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03rd February 2021

Construction disputes – Zooming to a resolution

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In recent weeks my Construction Team colleagues and I have advised clients on the successful mediated resolution of two long running construction disputes. The mediations took place using Zoom.  So how do remote mediations work?

Construction disputes are invariably complex, involve multiple claims and defences and can involve a number of parties.  Add in the regular need for experts to advise on the merits of a disputed claim or on the cost of remedial works and these are all reasons why disputes in this category can take time and become very expensive for all involved.

In fact, the industry has already responded to this factor in a number of ways including that parties to a ‘contract for construction operations’ (e.g., a building contract, construction professional appointment) have the right to refer disputes at any time to a fast-track dispute resolution adjudication procedure.  Adjudication (compared to Court proceedings) is quicker and cheaper. As a consequence, it has been the dominant dispute forum in construction for some years.  However, adjudication does not suit every construction dispute. 

That leaves parties looking at a route which could either end up in trial at Court or in Arbitration.  However, there are further alternatives and quite some incentive to look at alternative dispute resolution procedures (ADR) such as mediation. 

High value or particularly complex construction disputes can be commenced in the specialist Technology and Construction Court. The TCC will encourage parties to use ADR procedures even before issuing proceedings and will, whenever appropriate, facilitate the use of ADR. Even beyond that category of disputes, the general Court procedure rules specific to construction and engineering cases state that potential litigant parties will be expected to make appropriate attempts to resolve the matter using a form of ADR.   

In fact, the entire Court procedural rules are structured to encourage early settlement. This includes requiring detailed notification at the pre litigation stage about each party’s position regarding a dispute and promoting settlement efforts before legal proceeding are commenced.  Even where litigation still ends up proceeding, parties are encouraged to find a resolution before a case reaches trial, including by use of ADR.

Mediation is one form of ADR by which the parties agree to appoint an impartial mediator to help them resolve their dispute.  The mediator is a facilitator and unlike a Judge will not impose a decision on the dispute, rather he or she works with the parties to assist them in achieving their own resolution. 

It is an entirely voluntary process. There is no obligation to mediate or to settle at mediation however the previously mentioned encouragement from the Courts in regard to ADR means that parties will be expected to properly consider mediation as alternative to litigation.  An unreasonable refusal can lead a Court to reflect that position in any assessment of any award of legal costs which is made later, even where that party has otherwise been successful.  Also, the Court can agree to a stay of Court proceedings to facilitate time for ADR. 

A mediation is very much not like Court proceedings.  Once the mediator has been selected the mediation timetable will involve the parties agreeing on a date and venue for what is usually a day long mediation meeting.  Ahead of that date each party will be asked to set out its position in a disclosed statement.  Much time is usually spent in the putting together these position statements which may include reports or other input from experts. 

The whole process is undertaken on a without prejudice basis to encourage the prospects for settlement without a party being concerned that a position taken in the mediation could be held against them if the procedure does not result in a settlement and Court proceedings later commence.

Careful preparation and the honing down of arguments is all important in mediation. Where the dispute relates to arguments about delay on a construction project this requires the precise setting out of complicated facts and analysis and the arguments about causes and consequences of delay.  However unlike a trial hearing which could take a number of days, the constraint of what is usually just a single day of mediation means that focussing on the key issues in dispute is critical if a party’s case is to be got across to the others involved. Also, a mediator will only have a finite amount of time to prepare and hear the arguments. 

And whereas pre Covid it would be common for mediation meetings to take place in a physical environment, with the social distancing constraints we are all now working under the use of video conferencing has taken over. Whether Zoom or some other video platform parties are undertaking mediations remotely. 

This mode of procedure takes some getting used to including in regard to just how each of the party’s representatives communicate between themselves remotely as the mediation progresses (we used WhatsApp as well as the Zoom side room options).  Ask the mediator to provide a run through and ensure that you test the technology, with back up options in case the WiFi fails. 

Beyond that, we have found that remotely operated mediations can be just as effective as in the case of a physical meeting. 

To find out more about our experience, make contact with a member of the Hewitsons’ Construction Team.

Colin Jones is a Partner in the Hewitsons’ Construction Team