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In Place of Strife

The Mediation Chambers

King's College, London and The Technology and Construction Court release the results of new reseach into the use of mediation in construction disputes.

Tuesday, 12th May 2009

King's College, London and The Technology and Construction Court release the results of new reseach into the use of mediation in construction disputes.The use, effectiveness and cost savings associated with mediations that take place in respect of construction industry litigation is mostly anecdotal. To address this, an evidence-based survey was developed between King's College London and the TCC. Working together, it was possible to survey representatives of parties to litigation in that court. The results of this research have now been published and there are some interesting outcomes. A summary report of the final results of the research can be downloaded at the end of this article.Unsurprisingly, where a settlement was reached prior to judgment, the most successful method used was conventional negotiation, not mediation. This confirms what mediators know, which is that only the most intractible cases come their way. That said, the majority of respondents who had used mediation said it resulted in a settlement. Even where the mediation did not result in a settlement it was not always viewed negatively.Mediation was undertaken on the parties own initiative in the vast majority of cases. Of the successful mediations only 22% were undertaken as a result of the court suggesting it or due to an order of the court. Even where mediation was unsuccessful, 91% occurred as a result of the parties own initiative: only 1 out of 11 unsuccessful mediations was ordered by the court. This suggests that the incentives to consider mediation provided for by the CPR (namely, costs sanctions) are effective; and that those advising the parties to construction disputes now routinely consider mediation to try and bring about a resolution of the dispute.The cost savings attributed to successful mediations were significant, providing a real incentive for parties to consider mediation. Only 15% resulted in savings of between zero and ??ᬨ¬£25,000. 76% resulted in cost savings of over ??ᬨ¬£25,000, with 9% saving over ??ᬨ¬£300,000. The cost savings were generally proportional to the cost of the mediation itself with greater cost savings being found the higher the costs of the mediation were. This may be an indication that high value claims spend more money on the mediation itself presumably because they realise that the potential savings resulting from the mediation will be higher.The parties themselves generally decided to mediate their disputes at three key stages: as a result of exchanging pleadings; during or as a result of disclosure; and shortly before trial. The results are similar in respect of mediations undertaken as a result of the indication from the court and/or an order; these tended to occur during exchange of pleadings (possibly as a result of a first case management conference), as a result of disclosure and shortly before trial (possibly as a result of a pre-trial conference). Of successful mediations, a higher percentage of respondents believed that the dispute would have progressed to judgment if mediation had not taken place when this was undertaken during exchange of pleadings and shortly before trial. This suggests that mediation may have been comparatively more successful at these stages.

 

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