ADR), perhaps no industry has benefited more than the construction industry. The reasons to use ADR are compelling.
For example, many issues are too technical for juries, trying cases is more costly and time consuming, the outcomes are more predictable, etc. This article addresses the processes and options that must be understood to fully realize the potential benefits of ADR.
First, what is ADR? In its simplest terms, ADR is the process of resolving disputes without going to court. Essentially, ADR is comprised of mediation, case evaluation and arbitration.
Mediation is the process whereby a mediator facilitates resolution of a dispute through settlement. A mediator typically will not tell the parties what the outcome should be. Rather, the mediator helps each party evaluate the strengths and weakness of the respective claims so the parties can reach a mutually agreeable resolution.
Two keys to successful mediation are selecting the right mediator and timing.
In terms of the selection process, it is imperative to select a mediator that not only has extensive subject-matter knowledge, but also has a personality that generates respect. Those skills create trust in the mediator, which is one of the greatest factors in reaching a settlement. For example, if the mediator cannot grasp key subject-matter concepts like the distinction between base contract and extra work, then the mediator’s trust is lost. On the other hand, a great subject-matter mediator who is caustic to the parties is equally unlikely to develop trust and, hence, an environment conducive to settlement.
As part of the mediator selection process, the parties should conduct their due diligence. This includes contacting attorneys who frequently mediate cases and asking the mediator for references. The mediator selection process is crucial and the parties need to approach it correctly to maximize their chances of successfully resolving their dispute.