Who Needs to be Present at a Construction Mediation?

{6 minutes to read} This is the first of several blog posts on who needs to be present at a mediation for it to proceed smoothly. A resolution may not be reached even with all the proper players present. But without them, there is no chance. This blog will address construction cases. 

Construction cases come in all sizes. They can arise from putting in a new bathroom to constructing a hundred-story skyscraper. And everything in between. Even small jobs may involve an architect, a GC, and a sub or two. For example, that new bathroom may require electrical work that is done by an electrician who is not an employee of the GC. If there is an electrical issue post-construction, does the electrician need to be present at the mediation? Probably, but has the electrician been sued? Of course, a mediation can be held without starting a lawsuit, which can be extremely useful assuming everyone agrees to participate. Maybe the homeowner and GC can work something out between themselves. In a small job, that’s often possible.

In large projects, there can be multiples of all these and more. Every supplier can become a party when a dispute arises. Those aren’t the correct tiles? Well, what exactly did the architect prescribe? Who was the manufacturer? Who was the distributor? Did the tile guy pick up the wrong ones, or make an ad hoc decision when he found out the tiles called for weren’t available? And might never be. Are the windows leaking? Is it from the second story of a one-family house and six new windows are needed? Or from floors 52-87, and replacing them will be a multi-million dollar job? Why weren’t permits obtained in a timely manner? Was it government laxity or the failure to address objections properly? As Tolstoy said, every unhappy construction project is unhappy in its own way.

Who needs to be present at the mediation is therefore dependent on the facts of the case. And it may not be obvious at first who the needed players are. Sometimes it isn’t clear until after the mediation begins. Among other things, mediation is intended to shorten the discovery process that can otherwise drag on for years. This means that occasionally, a needed entity isn’t clearly known until the mediation process starts. In my experience, this actually reflects the strength of the mediation process. Rather than that relevant player being found out after the fifth deposition – taken a year after the suit was filed – it can be discovered and explored during the mediation session or during pre-mediation discussions between the mediator and the attorneys. After a pre-mediation discussion, attorneys sometimes go back to their clients to flush out a few things, including exactly who was doing what. 

I have had construction mediations that took 6-8 months to complete because the parties, in addition to pointing fingers at each other, then started pointing fingers at other entities, like architects, subs, building departments, etc. Might those people actually participate in the mediation? Maybe, though they’ll be hesitant if they haven’t yet been sued. However, sometimes that’s not an issue, and an architect who, for example, no one is suggesting did anything wrong, might shed light on what if anything went wrong during construction, who might be responsible, and better yet, how to fix something in a way that works for everyone.

Large construction companies generally have many people with enormous expertise, who while not involved in the project that is the subject of the lawsuit, might be helpful in explaining methods, materials, and procedures. They may be very helpful in providing information that helps resolve a dispute. 

And then of course there is the matter of insurance, which can come into play regardless of the particular subject matter. Insurance companies may often hold the ultimate purse strings, and they usually want to pay less rather than more. But they may also be bearing the cost of litigation and therefore be more willing to pay than insured parties who may think they did nothing wrong. Having an extra one or two people participate in the mediation, even if the insurance company bears the cost, maybe money well spent.

Lastly, what does being “present” mean? In the Zoomiverse, people are not flying into town as often as before. The good part is that people who are useful to the mediation process can often be called upon when needed. However, being in the room, whether virtually or physically, can have its benefits and an important part of the pre-mediation discussions needs to cover that. And remember, sometimes keeping certain players apart may be as important as keeping them together.

What has your experience been in having the necessary parties present when mediating construction disputes?

Gary Shaffer Shaffer Mediation Gary@ShafferMediation.com