ACCL References & Links
Dispute Resolution and Guided Mediation
How the Use of Guided Mediation Will Substantially Reduce the Time and Expense of Avoiding and Resolving Construction Disputes
- The American College of Construction Lawyers (ACCL) was created in 1989 to draw together experienced lawyers practicing in the design and construction industry to be “Friends of the Project.” ACCL Fellows collegially share their insights and experience as respected litigators, in-house counsel, contract negotiators, mediators, and arbitrators. Our membership collects ideas from the many countries in which our Fellows practice. Key specialties are providing legal advice on dispute avoidance and resolution in contract drafting and when impasse develops bringing in litigators to provide trial or arbitration strategy.
- The construction industry has become critical of the domination of the adversarial legal system because it is focused on winning (or not losing). Resolving disputes through that system has become too expensive and time consuming, and often negatively impacts the economics of a project. Even if litigated cases eventually settle, the settlement likely resulted after delay and expense often caused litigators using discovery and motion practice before they would recommend using mediation.
- Smart clients want to use lawyers who know how to use dispute resolution processes that reduce the time and cost of getting to resolution, especially since most construction cases settle. They want lawyers who help them understand, as early as possible, the barriers to settlement and causes of impasse (besides money) so that they can determine whether or when it is in their best interest to settle or to litigate. And they want to avoid being forced to negotiate when they are not prepared because they don’t truly understand the “unreasonable” positions of their opponents. Early involvement of mediators is a key element of changing client experiences with the legal system, but clients need to know where they can find the right mediator.
- A group of prominent ACCL Fellows has addressed these client concerns and created a process to assist clients with earlier and more efficient resolution of disputes whether those needs appear before, during or after the construction process. The process is called Guided Mediation and is based on experiences outlined on the Guided Choice website [www.gcdisputeresolution.com]. ACCL has trained lawyers and mediators on how to use Guided Mediation and how to find mediators who follow Guided Mediation principles. We want to share our information pro bono with the goal of helping the industry achieve earlier resolution of disputes and improve project and company economics.
- ACCL’s goal is to reduce the time and expense involved in resolving disputes. We are seeing more mediators identify themselves as users of Guided Mediation. We also want the industry to understand the shortfalls of traditional mediation in which cases settle late, after considerable expense, with wins that represents Pyrrhic victories. ACCL is also committed to helping lawyers, mediators and clients expand their use of early dispute resolution.
How to Find the Right Mediator
Ask your resources, including your case manager for their recommendations of mediators who understand the importance of using a pre-mediation phase which precedes that start of any settlement negotiations and focuses on impasse diagnosis and methods of shortening the time for dispute resolution. While mediators may have settled many cases, when those cases settled is just a important to the economic impact of the settlement. Recommendations can include mediators familiar with ACCL Guided Mediation process which is available on the ACCL website www.accl.org
Ask mediators you are considering hiring about how they have achieved earliest possible resolutions of cases that have settled. Also ask, whether their impasse diagnosis process includes looking at more than the legal and factual issues but also the personalities and negotiating style of the decision makers participating in the mediation and the corporate culture of the parties especially if based outside the U.S. What is their successful experiences when insurance companies are involved?
Avoid interviews with all the parties participating in the initial interview. Once the parties have each identified acceptable mediators a joint meeting may be useful. A virtual Zoom type meeting is useful to overcome resistance to the timing of hiring a mediator. Zoom is a great way to conduct interviews and pre-mediation phases even if the parties want to have live settlement negotiation sessions. Most good mediators are experienced using Zoom.
Involve clients in the interview process. They should understand what kind of mediator would be in their best interest. This is easy to do using Zoom.
What is Guided Choice versus Guided Mediation
Guided Choice is the name of a pro bono website founded more than 10 years which describes the tools used to achieve the earliest possible resolution of disputes in order to reduce process expense and the time for resolution. It also collects articles and books that focus on these tools. The site regularly has thousands of visitors from around the world and not just the U.S. www.gcdisputeresolution.com
Guided Mediation is a form of mediation which focuses on the processes used by the mediators especially the use of a pre-mediation phase that precedes any settlement negotiations. Guided Mediation processes include diagnosis all causes of impasse, to help the parties understand whether and when settlement rather than litigation is in their best interest, and finding ways for the parties to work collaboratively on furnishing the needs of the parties to consider change of position. Guiding Mediators use the tools of Guided Mediation.
Dispute Resolution Clauses in Project Contracts
One of ACCL’s objectives to have all the parties agree on retaining a mediator as process facilitator before the parties begin to make settlement offers and demands. This can even occur before the parties meet with executives in a Step Negotiation session. Having a standard mediation clause in all the project contrasts would facilitate the early hire of the mediator and help avoid resistance to such hire. A good mediation clause is contained in the American Institute of Architect Forms of Construction Contracts. The contract form incorporates by reference the AAA rules for mediation which are also excellent in the ways they allow the parties to use mediation and arbitration in parallel. JAMS has a form Sample Project Neutral Clause which is a form of project neutral. The parties may agree to use different case administrator than the one provided for in these AAA and JAMS forms.
If the construction contracts contain no mediation requirement, any of the parties should suggest to all that they explore mediation by suggesting names of potential candidates for the other parties to privately interview as suggested by the ACCL format. It should be emphasized that bring a mediator aboard does not mean the parties are committed to discuss settlement until they are ready.
Advantages of using Zoom for Pre-Mediation Activities
The purpose of the pre-mediation phase is to hire the mediator, for the mediator to conduct impasse diagnosis, and for the parties to discuss the mediator’s recommendations about what should happen before the parties are ready to seriously determine whether settlement or litigation is in their best interest.
Other Processes for Dispute Prevention
Many corporate lawyers would like to avoid any need to employing outside consultants like mediators. They do this by focusing on the quality of their communications with other contracting parties to resolve disagreements. Jim Groton, a ACCL founding member, is the original author of these ideas focusing on prevention rather than bringing in the litigators and mediators when disputes occur. A good collection of materials is on the CPR website www.cpradr.org. However, prevention does not always avoid impasse and process alternatives need to be considered. Guided Mediation assumes that bringing in a mediator can occur at any time on the timeline of a situation which is escalating into a impassed dispute. A Guiding Mediation resembles a project neutral in that their initial assignment is to work with the parties to keep relationships operating on a collaborative basis and explore methods needed to overcome impasse and avoid escalation. The following are prevention options.
Project Neutrals. A project neutral is hired at the beginning of a project to help the parties avoid disputes. The project neutral spends time understanding the project in which the parties are involved. This is mostly used on large complex projects which take a long time to complete and are bound to confront unpredictable situations. Project neutrals are expensive because of the extensive time commitment. However, it is simpler to hire a Guiding Mediator for a specific identifiable issue rather than hire a project neutral whose job it is to stay involved in a project before any disputes arise.
Partnering. In construction, a process was developed called Partnering in which the major players (and not lawyers) on a complex project would engage in pre-construction meetings led by a partnering professional facilitator. In this process the parties usually meet for a day and half and discuss various problem that could arise on the project during construction and how they should react in terms of process which resolves the issues. The goal is for the group to leave the partnering session feeling like “partners” and not adversaries when issues arise. Partnering is not as widely used in commercial construction as it is in highway construction. However, the same concept is taught by major business schools for corporations under the name “What If Scenario Planning. Gilbane Construction uses a variant of this process and its counsel is an ACCL Fellow.
Dispute Review Boards. DRBs were invented initially by non-lawyers to settle disputes without using lawyers. The idea is that three construction industry members and not necessarily including a lawyer, would hold meetings with contracting parties during the course of construction. They would become familiar with the project and issues which could create problems. Any party can bring an issue before the DRB with the parties agreeing that the DRB may or may not issue an opinion on who is right. The parties agree whether any such opinions are binding or not in subsequent litigation. DRB are mostly used on large long term construction projects. Their use does not normally exclude the use of mediation down the line. Interestingly projects using DRB seldom need court or arbitration processes.
ACCL Fellows’ Understanding of the Role of the Mediator Using Guided Mediation
1. My role includes helping the parties engage in a process to settle their dispute as early as possible.
2. How I implement my role as a mediator depends on when I am retained, the nature of the dispute, and the type and style of services the parties’ desire. Nothing in this Understanding shall limit the way I determine to provide my services nor be inconsistent with agreements to which I am a party.
3. The parties may not be ready to begin settlement negotiations until their information needs are satisfied. This is to enable decision makers to decide what kind of settlement process is in their overall best interest. My role is to help the parties satisfy those information needs as quickly and efficiently as possible.
4. Some parties may have a need to commence parallel court or contractual arbitration as a condition to commence or continue to negotiate. If requested, I will help the parties design those processes to be as efficient as possible. While the “mediation” may be suspended, I will make myself available confidentially to the parties to facilitate resumption of the settlement process.
5. Parties decide to eventually settle disputes for many reasons. These include (1) outcome predictions based on law, facts, expert opinion, and the tribunal which would make binding decisions; (2) human behavioral and social characteristics of the persons and organizations who must change positions to allow a settlement to be reached; and (3) an understanding of the consequences of a decision to settle or not settle. I will try and identify these factors as soon as possible and ideally before any settlement negotiations begin.
6. Based on my confidential conversations, I will identify as early as possible the persons and organizations who must be involved in the settlement process. These may include non-parties to a legal proceeding or person’s or entities who do not have a contractual obligation to participate in a formal mediation. These may include insurers, governmental agencies, family members and advisors, and experts on whom the parties have relied in formulating their differing settlement positions.
7. I will obtain the above information as soon as possible after my appointment as a mediator empowered by law or agreement to have confidential conversations with persons having information relevant to the design of the settlement process.
8. If there is reluctance by any of the parties to engage me as a mediator, I agree to discuss with representatives of such parties whether my engagement as a mediator can be in their best interests even if they believe they are not ready to begin a formal mediated settlement process. I will agree that anything discussed prior to my retention as a mediator I will consider confidential if so requested. This obligation will be superseded by any executed mediator retention agreement.
9. I will use my best effort to continue my education to maximize my settlement skills.