A construction defect claim can be both expensive and damaging for a contractor’s or construction company’s reputation. Once the case goes to court, everything that either party discusses could potentially become part of the public record. Litigation can be a very unpredictable process, as much will depend on the judge’s interpretation of events.
It is common for professionals and business executives to worry about the outcome of a construction defect lawsuit and the secondary consequences that a claim may have for the defendant. However, only a very small percentage of business litigation cases actually go to court. Many of them settle, and mediation is one of the ways that the parties involved in a dispute can potentially reach an amicable settlement. What should a construction company facing a defect claim know about the mediation process?
It is typically not a binding process
Some people oppose alternative dispute resolution systems in part because they have heard negative things about mandatory binding arbitration. However, mediation is a completely different process that seeks to help parties compromise with each other. Both parties may need to compromise to reach an agreement, but there is no requirement to compromise. When successful, mediation results in a written agreement that both parties will sign. If mediation is unsuccessful, then the matter can still proceed to court.
It is a confidential process
The details discussed in mediation, including the concessions that one party or the other might willingly make to reach an agreement, will remain private thanks to state statutes. Under Missouri law, what occurs during mediation is almost always confidential. The lawyers representing the parties are bound by attorney-client privilege, and the mediator must also respect the right to confidentiality. Only the final agreement signed by the parties is typically ever subject to review by outside parties. Therefore, business representatives can discuss a matter very thoroughly without concern that the details of the dispute will become public knowledge.
When successful, mediation can speed up the conflict resolution process and even reduce the expense involved. It can also help preserve the working relationship between the parties embroiled in a disagreement. Recognizing the usefulness of mediation when dealing with a construction defect claim could help businesses better resolve a dispute related to a project.
