High Stakes Construction Mediation: Does the “Hype” Justify the “Hope”

Abstract

Just a few days before writing this editorial, I settled one of the most complex cases of my 25-year construction law career. I represented the owner of a power plant who was faced with a $100 million claim by one of the world’s largest EPC contractors. The parties fought long and hard for over 2 years, and spent millions of dollars in legal and expert fees getting ready for what was to be a 6 week arbitration. We had tried repeatedly to initiate settlement discussions, with no luck whatsoever. What was the event that finally changed the negotiation dynamics and convinced the parties to settle? The EPC contractor finally agreed to our suggestion to mediate, and, within 2 weeks of that decision, one of the best construction mediators in the world was able to work his ‘‘magic’’ and bring the parties to an amicable resolution. As most readers know, mediation has become one of the primary tools in getting construction cases resolved before litigation or arbitration. But is it a ‘‘magic potion’’ that can work anytime and on any dispute? Would my power-plant case have settled on its own, without mediation? Would a different mediator have successfully resolved the case? While I love the process, I don’t believe the magic works all of the time. There is a certain amount of ‘‘hype’’ and unrealistic ‘‘hope’’ associated with the process that stops it from being a sure-fire way to get cases settled. Consider some of the following issues.