Why Use Construction Mediation | Corodemus & Corodemus, LLC

By: Nicholas J. Stroumtsos, JSC (ret.)

Construction Mediation / Arbitration has become the preferred process to resolve construction disputes because of the many advantages it offers over traditional litigation.

As a sitting judge of 22 years, I presided over complex litigation involving a wide range of construction issues. Coincidently, one of those cases dealt with the completion of a multimillion dollar project while the litigation was progressing through the discovery phase. It was a highly contested matter. Subsequent to my leaving the bench, the parties to that lawsuit agreed to select me, as a retired jurist, to mediate a resolution for the several parties to the law suit. This experience gave me a clear window to view and contrast both processes; the same facts, the same issues, the same parties but a different process. Mediation provided the avenue and the process to resolve the matter. To be sure there are cases which are well suited to courtroom litigation but these are the exception. In most instances, the decision to go to trial must come with the acknowledgement that the process will be longer, more intense, more costly and the outcome is at risk.

If you choose to go the route of traditional litigation, your first hurdle is likely to be getting all the parties to agree to a bench trial. If you are lucky enough to succeed in meeting this challenge you have improved the odds of concluding the litigation in a timely fashion. Now add the possibility that one of the parties may request a jury trial and you are suddenly faced with educating the jurors with the jargon and concepts of the construction industry, another factor which has significant ramifications and impact on outcome. When you face the court, an important point to remember is there is likely to be a learning curve for this type of dispute involving a totally new vocabulary, trade specific terms and concepts which must be understood by the fact finder. The concept of back charges and change orders can be an exercise of daunting mental gymnastics to one who faces these routine industry concepts for the first time in order to decide the quantum damages. A trial judge who has spent most of his or her time presiding over personal injury cases will be in unfamiliar territory when dealing with construction issues such as delay damages, surety issues or wrongful termination disputes. Construction disputes often involve several layers of defendants with cross claims or indemnification issues with which the judge may also be unfamiliar. This places an extra burden on the jurist and the parties which can add to the tension in such cases.

The alternative to traditional litigation is the streamlined process of mediation. One of the primary advantages of mediation or arbitration is that the parties to the law suit begin the process on positive footing by agreeing on their choice of a mediator. The parties are able to select, as a mediator, someone who has a knowledge base in this area of the law and a proven track record. The ability to choose a mediator who has the negotiation skills and an understanding of the special needs of your industry gives you a marked advantage for a successful outcome. Mediation has the added advantage of providing for the partnering of mediators when the litigation is complex and may require multiple areas of expertise. For example, a dispute may involve both patent infringement and construction issues. In such a matter, the ability to work with two mediators at the table who have expertise in these specific areas, is likely to result in a global resolution of your dispute. Additionally, the “cost to collect” dilemma which faces every contractor may also suggest mediation is the better avenue to resolve claims. Consider that your opponent may have in house counsel or simply have deep pockets enabling them to continue the litigation which would, in time, make the ultimate recovery of a legitimate claim pale in the face of what it would cost to recover.

There may be many nuances to a complex case which mediation can accommodate more readily than the setting of a traditional courtroom. A successful mediation can resolve the issues between the parties and bring closure to what frequently has become an agitated situation associated with the litigation. In the mediation process each party has the opportunity to “state their case” without being subjected to the rigors of cross examination or the limitations of the court room. Mediation provides the parties and the lawyers with a highly professional, respected and respectful but less formal forum in which to resolve and settle their differences. In the final analysis, mediation is less costly, time effective, results oriented approach that should be at the top of your list of considerations as the means to resolve complex construction litigation.

Why Use Construction Mediation / Arbitration

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