Veritas Surveying Limited

Mediation
Some Definitions of Mediation
Definitions of mediation include the following:

a. The principled resolution of disagreements by a knowledgeable and neutral third party;

b. Helping people have a difficult conversation;

c. An informal dispute settlement process run by a trained third party, called a mediator;

d. In the Law.com Dictionary, it is defined as:

‘Mediation

n. the attempt to settle a legal dispute through active participation of a third party (mediator) who works to find points of agreement and make those in conflict agree on a fair result.’

All the above certainly cover aspects of mediation but a fuller definition offered here is:

‘Mediation is a voluntary, non-binding, confidential, informal and flexible form of dispute resolution in which a neutral person (the mediator) helps the parties reach an agreed settlement.’

This definition appears to encapsulate the key ingredients of mediation and will thus be used as the basis to explain these aspects further.



Mediation is Voluntary
No-one can be forced to mediate. In that sense, it is voluntary. The parties are also free to walk away at any time during the mediation itself. They can reveal as much or as little as they choose. They are not on oath or affirmation nor will they be subjected to cross-examination.

However, some could argue that because of the pressures exerted by the government and courts in the UK to mediate, mediation can no longer be said to be truly voluntary.



Mediation is Non-binding
Mediation is non-binding until an agreement is reached which may then, if so desired by the parties, be turned into an enforceable contract. Entering into mediation does not prevent the parties from walking away from it at any point. They are not bound to settle.

Mediation is Confidential

This is one of the key strengths of mediation. It is one of its central principles and one of the reasons why many people choose mediation over other methods of dispute resolution. Mediation is not recorded and is conducted in private, away from public view. Many in a dispute want to avoid the damage that publicity can cause.

It is normal for the mediator to require all the parties (including the mediator) to sign a mediation agreement covering confidentiality before the start of mediation, stating that any information disclosed or developed during the mediation process will not be disclosed in any future proceedings. The process is a without-prejudice negotiation on a strictly confidential basis. Thus, mediation allows the parties a unique opportunity to freely and openly communicate with one another with minimal risk and without worrying that what they say will be ‘held against them’. When people are able to be more open and honest, they tend to be less positional and their underlying interests are more readily apparent.

However, there are some specific types of cases when the mediator needs to add a caveat to confidentiality. For example, it might be that a mediator will state that everything is kept confidential. However, if they have really serious concerns about the safety, say, of a child, then they will not be able to keep that confidential and will be morally obliged to disclose the information to an appropriate authority. Moreover, it may be possible that national jurisdictions or professional codes of conduct impose specific caveats with regards to illegal activities or possible ordre publique (public policy) danger.

With the exception of any caveat, the mediator must ensure they keep confidentiality throughout and following the mediation. They must also not disclose any information that has been given to them prior to the mediation meeting. A further level of confidentiality is that they do not disclose in joint session anything told to them in the individual, separate (caucus) meetings with each side, unless express permission has been sought and given. No recording of the mediation should be made and any notes made by the mediator should be destroyed at the end of the mediation.

Nothing said in mediation can be used in any subsequent legal process. The only information that is released is that a mediation took place, when and between whom, and whether it was successful or not. There has been some debate regarding whether a mediator can be called to give evidence of what took place during a mediation following the case of Farm Assist Ltd (in liquidation) v The Secretary of State for the Environment, Food and Rural Affairs (No 2), 2009. However, the basic principle remains largely unchanged; which is that a mediator cannot be called as a witness.

In commercial mediations, the settlement agreements will become legally binding when the terms of the agreement are committed to writing and signed by the parties that have the authority to settle.



Mediation is Informal
There is no requirement to produce specific information to the mediator before the mediation starts. This

What is a construction dispute resolution?
The aim of any construction project is for the project to run as smooth and effectively as possible in order for it to be completed on time and within budget. As it common for risks to be high on construction projects and margins or profits low, parties often adopt an adversarial approach when issues are discovered and the construction dispute is born.



A simple example of a potential construction dispute could include a request for additional works, for example, a main contractor may request additional works or additional works may be required simply to complete the project, perhaps as a result of items which have been discovered on site but not foreseen by one or both of the parties when entering into contract.



That may result in works taking longer than anticipated which, in turn, will generally result in an increased cost to the project. This will often lead to a claim by one of the parties – if it cannot be resolved through discussions.



Common types of claims arising in construction projects include:

Claims for payment or non-payment
Smash and Grab claims
Disputes over the value of variations
Extension of Time Claims (Time)
Loss and Expense Claims (Money)
Claims for liquidated damages
Claims over quality and or defects
There are several ways to resolve disputes, historically construction disputes were resolved by Arbitration or Litigation, however those systems were formal, required lengthy submissions by each party, full disclosure of documents, witness statements, expert reports and a hearing. The result of such a formal process resulted in a costly and slow process of resolving disputes.



In the late 90’s and earlier 00’s the construction industry witnessed a massive growth in mediation and adjudication of construction disputes within the UK.



The reason why those methods were so successful was due to:

speed - court lists had become extremely long often taking in excess of two years to get a matter before a Judge.
lower costs – litigation is not only time consuming but costly.
confidentiality – no one wants bad publicity, it's not good for business.
flexibility – both processes allow the parties a degree of flexibility.


What are the three basic types of construction dispute resolution?

Adjudication
Adjudication is a statutory right which applies to most, if not all construction operations in the UK. Under the relevant provisions of the Housing Grants, Construction and Regeneration Act 1996, it provides a temporarily binding decision which must be complied with until the matter is resolved by arbitration, litigation or agreement of the parties.



The process is designed for the swift resolution of disputes, often within 28 to 42 days from the receipt of a referral to ensure that money flows in the right direction and the project can continue with minimal delay.



Mediation
Mediation is a flexible, voluntary, and confidential form of alternative dispute resolution (ADR), in which a neutral third party (the Mediator) assists parties to work towards a negotiated settlement of their dispute, with the parties retaining control of the decision whether or not to settle and on what terms. An important point of mediation is that it is the parties who decide the outcome not the mediator.



Mediations often take place in one day, although there are plenty of tales of those days being long days, some with successful outcomes and others without.



Litigation
Litigation is the process of taking a case to a court of law so that a judgement can be made, it is usually a public hearing and generally regarded as expensive.



What are the most common causes of construction disputes?
Poorly drafted or incomplete and unsubstantiated claims.
Errors and / or omissions in the contract documents.
A failure by one or more than one of the parties failing to understand and comply with its contractual obligations.
Non-payment.
Site conditions.


With over two decades of experience in Quantity Surveying, cost management and construction, we work with companies of all sizes; Sub-contractors, Main Contractors and Employers.



We are Manchester based but offer nationwide coverage. We pride ourselves on providing a high quality, flexible and efficient service and an ability to give sound advice and direct solutions to help our customers both avoid and resolve construction disputes. This is demonstrated by the frequency of repeat business secured with our existing client base. We find that our shadow support on all projects is the best and most effective way to help our customers stay ahead of the game, save money, reduce stress, get paid and focus on the real priorities, many of which pay very little for our services.



Let us help you protect your business or next construction project, please do get in touch, and feel free to review our articles in our blog.

Just like coffee beans, not all processes are the same!
Litigation
Litigation – where a litigant takes his case to the courts for a judge to make a decision – occurs in virtually every jurisdiction. That decision is based on the law and, in the UK, case-precedent. It is a very formal process and conducted in public.

The judgment will be binding on the parties, subject to rights of appeal. The outcome cannot be predicted with any certainty and can depend entirely upon an individual judge’s interpretation of a statute and the evidence presented. The decision will be based upon legal rights and obligations. Inevitably, litigation is expensive, not just in monetary terms but also in terms of time – cases can take many years to reach court – and the stress associated with legal action.

Litigation provides certainty but takes no account of the emotional/psychological needs of the parties nor does it have a future-oriented focus. It can be critically damaging in terms of relationships. Conversely, litigation is the only method by which the law can be developed and ensures that the rights of the individual are protected.

ADR
The most common definition of ADR is Alternative Dispute Resolution. Another is Appropriate Dispute Resolution. Although some cynics have renamed it Another Disappointing Result or even Another Damn Rip-Off!

Negotiation
This is easily the most common type of dispute resolution, carried out in many forms every day by just about everybody all around the world. It is where the parties themselves attempt to settle their differences informally and directly.

Mediation
Mediation is the next step on from negotiation. When parties cannot resolve their differences through direct negotiation, they will often involve a third party to help them in their negotiations - to try and mediate. The aim of the mediator is to bring about a resolution acceptable to both parties; a solution that they are able to live with. It is therefore arguable that mediation is not the recent phenomenon many believe it to be but a practice that has been occurring since time immemorial.

The mediator is the third-party, treating everyone fairly and encouraging constructive communication between the parties in order to achieve a realistic, workable agreement that represents a win/win outcome for both. Mediation is an informal, confidential process that is able to deal with a wide variety of issues. It explores the feelings of the parties and their underlying interests. Unlike litigation, it focuses on the future and is not concerned with establishing rights with reference to events in the past.

Mediation allows people to communicate. It explores parties’ feelings and it allows the parties to participate fully in the making of decisions about how to resolve the dispute.

It is private and non-binding, although the agreement reached by the parties can become a legally binding contract if required.

Conciliation
Conciliation is like mediation in many aspects. The conciliator meets parties in an attempt to resolve their differences. Unlike mediation, however, this usually happens separately: parties seldom or ever meet with each other in the same room. The conciliator will, like a mediator, use their skills to lower tensions, improve communication, identify the key issues, explore potential solutions, and help the parties to a negotiated settlement.

Another difference between mediation and conciliation is that the conciliator will try to conciliate by seeking concessions from the parties. In mediation the mediator tries to guide the discussions in a way that optimises parties’ needs, taking feelings into account and reframing the parties’ statements.

Unlike a mediator, a conciliator may provide technical assistance. Another very significant difference is that a conciliator has expert knowledge of the type of dispute that they conciliate. They can make suggestions and give advice. In some types of dispute, the conciliator even has a duty to provide legal information. In contrast, a mediator does not have an advisory role. The mediator will try to help the parties reach a better understanding of each other and to find their own solution that is practical, realistic and does not represent a loss for either side.

Conciliation differs from arbitration in that the conciliator usually has no authority to seek evidence or call witnesses. Conciliators do not usually make a decision or write an award.

Dispute Review Boards
A dispute board or dispute review board (DRB) or dispute adjudication board (DAB) typically comprises three independent and impartial people who are chosen by the parties. Construction contracts, for example, might include a DRB clause.

The DRB is appointed at the start of a project before any disputes arise and is actively involved throughout the project, and even for an agreed period afterwards. A DRB can influence the performance of the parties during the period of the contract.

Construction Disputes
Construction Disputes are time consuming, costly, can damage reputations and relationships.



There are things Employers, Contractors, Subcontractors can do to avoid disputes. The eutopia is to avoid construction disputes entirely.



WHY DO CONSTRUCTION DISPUTES ARISE?
Disputes arise due to disagreements between parties. They often relate to breaches of the construction contract, but that is not always the case.



Common causes of construction disputes include:
The failure to understand the conditions of the contract
Project delays / extensions of time / loss and expense
The failure to operate the contract
Poor quality claims and the records which are provided in support.
A dispute itself is not generally regarded as a breach of contract but may become one and even lead to a termination event. The most sensible way of managing a dispute is to avoid a dispute entirely by taking the relevant steps in the planning and implementation phases of a project.


REDUCE THE POSSIBILITY
To reduce the probability of an issue, parties often need to put measures in place such as:

Carefully plan and programme the works, remember the old saying, measure twice cut once
Read and understand the contract
Avoid onerous terms
Ensure that programmes and timescales are realistic
Plan for delays and disruption
Record and monitor any delays as the works progress


CONSTRUCTION DISPUTE RESOLUTION OPTIONS
There are several dispute resolution options available to parties and contract drafters. The main forms available are:



Negotiation
This is easily the most common type of dispute resolution, carried out in many forms every day by just about everybody all around the world. It is where the parties themselves attempt to settle their differences informally and directly.



Mediation
Mediation is generally the next step on from negotiation. When parties cannot resolve their differences through direct negotiation, they will often involve a third party to help them in their negotiations - to try and mediate. The aim of the mediator is to bring about a resolution acceptable to both parties; a solution that they are able to live with. It is therefore arguable that mediation is not the recent phenomenon many believe it to be but a practice that has been occurring since time immemorial.



The mediator is the third-party, treating everyone fairly and encouraging constructive communication between the parties in order to achieve a realistic, workable agreement that represents a win/win outcome for both. Mediation is an informal, confidential process that is able to deal with a wide variety of issues. It explores the feelings of the parties and their underlying interests. Unlike litigation, it focuses on the future and is not concerned with establishing rights with reference to events in the past.



Mediation allows people to communicate. It explores parties’ feelings and it allows the parties to participate fully in the making of decisions about how to resolve the dispute.



It is private and non-binding, although the agreement reached by the parties can become a legally binding contract if required.



Adjudication
Adjudication is a legal process by which a neutral person (the Adjudicator) reviews the arguments, which may include legal arguments, presented to them by the parties. The adjudicator will reach a decision determining the rights and obligations of the parties.



The most common types of dispute referred to adjudication are those arising under construction contracts that fall within the detailed definition contained in the Housing Grants, Construction and Regeneration Act of 1996. The decision of an adjudicator is binding on the parties, at least until a further process is invoked; e.g., arbitration or litigation.



Arbitration
Arbitration is a process, subject to statutory controls, whereby formal disputes are determined by a private tribunal of the parties’ choosing. It is a legal way of resolving disputes outside the courts. The decision (‘award’) of the arbitrator is imposed on the parties and is legally binding on both sides. The arbitrator is either agreed by the parties or can be nominated by an agreed professional institution such as CIArb.



Arbitration is voluntary because the parties to a contract have agreed to an arbitration clause. Once they have so agreed, either party may insist on arbitration, and in that sense, it is mandatory. Arbitration is almost invariably binding in its effect.



Litigation
Litigation is where a litigant takes his case to the courts for a judge to make a decision – occurs in virtually every jurisdiction. That decision is based on the law and, in the UK, case-precedent. It is a very formal process and conducted in public.



The judgment will be binding on the parties, subject to rights of appeal. The outcome cannot be predicted with any certainty and can depend entirely upon an ind