Mediation Would Fail In Shylock’s Approach: The Exception Of Construction Revisited

Abstract:


Mediation is a form of alternative dispute resolution (ADR), aiming to assist disputants in reaching a natural, practical and lasting consensus. Whether an agreement results or not, the parties themselves determine the outcome. Although the total idea behind mediation is to facilitate the parties to resolve the dispute on their own terms, the tendency will be to fail mediation in construction unless the mediator actively intervenes in changing the dynamic of the conflict by contractual, financial and technical evaluations. The argument to contrary is that the mediator in doing so acts beyond what is truly expected in mediation so that the outcome is arbitral to some extent rather than consensual. The author believes this is not necessarily the case in the exception of construction and contends that the key elements of mediation such as neutrality and impartiality can still be secured as long as the mediator does not step over the line into judgement.


Introduction:


The essence of mediation is that the mediator is neutral and impartial. The trust which develops during the process allows the mediator to perform a ‘bridging’ role. In doing so, the mediator should investigate not just the issues in dispute but also the underlying conflict.


Mediators eventually bring skills of naming, framing and reframing the issues and options with values and ethics. These altogether help mediators respond to the interests of the parties undoubtedly of course, without restrictions of the law. This ‘responsiveness’ shows how mediation as a process is informal, flexible and collaborative. A mediator owes a moral duty to guide the parties towards a settlement, yet fair and final, within the bounds of neutrality and impartiality.


Schools of thought and the context of construction:


Love and Kovach (19981) argue that ‘evaluative’ mediation is something of an oxymoron. The evaluation mediator in deciding for the parties is therefore not so different from traditional judges and arbitrators. In this way, mediators compromise neutrality leading to a settlement in favour of the party with the strongest legal argument. Palmer and Robert (2008)2 argue that this tends to encourage the parties to be competitive and adversarial. Where a mediator provides an opinion which can seriously disadvantage one of the parties, that party may even withdraw from the mediation. If the neutral takes on an additional role, then the decision making process becomes mixed3 . Hence, the mediators must avoid such ‘trash and bash’ approach that blurs the line of demarcation between mediation and other ADR processes.


The map of the mediation universe called Riskin’s Grid defines mediator’s orientation. Riskin (1996)4 contends that the range of mediation practice encompasses a wide array of evaluative conduct by the mediator. If the parties require advice on the parameters of settlement based on law, industry practice, or technology, Riskin advocates the appointment of suitably qualified mediators with an evaluative orientation. Conversely, if the parties believe that they themselves are better placed to develop creative outcomes, then a mediator with a facilitative orientation is fair enough. Although the intention is to define what can, does, and should happen in mediation, the proponents of purist ‘facilitative’ approach argue that the grid has tended to legitimize the evaluative activities under the label of mediation. They argue that the mediator should not answer the questions such as what is fair, what is amicable, how the court may interpret etc. They say it is strictly the job of the parties themselves.5


One of opponents on the views of Riskin is Stulberg (1997) whose comments on the Riskin’s Grid are very much of concern;


1. The only test of success is whether the mediator convinced the parties to accept an outcome leaving any captured concern aside. If the mediator is articulate in this way, adept with figures, then, such a conduct falls outside the purview of mediation. The author believes this idea is not far wrong in many commercial issues except of course in construction where a technical stuff is always a captured concern that makes the outcome sensitive.


2. The concept of freedom to develop or reject any solution is undermined when the intervener becomes evaluative. As such, anyone engaging in evaluation is not doing ‘mediation.’ The author believes that parties do intend the mediator to support them develop solutions and that essentially requires evaluation, alone or jointly.


3. The mediator who can service the broadest client base is the one who adapts her orientation to market demands. Stulberg claims that it is the mediator who must choose which orientation to adopt, and not the parties. This is in fact true in construction and is why a mediator to a construction dispute has to choose the way of conduct that best serve the purpose of amicable settlement.


4. The structure of the conversation can either support or undermine a viable notion of power balance and equality. Any decision to be ‘evaluative’ rather than ‘facilitative’ in one’s orientation may have an impact on fairness. The author is in line with the idea and if the mediator does not evaluate the case as a third man, he will not help in a fair deal.


5. The scope of mediation process captured by the grid might impair the appearance of impartiality. The author believes an assessment of each option on its own merit forms essential part of mediation and it will be a ‘meal without salt’ when mediation without evaluation in the case of construction.


6. The grid portrays the evaluative mediator as one who is knowledgeable about the law, industry practices, or technology. By contrast, the facilitative mediator might not know enough to give an informed opinion. The author contends that it could well be otherwise also. However much criticism has been leveled against evaluative mediation, Sam Imperati (1997)6 sees evaluative mediation ranges from soft to hard; from raising options to advice on outcomes to apply pressure on a settlement. Further, Richard, Wilmot and Smith (1997)7 argue the hallmark of a good mediator is the ability to provide a reality check without stepping over the line into judgment, which is a matter of competence.


The mediator’s incompetence is a very reason why parties terminate mediation. A party may complain that the mediator failed to prevent the parties making an illegal, unfair or unworkable agreement, or failed to disclose to a party that harm was threatened to them in circumstances where it would be reasonable to expect disclosure to be made. Unlike judges and others who engage in the administration of justice including those who court appointed, mediators have no absolute immunity that enables them to fully avoid trial of a claim made against them. As with judges, mediators are required to act impartially and independently, without fear or favour. Independence allows creativity and flexibility in approaches to an amicable settlement. Lack of independence makes the surrounding not sensible enough to mediate a case with a backbone. Hence, mediators should be free to conduct mediations as they think appropriate. Fear of being sued for an error of conclusive result may lead a mediator to be overly legalistic in their approach to the conflict. There is no alternative mechanism to fully preserve the mediator’s independence, other than liability insurance for any damages awarded as a result of the suit.


Parties who are unhappy with the mediation outcome refer to courts. Joseph (1986)8 argues no mediator should be held liable if parties agree to settlement terms that do not optimize their interests or fully capitalize on their rights. But it does not happen all the time. Parties dissatisfied with the court outcome may not sue the judge but they can appeal the decision. Candidates apply reassessment of results rather than challenging the basis of judgment in exams. Although there is no equivalent process for mediation because there is no determination to appeal, the disgruntled parties tend to contest the mediation outcome and is why mediators to take care of themselves through proper evaluations. Should the mediator in a large and complex construction claim employ a facilitative style or instead an evaluative style, which often is appropriate, depends primarily on the complexity of the issues. Facilitative techniques frequently offer the best opportunity for the parties to preserve their valued relationships, while evaluative methods enable them to have the benefit of an expert parsing of the issues without risking the consequences of a public trial.


Construction issues are generally hotly contested and they are often inextricably intertwined. Sizeable claims harm both the employer and the contractor. They are expensive and time-consuming. An employer may suffer loss of income, problems with funding and delayed occupancy. A contractor may face financial instability due to delay in payments. There will be parallel claims against each other, let us say time extension and liquidated damages, in which case a resolution is difficult if not impossible since the parties are at extreme ends. A mediator has to make his own interpretation based on whatever bona-fide facts and evidence available to him as befits the situation. Obviously, almost all construction projects encounter commercial, contractual, technical, interface or interpretative issues. However, in some instances, the parties are unable to resolve their conflicts of interests, may be the contract is ambiguous, silent or in dilemma so that a dispute develops. Parties seek mediation because they failed once or twice in the dispute settlement process or there is no contractual machinery at all. As such, a mediator has no option but to engage in a comprehensive review of the interwoven issues of both fact and law surrounding the dispute. Evaluative mediation is also necessary whenever there is a monetary charge to the conflict and when to intervene if the conversation becomes hostile or if the disputants are constantly repeating their positions, halting the progress of the mediation as a whole. The evaluative style is also better suited for resolving disputes where one or more of the parties appear unreasonable or inflexible in its negotiating position, which is typical in construction. It detects where the parties truly stand, drives the mediation forward and explores settlement possibilities from different angles and finally helps establish a basis of amicable settlement, as exactly intended in construction mediation.


Obviously, the flexibility in what a mediator can do is in stark contrast to what the courts can do. If the theory of ADR posits that the parties own both the dispute and outcome in that a shared solution will endure a better solution than an imposed one. The presence of the neutral gives them a sense of a standard of fairness, a standard against which they can measure their own position. A neutral may then bring new ideas and assist the parties in forming a solution. Disputants may eventually “tailor” a solution to the problems they consider important and relevant. However, the ways a mediator may adopt in evaluating a case may be different to that of another mediator and similarly the outcome.


As Ellan (1998) 9 emphasizes, if mediation is to be a true form of ADR, its underlying theory must also be distinguished from traditional courts and other forms. Neutrality being a principle can not however sacrifice fairness, both in process and outcome. ‘Neutrality’ doesn’t mean that the mediator does not have a point of view or even a solution which he feels would work. Rather, neutrality in the mediation context means that the mediator is not supposed to impose his or her views on the parties. No good neutral is without the subject matter expertise and construction clients do believe it indispensable. The rationale is that mediator brings industrial know-how and exposure that invariably benefits both parties in terms of time, cost, and quality ultimately the win-win outcome.


Impartiality is also a concern. One party may come to feel that the mediator is taking sides, particularly when a party is made to feel that his position is untenable. Once the case is taken up in mediation, evaluation is bound to happen that results in splitting the baby. This is inherent in construction.


Conclusion:


It is true that the mediator should anyway attempt to facilitate meaningful negotiations. This does not essentially mean that mediator’s role should be passive. An ‘evaluative’ mediation style is imperative for the mediator to actively express informed opinions on the merits of each option.


The traditional thinking that the outcome belongs to the disputants is no longer viable in long run for the existence of mediation as a form of ADR in today’s’ dispute theatre.


Under circumstances, it is not appropriate to assume that evaluative mediation is upper-handed. In fact, mediation would fail in construction without bringing contractual, financial, or technical norms into session.


End Notes


1 L.P Love and K. K. Kovach, Mapping Mediation: The Risks of Riskin’s Grid. Harvard Negotiation Law Review (1998) 3, 71-110


2 Palmer and Roberts, Dispute Processes, ADR and the Primary Forms of Decision Making, Cambridge, pp. 176-188 (2008)


3 Lela P. Love, “The Top Ten Reasons Why Mediators Should Not Evaluate”, 24 FLSULR Rev. 937 (1997)


4 L. Riskin, Understanding Mediators’ Orientations, Strategies, and Techniques: A Grid for the Perplexed. Harvard Negotiation Law Review (1996)


5 Joseph B. Stulberg, “Facilitative Versus Evaluative Mediator Orientations: Piercing the “Grid” Lock”, 24 Fla. St. U. L. Rev. 985 (1997)


6 Samuel J. Imperati, Mediator Practice Models: The Intersection of Ethics and Stylistic Practices in Mediation, 706 WLR 33:3, Summer (1997)


7 Richard Wilmot-Smith, Construction Contracts Law and Practice, Oxford (2005)


8 Joseph B. Stulberg, Mediator Immunity, 2 Ohio St. J. on Disp. Resol. 85 (1986)


9 Ellen A. Waldman, “The Evaluative-Facilitative Debate in Mediation: Applying the Lens of Therapeutic Jurisprudence”, 82 March LR. Rev. 155 (1998)


                        author

Chandana Jayalath

Dr. Chandana Jayalath has been a Chartered Quantity Surveyor working in the State of Qatar, with his latest exposure in the settlement of commercial and contractual issues, claims and disputes in public infrastructure projects.  MORE >

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