Construction Law

When Is Mediation Preferable to Litigation? featured image

When Is Mediation Preferable to Litigation?

Mediation and arbitration are two alternative dispute resolution (ADR) methods. ADR methods are often preferred to litigation because of their time- and cost-saving qualities. But while mediation and arbitration are both ADR methods, mediation has its own qualities that make it uniquely beneficial for resolving construction disputes. 

Below, a Denver construction lawyer with Cotney Attorneys & Consultants will discuss when mediation is preferable for resolving construction disputes. ADR methods like mediation are often required by construction contracts or by court order. If your company is involved in an escalating construction dispute and seeking representation during the proceedings, consult a Denver construction mediation lawyer from Cotney Attorneys & Consultants. 

What Happens in Mediation, Stays in Mediation

How often have you read the news only to see a dispute laid bare in a scathing article? Where a contractor’s actions are brought into question as accusations swirl around them? Construction disputes, especially disputes that form over the course of months on larger projects, are incredibly complicated. No party involved thinks that they’re the bad guys, and no one who pursues litigation does so thinking that the facts aren’t on their side. 

Related: Why Mediation Should Be Used For Your First Attempt at Resolving a Dispute

A dispute may involve trade secrets or intellectual property that should be kept confidential. Alternatively, a dispute could involve embarrassing information that could damage a company’s reputation if made public. Whatever the case, mediation can ensure that what happens in the privacy of a conference room stays there. 

Dispute Resolution on Your Schedule 

Litigation can take well over a year to schedule. As of the time of this writing, courts around the country have reduced operations and staff to prevent the spread of coronavirus disease 2019 (COVID-19), as is the case with the 2nd Judicial District serving Denver County. Court proceedings will likely return to normal by the time your dispute is brought before a judge. However, there’s no telling how long cases will take to reach a judge going forward, especially when you consider that Denver’s district court was already overwhelmed before all this happened. 

In stark contrast, mediation hearings can resolve a construction dispute in a matter of days. Remember, this is an informal arrangement, so all that’s needed is for all parties involved to agree upon a schedule and location that’s convenient for everyone. Consult one of our Denver construction attorneys to begin the process of resolving your dispute. 

Conserve Resources 

Why did your dispute occur in the first place? If your dispute started because of withheld payment, rising material prices, or delays resulting from labor shortages, then your dispute is really over a lack of resources. In an industry known for high-risk-high-reward projects, every project owner and contractor is out to save money and conserve resources. Unless you’ve pursued all other options, litigation is simply not cost-effective. As we’ve previously covered, the average construction dispute costs nearly $20 million. This is due in part to the high costs of attorney’s fees and litigation. Think about it; every meeting, deposition, and legal fee takes a bite out of the money you recover from trial, assuming you win at trial. 

Related: Effective Tactics for Construction Mediation

How much does mediation cost? Depending on the cost of a mediator and legal representation, you’re looking at less than $10,000 and less than a week of your time to undergo the process. Considering that disputes cost millions of dollars on average, this is a small price to pay to reach a final decision that all parties agree to. For more information on the cost of a Denver construction mediation attorney, call our law office today. 

Reach a Lasting Resolution   

Unlike litigation or even arbitration, mediation isn’t about forcing a settlement on a losing party. A judge’s verdict, although beneficial for one party, can lead to another party’s dissatisfaction with the process and the end of what could have been a beneficial business relationship. Mediation brings disputing parties together and encourages them to find a mutually agreeable resolution. With the aid of a mediator and a Denver construction dispute attorney, you will be given the chance to present your argument. If both sides approach the process with an open mind, there’s no reason that work can’t continue on a project that would have otherwise had a lien placed against it or stalled as a result of a dispute. 

Related: Is Mediation Really Effective for Resolving Construction Disputes?

Consider Every Cost 

Many contractors make the mistake of thinking of the cost of a dispute in very general terms, i.e., it will take X amount of time and Y amount of money for me to recover Z amount of money. But that doesn’t account for the very real way that a construction dispute can drain your energy and resources. Before you choose litigation, consider the amount of time you will need to find and review documents in order to comply with discovery. Consider the often complicated process of filing a lien. Consider the hundreds of tiny costs and moments wasted in pursuit of litigation. 

At Cotney Construction Law, our Denver contractor lawyers understand that construction companies are trying to save costs where they can, especially during times of uncertainty. That’s why we’re doing everything we can to provide contractors with invaluable services at an affordable cost. Many of our on-demand services can actually help construction companies avoid disputes altogether. If you’re currently weighing the pros and cons of mediation, we encourage you to contact a Denver contractor attorney with our law firm who can review the specifics of your case and help determine your best course of action. Remember, it’s your time and money that you’re spending to resolve a dispute. Don’t waste your resources on a drawn-out dispute that could be resolved in less than a week. 

If you would like to speak with a Denver construction dispute lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.