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Legal - Making the most of early mediation

image R. Carson Fisk, Andrews Myers P.C., Austin, TX

AUSTIN - Many dispute resolution clauses in construction contracts contain a requirement that the parties mediate prior to pursuing litigation or arbitration. Mediation, at its heart, is simply a facilitated negotiation, with the mediator helping all parties find consensus to resolve a dispute on their voluntarily agreed upon terms. A successful early mediation—before legal or arbitration proceedings have started—helps the parties save the time, money, and energy. Hence, early mediation is often contractually required. But success is never a foregone conclusion, and the parties should understand that successful early mediations often share a number of characteristics.

Exchange information.
    Early mediations generally occur before there has been a formal exchange of information, such as through discovery in a lawsuit. That limits the knowledge the parties bring to mediation with respect to the others side’s position. A lack of information as mediation commences means more time is spent in mediation simply learning about the facts rather than focusing on resolution. Exchanging information beforehand can bypass this issue.
Carefully select the mediator.
    Due diligence should be exercised when choosing a mediator to ensure that he or she is knowledgeable and qualified. There are a number of excellent mediators in the Texas market and beyond, but not all may be suitable for a construction-related dispute. Generally, websites are a useful source of information about potential mediators and objective criteria, such as board certification in construction law by the Texas Board of Legal Specialization, provide further insight as to a potential mediator’s qualifications. Similarly, mediators may have different styles (e.g., facilitative or evaluative) and practices (e.g., full-time mediator or actively practicing lawyer), each of which may be more appealing in certain settings.
Provide information to the mediator.
    Many mediators will request a mediation position memorandum from each of the parties prior to the mediation. The parties should take advantage of this opportunity to give the mediator some background and identify the settlement priorities for the respective party. At the very least, the mediator should be contacted in some manner so that such information can be conveyed. An informed mediator is able to more quickly focus on resolution rather than learning about the issues and background information.
Be organized and prepared.
    Understanding the elements of claims and defenses is key to a successful mediation, as is the ability of one party to show the other party that it can provide support for such claims and defense. Given the lack of or limited information provided in connection with an early mediation, organization and preparedness are of paramount importance. If a claim is comprised of several items, each item should be addressed and having a comprehensive damages model, supported by documentation, often proves useful. If the other party asks for certain information as the mediation progresses, one should readily be able to locate it. Being prepared also encompasses having an understanding of the party’s settlement goals heading into the mediation, and taking the time to prepare a draft settlement agreement in advance may prove to be immensely valuable.
Be open-minded.
    One of the major benefits of medi-ation is control of the outcome. When mediation occurs before the parties have had the benefit of full discovery, it may be more difficult to assess the likelihood of a positive or negative outcome. When decisions must be made with only partial information, considerations have to be made on factors other than simply the likelihood of prevailing or losing. Matters such as time saved, costs avoided, and relationships preserved should all be considered, and may be more easily considered in early mediation as the parties may not have become fully entrenched in their positions.
    Mediation is a valuable tool for parties in a dispute who wish to avoid the time-consuming, costly, and distracting aspects of formal proceedings. In general, the earlier mediation occurs the greater the benefit that can be achieved. However, to increase the chances of success, parties to an early mediation should give particular attention to the various tips discussed above. Success is never guaranteed, but these tips will undoubtedly aid the parties and make success more likely.


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