Access to Justice in Construction Conflicts: The Case for More Mediation

Construction disputes are rarely simple or inexpensive, they often involve multiple parties, insurance companies, and technical experts. For small contractors, homeowners, or any party with limited resources, the costs of pursuing a claim can be prohibitive – sometimes exceeding the value of the damages.

The financial reality of pursuing construction cases cannot be overstated. On the defense side are often insurance carriers who fund the legal team and handle settlement payments. Plaintiffs, however, are required to cover attorney’s fees, expert costs, and destructive testing expenses, plus half of any mediator’s hourly rate. I often tell potential clients not to pursue litigation, or arbitration, unless damages are in the $150,000 – $200,000 range or higher. Below that threshold, it may be more sensible to put resources into fixing the construction problem rather than fighting it in court.

That said, for many cases mediation is a practical and far less costly alternative, especially when pursued before a lawsuit or arbitration claim is filed. In many construction conflicts, mediation is the smartest first step. It gives parties control over the process, preserves relationships, and avoids costs that can erode the value of a claim. It is voluntary, non-binding, and much less expensive than litigation or arbitration, which can run from $100,000 to $300,000 before settlement, and more if the matter goes to trial or hearing.

Both sides must be willing to engage from the outset and when they are, mediation can result in creative, workable solutions that litigation cannot provide. For clients, it may be the only viable path to justice. Even in high-value disputes mediation has advantages that litigation and arbitration cannot match, for example, creative payment arrangements, phased repairs, and the confidentiality to protect reputations. In one recent matter I mediated, a wealthy homeowner and a cash-poor contractor avoided the courtroom by agreeing to a structured payment plan. The contractor kept his business afloat, the homeowner received compensation, and both avoided the costs and uncertainty of prolonged litigation.
Still, mediation in construction cases comes with its own challenges. Some courts provide panels of mediators who work for free for the first three hours, but construction disputes require specialized knowledge that is not always available through these programs. In California, the Contractors State License Board offers a reduced-rate mediation panel, but options remain limited for those who cannot pay market rates for experienced construction mediators.

The skill, experience and reputation of the mediator also matters. Attorneys tend to rely on a small, highly respected group of mediators known for resolving complex matters efficiently. Building that kind of reputation requires consistent results and visibility. Years ago, one mediator doubled the going rate but advertised (and delivered on) a promise to resolve every case in a single day. He quickly became one of the most in-demand mediators in the field.
Most construction disputes settle (95-97 %) eventually, often after both sides have spent large amounts of time and money. Mediation brings that resolution forward, saving resources and allowing parties to move on sooner. Resolving disputes early through skilled mediation is a strategic advantage and should be at the top of the list for anyone facing a construction conflict.

James C. Earle

Mr. Earle has over 40 years’ experience in construction law and dispute resolution, serving as lead counsel in more than 40 trials and arbitrations and participating in over 1,000 mediations. A Certified Mediator since 1995 (Pepperdine University), he has represented developers, contractors, municipalities, homeowners, and product manufacturers in complex, high-value… MORE