Contents Legal
MEDIATION
MEDIATE, DON’T LITIGATE Why Mediation Works
D
isputes are unfortunately a “fact of life” in the building and construction industry. Mediation is a “circuit breaker” that can be used to deal efficiently and cost effectively with disputes when they arise. There are at least four reasons why mediation works. These are: • limitations of the law; • involvement of a specialist dispute resolver; • search for creative solutions; • financial imperatives. The limitations of the law The typical response to the emergence of a “dispute” is usually to take the advice of lawyers. While this may be an appropriate response, the limitations of this as an exclusive strategy warrants closer consideration.
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MBA NSW | Issue Three | June/July 2018
Lawyers, by virtue of their training, unavoidably consider the “instructions” as relayed to them by their clients, through a legal “prism”. That “prism” is made up of the lawyer’s past experience in dealing with such matters, and their knowledge of the law. A client’s version of events is unavoidably viewed by lawyers through this “prism”. The only “light” which typically passes through the prism are those “facts” which the person briefing the lawyer considers to be “important”. That information usually then forms the basis of the lawyer’s initial “advice”. When considering a client’s version of events through the “legal prism”, lawyers will typically apply legal principles with which they are familiar. For example, when dealing with a contractual dispute, a lawyer may perhaps look for a “breach” of a warranty or condition which might give rise to “damages”. Those damages
are typically the monetary cost of placing the aggrieved party back in the position which they would have enjoyed, except for the occurrence of the “breach”. The law is a specialist field that pays scant regard to the practical realities of the building industry. Builders are not usually lawyers, nor are most lawyers builders. What a builder thinks to tell a lawyer in initial conferences may not be information which eventually turns out to be most relevant in a subsequent legal forum. It can take many months, in the course of legal proceedings, before all the relevant “facts” emerge. Often this can eventually have the effect of putting the clients “story” and “prospects” in a far less favourable light than when legal advice was first sought. This is hardly an efficient process or desirable outcome. Real resolution of a dispute involves more than
