Originally from Dispute Resolution Journal

To mediate or not is a question parties to major construction disputes should ask themselves whenever a dispute arises. Unfortunately, it seems that, with the rise of limited liability companies, project asset-based financing, the shift to engineer, construct and procure (EPC) and design/build contracts, as well as the desire to finish projects and put them on-line as fast as possible, there is a rush toward costly, time-consuming litigation and arbitration.

Fortunately, experienced construction participants and lawyers are discussing the role that mediation should play. To use mediation effectively, the case must be appropriate for mediation, and the timing of the mediation needs to be deliberately chosen. Especially in connection with a serious effort to resolve complex, fact-based construction disputes, an early mediation may be more or may be less fruitful than a mediation that occurs later in the claims analysis process. While mediation has been incorporated as one of the first steps in the claims procedures in some standard form construction contracts, parties can strike the provision from the contract. They can also agree to mediate even when the contract is silent as to procedural conditions prerequisite to commencing litigation.