Vol. 9 No. 11		November 1990

If you think about it for a moment, you have to conclude that most litigation is a foolish waste. Some 95% of the claims which enter the judicial system are settled prior to trial. Getting from summons to settlement can require prodigious legal effort at enormous cost. The principal purpose, it would seem, is to bring the parties and their counsel to the point at which they are finally prepared to concede that their best interests lie in avoiding the additional expense and risk of trial.

There is something wrong here. If the odds are better than 9 to 1 that a dispute will end in settlement, why would anyone in full possession of common sense suffer the trauma and expense of discovery simply to move conciliation from a highly likely to an inescapable outcome? The answer lies partly with the process, partly in the psyche, and partly in the nature of some claims.

The process hardens positions. It is conducted by professionals trained for adversarial engagement. Their goal is to win. We seldom object because something in our chemistry tells us that winning is better than the logical alternative. That something is reinforced by demands which seem outrageous, allegations more contrived than real, and causes of action no member of the human race would allow to go unchallenged.

Responding to the threat posed by a summons requires facts. Hence, discovery. But, once the battle is joined, even the gathering of facts tends to fuel the fires of hostility. Rare is the gladiator who would freeze the action, mid blow, to propose a different idea: "What say we step outside for a Gatorade? We might chat a bit about the lions laid on for next week." You might consider doing just that.

Mediation can be a useful alternative. Its principal advantage is the opportunity it offers to arrive at the most likely outcome of a dispute more rapidly, with less acrimony, and far less expensively than the slowly grinding gears of the judicial system will allow. It is a short-cut designed to collapse discovery into a manageable time frame and bring the parties quickly to the realization that their interests are best served by amicable resolution of the conflict.

The greatest obstacle to mediation is getting started--overcoming a natural inclination to join the battle long enough to explore the possibility of voluntarily seeking to avoid it. Yet, if we do not consider this alternative, what option do we have? We can fight to the point of exhaustion, and then negotiate anyway. Those who advocate mediation as a preferable course of action ask a reasonable question: "Why wait?" The outcome is likely to be the same; only the cost of getting there will be different.

Mediation is no panacea. It will not work where emotions, greed, or the belief that conflict is preferable to its resolution control the behavior of one or more of the parties. Nor will it work where compromise is perceived to be grossly inappropriate--either as a matter of law, or of principle. Fortunately, the elements of intransigence tend to be readily apparent.

In their absence, mediation can and, in fact, does function effectively as a catalyst for conciliation. The fundamental requirement is that the parties enter, in good faith, into negotiations aimed at ending the dispute. The difficulty is that the very idea of negotiating a settlement implies that "we" are going to have to give in--at least in part. This is not acceptable if "we" are wholly in the right. (Read "we" to be any disputant). It has a way of becoming increasingly acceptable, however, as litigation grinds on and, more often than not, reveals flaws in the fabric of our righteousness.

A capable mediator can bring those flaws quickly to the fore. His or her principal role is to guide the disputants toward common ground for resolution of their differences. Just how is this accomplished? Here are some of the many functions an effective mediator can perform:*

• Providing neutral ground and a positive atmosphere for conciliation.
• Collecting and judiciously communicating confidential information.
• Translating information into understanding of the strengths and weaknesses of one's position
• Assisting the parties in clarifying their true interests.
• Deflating unreasonable demands.
• Probing for compromises beneficial to all parties.
• Keeping lines of communication open.
• Assisting in the formulation of the settlement agreement.

Mediation can be initiated at any point in a dispute. But, recognizing that its use can be precluded by a dispute run amok, it may be preferable to provide for it as a remedy of first resort. Here, subject to review with your attorney, is language you might incorporate into your agreement which would do just that:

All claims, disputes, and controversies arising out of or in relation to the performance, interpretation, application, or enforcement of this Agreement, including but not limited to breach thereof, shall be referred to mediation under the then current Construction Industry Mediation Rules of the American Arbitration Association prior to any recourse to arbitration or a judicial forum.

The Owner and the Architect/Engineer agree to include the foregoing provision in any and all agreements with independent contractors and consultants retained for the project and to require all independent contractors and consultants to likewise include said provision in any and all agreements with subcontractors, subconsultants, suppliers, or fabricators so retained.

There are some legal safeguards which are needed, and having a procedural framework in place can help to surmount the obstacle of getting started. These are two good reasons to utilize the existing rules of one of the mediation services which have come into being in recent years. The American Arbitration Association is one of several from which you might choose.**

No one loses by attempting to mediate disputes. The process is voluntary, the costs are relatively nominal, and the effort can be abandoned if negotiations break down. Even where they do, mediation may well help to narrow the issues. Under the right circumstances, it can be worth a try.

* Paraphrased from Lurie, Paul W., Esq., "Alternative Dispute Resolution for Design Professionals," ACEC Guidelines to Practice, Vol. 1, No. 7., American Consulting Engineers Council, Washington, D.C., 1988.

** For alternatives, see: ADR: Alternative Dispute Resolution for the Construction Industry, ASFE-The Association of Engineering Firms Practicing in the Geosciences, Silver Spring, MD, 1988.

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© 1996, Professional Practice Insurance Brokers, Inc. This newsletter is published as a professional liability loss prevention service to PPIB clients and friends. It is intended for use by architects and engineers as an information resource. It is not intended to afford legal or insurance advice or opinion. Readers are urged to consult competent legal and insurance counsel for assistance in applying the information presented here to their own unique circumstances.