What Are the Benefits of Mediation in Construction Disputes?
More than in most industries, projects in the construction sector are prone to disputes that may arise at any stage of the process, owing in part to the many parties and heavy investment involved. Litigation is often the result, but methods of alternative dispute resolution – particularly mediation – can often yield more positive results.
Experienced lawyer and mediator Zineb Kouoidri explains the unique benefits that mediation has to offer the construction sector in this feature.
What is the value of mediation as a method for resolving construction disputes?
The construction field is made up of many different business spheres. It involves layers of engineers, architects, general contractors, workers, suppliers and experts of all kinds. All these people must work together to complete a common construction project.
Personalities are often strong in this field and responsibilities are shared and intertwined on more than one scale. These factors of intertwining responsibilities favour the creation of disputes between the different actors in this field and at each stage of the realisation of the project.
However, the judicial delays necessary to treat disputes in the field of construction can be counted in years. This not a particular quirk of Canada, but rather an international plague.
These delays paralyse a project when it is at the stage of realisation and can increase in time when the litigation appears after the project is completed. In such cases, the damages and costs incurred can be aggravated and the interests of the various parties to the dispute can be significantly affected.
Because of its immediate access and its open communication methods, mediation is an ideal solution that should be taken more into consideration in the construction field. It will be quick and efficient when the parties invited to the negotiation table have a real will to reach an amicable solution.
Mediation is a strictly confidential process, which makes it a means of settlement without putting pressure on the various parties in a construction dispute. Indeed, the word of the parties is thus liberated since nothing in their statement can be used against them in a subsequent judicial procedure. The parties remain masters of the final decision which will be made by them together.
In what circumstances may the use of mediation be preferable to other forms of ADR or simple litigation?
In construction, especially for large projects, internal standing committees for dispute resolution can be set up to manage any conflicts that arise during project execution. These committees can be very quick and efficient in managing disputes. However, the decision remains imposed by the committee even if it is not final. Indeed, the parties always have the right to take action before the common law courts if the decision does not suit them, which brings us back to square one for certain cases.
The judicial delays necessary to treat disputes in the field of construction can be counted in years.
Unlike arbitration or litigation, mediation is a process that focuses on respecting the respective interests of the parties rather than directly applying the applicable law or taking the form of a consensual tribunal.
In mediation, the solution does not reflect the mediator’s view or interpretation of the law or the dispute but results from the sole will of the parties. The final decision will be by mutual agreement of the parties and is not made or imposed by the mediator. The parties will in some way judge themselves.
Finally, mediation is a low-cost process compared to other alternative dispute resolution methods in the construction field. It preserves and strengthens long-term business relationships by restoring dialogue between the different actors in the dispute.
What skills and knowledge should a mediator possess in order to effectively mediate on a construction dispute?
Mediation is a unique form of participatory justice because it brings the parties to discuss the dispute by their own will. They will be led to listen to each other to better understand each other’s position in a dispute. It sounds easy in a sentence, but it is quite a challenge in the mediator’s field.
The mediator’s construction skills will be important, but managing the different parties in a mediation is even more important. The personality of the mediator must inspire confidence in all parties. The mediator must also be careful with body language that may indicate a position that is being interpreted by one of the parties, which will lead to a certain failure of the mediation.
The management methods for conducting a mediation remain more or less the same in many areas. However, the mediator must be a good listener, eloquent and open-minded. The mediator must be patient and calm in all circumstances. Essentially, he or she must have poise and demonstrate unquestionable impartiality.
How can parties and legal counsel work to ensure that mediation under these circumstances has the best possible likelihood of success?
Mediation should be a prerequisite to any other alternative dispute resolution. It should be automatically advised as the preferred method of settlement to the parties by their legal counsel. It is recommended that all model construction contracts and service agreements include sections detailing the mediation process as the first resort for dispute resolution.
Mediation should be a prerequisite to any other alternative dispute resolution.
It is also important that third-party mediators be selected through a list of criteria. It is imperative that the chosen mediator have knowledge of the subject matter of the dispute as well as a number of years of experience as a mediator.
Often the appointment of a particular mediator is already pre-established at the conclusion of the contract. The parties will need to be informed of what mediation is and its benefits in business before the contract is concluded.
These procedures will allow the parties to start the mediation process quickly from the appearance of a conflict and will help to promote the chances of success of the mediation.
During your time in practice, have you seen a change in attitudes regarding mediation as a tool for the resolution of construction disputes?
The use of mediation has often been timid during the majority of our years of practice as lawyers and accredited mediators in commercial and civil law, the tendency in construction law having always been for an attitude of confrontation between the parties in dispute.
However, we have found that the mediation process did not necessarily occur at the beginning of the dispute but rather at a certain stage of its maturity between the parties. After becoming aware of the loss of time and costs generated by the dispute, the parties create a common interest – which is that of resolving their conflict quickly in the interest of all. They then agree to suspend their legal proceedings and resort to mediation. In these cases, we have recorded success rates that exceed 80%.
Are there any other trends that you are noticing in these areas?
We have noted that mediation is not welcomed in the same way in all areas of law. Only in certain areas of law where there are government funded programs will litigants be more inclined to use mediation at the outset of a dispute.
Indeed, in an effort to reduce the caseload in the courts, government-subsidised mediation programs have been developed in Canada, particularly in family law. The subsidy was only available for a few sessions but the public response to the program was immediate.
We therefore encourage that these types of programs be generalised to all areas of law and not be an exception. We are certain that this will promote the interest of the public and the different business actors to use them. This will facilitate to these different actors the awareness of the interest and the utility of mediation in the management of their cases and will benefit the good management of justice by the same occasion.
Zineb Kouidri, Lawyer
75 Bd des Châteaux, Blainville, QC J7B 2A4, Canada
Tel: +1 514-992-6333
Zineb Kouidri is a lawyer and an associate at BTK Avocats, and an accredited mediator in commercial and civil matters. With over 17 years of experience in the legal field, during which she has worked on several large-scale projects in Quebec and abroad, she is an active member of several notable organisations, including the Board of Directors of the Regroupement des Jeunes Chambres de Commerce du Québec (RJCCQ) between 2015 and 2018,and Business Professional Woman Montreal, where she worked as a director in 2019. She also sits on the board of UniAction.
BTK Avocats is a Montreal-based law firm that specialises in business law, real estate and construction law and family law, as well as civil and commercial litigation and drafting contracts.