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Mediating Construction Disputes: What Works and What Doesn’t - Chapter 18 - AAA Handbook on Construction Arbitration and ADR - Third Edition

Author(s): 
Richard P. Flake
Susan G. Perin
Page Count: 
18 pages
Published: 
March, 2016
Author Detail: 

Richard P. Flake is a Shareholder of Cokinos, Bosien & Young, in Houston. A
former General Counsel of Spaw-Glass Construction, Mr. Flake is an active mediator and
arbitrator of construction, commercial and employment disputes. Mr. Flake is also a
Municipal Judge for the City of Friendswood, Texas. He is admitted to practice before
the U.S. Supreme Court.


Susan G. Perin has a full-time mediation and arbitration practice in Houston, Texas.
She has 20 years of previous litigation experience with an emphasis on construction cases
and has mediated and arbitrated numerous complex, multi-party construction cases. Susan
was one of the founding members of the Construction Law Section of the State Bar of
Texas and now serves as a Council Member on the State Bar of Texas Alternative Dispute
Resolution Section. She has taught mediation to hundreds of attorneys and for six years,
was an Adjunct Professor in Mediation at the University of Houston Law Center.

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Description: 
 
I. Introduction
 
 
 
Nearly all construction cases, whether in the litigation or arbitration
 
forum, will be mediated. This can be attributed to the many contracts
 
that require a good faith effort to mediate prior to the use of arbitration,
 
and the many courts that have found court-referred mediation to be an
 
effective tool in managing their dockets. Because construction cases
 
often involve numerous complex issues, attorneys who act as mediation
 
advocates need to adequately focus on these issues in order to provide
 
the best possible environment for success in mediation. However, there
 
is no one “bible” stating the rules of advocacy in a construction
 
mediation, and there are different opinions on the subject. This chapter
 
contains suggestions based on our experiences as construction
 
mediators which we hope will enhance the mediation process for
 
counsel and their clients.
 
 
 
II. Pre-Mediation Issues
 
 
 
There are a number of important pre-mediation issues that can have a
 
significant impact on the client’s case; for example, when to mediate,
 
preparing for the mediation, managing the client’s expectations, and
 
preparing the client for the mediation session. These issues, which are
 
discussed below, require the full attention of counsel.
 
 
 
A When to Mediate
 
 
 
A significant amount of thought should be given to this issue,
 
particularly in light of the amount of discovery that will be needed in the
 
case. A construction dispute usually will not settle before it is “ripe,” but
 
this does not necessarily mean that settlement can occur only after all (or
 
some) discovery takes place. Clearly all of the facts will not be known or
 
developed prior to the completion of substantial discovery, but this does
 
not preclude serious consideration of early mediation, which has many
 
advantages. If mediation is undertaken while the project is still under
 
construction and work is continuing, there is a greater likelihood of finding
 
a business resolution. Moreover, the parties will be able to control many
 
more issues and be able to “horse-trade” their claims. Additionally, early
 
in the dispute, feelings may not have hardened beyond repair. If the parties
 
still need each other (for example, for completion of certain work items),
 
they may see the benefit of maintaining their business relationship, and
 
agreeing to a business resolution of the dispute. If a dispute lingers until
 
after construction is complete, the bargained-for resolution usually is
 
limited to a monetary outcome.