These are some of the reason for disputes which frequently occur
in construction projects:
-
The owner who wanted to change things, with or without a
“change order” as the project was being built, but then
doesn’t want to pay the price charged after the changes are
done;
-
The Architect who designs a project which gets changed by
others during construction, with or without his knowledge,
and is blamed for the problems when the project is not the
same as the original drawings;
-
The contractor who met all the standards of the industry,
but the owner is demanding far more and produces a list of
imperfect or shoddy work;
-
The subcontractor who is, many times at the mercy of other
contractors and experiences delays by others contractor’s
increasing his costs, but ends up with back charges of one
sort or another that cancel out its payments due;
-
The contractor who promises to deliver a project at a stated
due date for which the contractor is to be rewarded with an
incentive payment, but the owner decides to renege on that
promises
The character of these disputes, especially on larger commercial
and industrial projects, makes them expensive and time consuming
to litigate. Juries find them incredibly difficult to
understand, because the disputes are often factually
complicated, require review of a huge amount of documents, laden
with technical issues and fueled by emotions.
When the parties to a contract litigate these disputes, they are
likely to spend as much or more money during the intense
discovery procedure then they do for the trial. Even when
binding arbitration is utilized, similar problems occur. The
answer to these problems is mediation.
Mediation is not new to the construction industry, and
is becoming more widely used. Many of the standard
industry form agreements require the parties to agree to
start with mediation, before they commence any other
step whether through binding arbitration or litigation.
Many of these agreements disallow either party unwilling
to go through the mediation process to collect
attorney’s fees and costs, even if that party prevails
in litigation. WE, at Southern
California Mediation Partners (SCMP), ask why would
any party in a dispute dictated by an agreement to
mediate, want to avoid this simple process, and lose the
ability to get an award of legal fees and costs, should
litigation become necessary. |