What is the process of Mediation in construction

What is the mediation

In the process of mediation in construction, all the parties are agreeing and appointing a neutral third party (person) as a mediator. The mediator should be a qualified and expert person in the industry. Also, the selected mediator has to be acceptable by both parties. This process will proceed without harming the existing relationship between the parties involved.

key elements/steps of the process of mediation in construction projects

  • First of all, there is no formal procedure to conduct a Mediation.
  • And, Each party will have equal time to present their evidence in joint meetings.
  • The mediator will not express his personal feeling or views regarding the matters.
  • But he can give an opinion or ask a question related to the case.
  • The final settlement will decide all together with parties related to the conflict.
What is the mediation
Image by Gerd Altmann from Pixabay

case study

Mediation Case Study (Morgerman, 1996)
Project:- Construction of a school building and renovation of an adjoining school building at a university in New York City.

The contractor has raised productivity lost due to unreliable drawings, poor planning etc.
Claimed value is approximately $1,000,000.00.
But the contract is mentioned that
“Any claim for damages on account of any delay, obstruction or hindrance for any cause whatsoever… and agrees that its sole right and remedy… shall be an extension of time fixed for completion of the work”
In Opening meeting Respondent attorney stated that,
“No Damage for Delay means no damages, period.”

Matthew Patrick Tucker, (2005). An Overview of Alternate Dispute Resolution Use In The Construction Industry, Austin: The University of Texas at Austin.

This statement indicates that the mediation process for the particular case will be a lengthy and tough one, therefor mediator decided to move to private meeting sessions.

In a private meeting, the mediator has clarified to the attorney of the respondent that the claim of lost productive is valid in the construction industry.

In the meeting, the mediator has with the claimant. He tried to persuade the claimant to reduce their claimed amount.
Also, he found an error in the claimant claim. In the closing meeting, the mediator has proposed a number for both parties for final settlement. (Of course, the mediator will not recommend any figures for final settlement) But here the mediator felt that this dispute is heading to the litigation process unless they agreed on a final value.

Therefore he has approached with final settlement figures to both parties. And after that mediator having an extra meeting with the respondent, and he is furthermore explaining construction claim process regarding lost productivity concepts.

He shows that in this case, frequent changes to the design are the cause of productivity loss, after a few more negotiations and discussion conducted with claimant and respondent. Finally, both the parties agreed to the final settlement.

Check our article regarding arbitration.

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