Why mediate? Mediation in construction disputes replaces litigation uncertainty with the potential for negotiated certainty on what matters most: cost, schedule, and project continuity.
Is mediation worth considering? Yes. When approached deliberately—arriving ready to settle, selecting the right mediator for the dispute, engaging experienced and prepared counsel, and timing the mediation strategically—mediation can resolve complex technical issues faster, more creatively, and more cost effectively than continued litigation or arbitration.
Mediation uses a neutral third party to help resolve construction disputes through a voluntary process—no one is forced to accept anything. Parties may agree in their contract to mediate disputes or decide to try it after a dispute arises. Before starting, the parties typically sign a brief agreement covering process, confidentiality, mediator identity, length or proceedings and cost-sharing. Ideally, attendees should have authority to settle on the spot. As construction law mediator Howard Wise has noted, mediation can proceed quickly, often alongside direct negotiations. It works best when parties remain less adversarial and are willing to compromise.1
The effectiveness of mediation depends on many factors, but three large contributors are: the parties’ willingness to resolve the dispute, selecting the right mediator, and engaging the right counsel.
- The Parties’ Willingness to Resolve the Dispute
Mediation gives construction parties the certainty and control absent in litigation or arbitration. It is usually a one-time opportunity to resolve the dispute in short order, rather than a months-long exchange of correspondence. Accordingly, parties should arrive ready to negotiate in good faith with a realistic assessment of their best possible outcome, including delay, defect, and cost-overrun issues.
The objective is to resolve the dispute - there is no “winning” in mediation. Both parties must accept that the plaintiff will likely have to settle for less than claimed and the defendant will likely have to pay more than desired. A differing site conditions dispute illustrates the point. A contractor who encounters unsuitable subsurface soils requiring costly remediation may accept compensation for direct costs without delay damages in exchange for the owner's prompt approval of the revised foundation design and commitment to fund the additional work on a time-and-materials basis. In this case, neither party “wins,” but both avoid protracted expert battles over the adequacy of pre-bid geotechnical information and costly litigation.
The parties must put their best foot forward while remaining strategic about disclosure if the matter does not settle. Sometimes parties attend mediation merely to satisfy a contractual step before litigating or to learn the opposing party's case rather than settle. In such circumstances, measured disclosure of documents and positions becomes critical to preserve leverage. It is advisable to consider this might be the case with the counterparty in your matter as this will impact your overall mediation strategy.
- Selection of a Suitable Mediator
The effectiveness of mediation depends partly on selecting a mediator with the right approach. Some mediators focus on costs and risks to keep communication open. Others emphasize the facts and direct the parties’ attention to key issues. Still others use structured processes, acting as messengers and emphasizing the certainty parties lose if the matter does not settle. An experienced mediator will recognize when to convene the parties collectively versus privately.
A concrete-defect case shows how industry fluency helps. Where cracking may stem from design, placement, or curing, an industry-savvy mediator can frame a resolution that funds targeted remediation and apportions costs among the owner, the design team, and the concrete trade based on testing milestones rather than positional blame-shifting.
Furthermore, construction disputes are highly technical. A mediator with strong construction industry experience and construction law expertise can translate technical issues into practical settlement options and build trust with each side — owner, contractor, and key subcontractors — to facilitate compromise.
An effective mediator will maintain focus on the benefits of mediation throughout the process, emphasizing the foreseeable outcome of settlement versus the unforeseeable outcome of litigation or arbitration.
- Selection of Effective Counsel
Selecting experienced, prepared counsel is critical. Experienced counsel will bring contentious information to the mediator’s attention confidentially, allowing the mediator to refocus the other side on the weaknesses of their case. Consider a subcontractor acceleration claim. If contemporaneous notices are weak, counsel can leverage mediation to secure compensation, which would in turn avoid the evidentiary risks of a formal acceleration claim while disclosing only what is necessary to facilitate settlement.
Effective counsel will explain the process to the client, including strategies the other side may use, so the client knows what to expect and can adapt if new information arises. In addition, counsel must be forthcoming about the likelihood of success at trial or arbitration. A client aware of case weaknesses is in a better position to make an informed settlement decision.
Finally, counsel should recognize the appropriate timing for mediation. If proceedings are far from the hearing phase, parties may be less inclined to settle because cost pressures feel remote. However, mediation should occur before incurring substantial pre-hearing costs.
In sum:
- Arrive ready to settle, not “win”: Come prepared to negotiate in good faith and make a realistic assessment of likely trial/arbitration outcomes, costs, and risks.
- Plan for compromise and set a bottom line: Expect that plaintiffs may accept less than claimed and defendants may pay more than desired; the decision to settle remains yours.
- Select the right mediator for your case: Match mediator style to your dispute and team, and leverage industry expertise for construction matters—preferably mediators versed in construction law, project delivery, and claims—to optimize joint sessions or private caucuses.
- Build trust and stay outcome-focused: Trust enables candid discussion of true interests and movement toward compromise; keep sight of mediation’s certainty versus litigation’s uncertainty and cost.
- Retain experienced, prepared counsel: Where possible, engage construction disputes counsel who knows your bottom line, can highlight construction-specific leverage points (e.g., scheduling and change-order dynamics), and ensures you understand process, tactics, and trial/arbitration risks.
- Time the mediation wisely: Not too far from the hearing (so costs/risks feel real), but before incurring heavy pre-hearing expenses.
