Posts Tagged ‘Alternative Dispute Resolution’

Tips for Mediation Success

Measure SuccessHere at Wolfe Law Group, LLC, I mediate disputes many types. The disputes I usually handle are construction, collections, insurance claims, contracts and leases . Often times I am asked, what it takes for a mediation to be successful and if there is a trick to getting a successful mediation. Normally, it all depends on the parties frame of mind.

What Is A Successful Mediation?

The number one measuring stick and overall way the legal industry measures mediation success is whether the case settles, due to the mediation. This typically is a clean way for all parties to know whether the mediation was a success.

There are other types of successful mediation, whereby the parties agree to resolve some of the disputed issues but not all of them. In my mind, these partial settlements are a success.

Finally, I believe that just about every mediation that is completed and the parties work through the entire process is a success. Mediation is a unique tool that lets the parties prepare and evaluate the case strengths and weaknesses, before getting into a trial setting. There is no judge or decision maker, therefore parties as well as their attorneys can see what a neutral third party thinks of the merits. This can be very helpful and a real eye-opener for clients.

Another success story that comes out of working through the mediation process is knowing what the opposition is willing to do to resolve the dispute. You can determine whether you have someone who will work to get a resolution or an adversary who is irrational.

There Are A Number Of Factors That Go Into A Successful Mediation

There are many factors which can lead to a successful mediation. Each case is different therefore the importance of success factors will vary from dispute to dispute.

Ripeness is a big issue when it comes to whether a mediation will be successful. Some times its impossible to know if your matter is ripe until you engage in the mediation process, due to unexpected factors which may arise. Further, many attorneys will jump into mediation in order to get a quick deal. This practice is not beneficial to the client or the outcome of the dispute.

Attitude of the parties is another huge factor when it comes to the success of a mediation. There are disputes where all sides are irrational and cannot make a deal. There are other disputes when its just one party who is creating an impasse. A good mediator will work on parties to encourage positive attitudes with regard to making a deal. The mere fact that the parties agreed to come together, is a sign that reason is being applied and there’s a possibility for a deal.

Having all parties actually listen and work through all of the issues presented by each other party. Many times a party will only want to discuss its issues and not listen to what other are saying. This breakdown in the communication process can be very problematic for the mediation process.

Other Sources For Mediation Information

Mediation is quickly becoming one of the go-to methods for alternative dispute resolution. Its been around for a long time and will continue to be here because of its cost-effective alternative to standard litigation. There are a number of good sources which talk about successful mediation. NOLO.com has a good article with Ten Rules for Success. Marc Engel has a similar article with good information entitled 8 Steps to Make Mediation Successful.

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Posted in:     Arbitration & ADR, Construction News  /  Tags: , ,   /   1 Comment

Construction Contracts: Mediation Is A Great Alternative To Litigation

Mediation bigstock-Attorney-at-Law-sitting-at-des-49285283 copyMediation and Construction Law are two of my favorite topics to discuss. These are my favorite aspects of the practice of law. Every construction law dispute I encounter starts with the premise of getting contractors paid. No matter the dispute, the underlying factor is withholding of money along the hierarchical chain of characters.

Owners need to get cash from the lenders. General Contractors need to get progress payments from the Owner. Subs are always waiting on the GC to pay out. Suppliers provide goods on credit with the hopes of getting paid once the other parties take their share. There are small margins for error and high possibility of dispute.

With such small percentage of money actually going to profits its no wonder owners, general contractors, subcontractors and suppliers cannot afford expensive litigation. There are efficient and cost effective means to settle disputes without having to tee it up in the courts, Mediation and Arbitration. For the purposes of this blog, I will be speaking to the more flexible of the two forms of alternative dispute resolution methods, Mediation.

Do Construction Contracts Contain Mediation Clauses?

It depends on the contract. Many American Institute of Architects (AIA) form contracts will allow for an option to include both a mediation and arbitration clause for alternative dispute resolution. If you are unsure if your contract has  mediation clause you should look to see if there is some type of language like the following provided by the American Arbitration Association (AAA), who is the leader in the arbitration and mediation space.

If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Construction Industry Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure.” AAA Construction Industry Arbitration Rules and Mediation Procedures (pg 14).

There are many variations on this type of clause. Courts are very keen on upholding mediation clause language because courts favor resolving disputes through other means.

Construction Disputes Settle With Mediation

Some disputes will never settle. The parties are so entrenched to a position that they become irrational and will not compromise. The construction industry is different. Contractors tend to want to continue doing business and therefore do not want to burn bridges.

I have personally been witness to numerous construction disputes setting through mediation. The parties agree to meet with a neutral third party, the mediator, and go through the process until a compromise is reached. Conventional wisdom states that the best settlements are those where both sides leave unhappy.

Construction disputes are no different. Each party negotiates some give and take until a compromise is reached. I see it all the time. Have your attorney put mediation clauses in your company’s contracts. Do not sign contracts unless they have a mediation clause. Finally, even if there is not a specific clause mandating mediation, you can still mediate! All that is required are two parties who want to solve a dispute.

 

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Posted in:     Arbitration & ADR, Construction News, Litigation  /  Tags: , , , , , ,   /   2 Comments

Mediation! New Service Available at Wolfe Law

Seth J. Smiley, partner at Wolfe Law Group, LLC and author of ConstructionLawMonitor.com is now a formally trained mediator. New Orleans just hosted the AAAU’s (American Arbitration Association University), Essential Skills for the New Mediator workshop in downtown, hosted by Neil Carmichael.

Why would parties want to mediate a dispute instead of going to court? That answer is easy, yet has many factors. The most important are that mediation is less expensive and much more efficient compared to litigation. But the most important factor is that the parties control their own outcome, rather than a group of strangers (jury).

So if you are in a dispute and are looking for an economical, logical and swift conclusion that is mutually agreeable between you and your adversary, then mediation may be just what you are looking for. Contact the Wolfe Law Group, LLC for more details.

Posted in:     About Our Services, Arbitration & ADR, Business Matters, California, Collections, Construction News, Disputes, Green Building, Insurance, Litigation, Louisiana, Oregon, Washington  /  Tags: , , , , , , , , , , , ,   /   1 Comment

Legal Solutions in a Tough Economy

In October 2008, Wolfe Law Group’s Scott Wolfe was a featured speaker at Dillard University’s Fall Contractors’ Forum. Scott spoke to the attending contractors about legal solutions for their businesses in a tough economy.
Among the items discussed were the importance of good collection procedures, the use of Alternative Dispute Resolution and the proper use of lien laws.Wolfe Law Group prepared some materials for the presentation, outlining the discussion and providing the contractors with legal articles related to the topics and even a collections letter template. The document is now available online for viewing and downloading through JD Supra here.

Posted in:     Collections, From The Experts, Mechanics Lien  /  Tags: , , ,   /   Leave a comment

Part Two: Now What? Three Simple Principals To Mind When Your Involved with a Costly Dispute.

The construction industry is riddled with risk and disagreements, and some say it’s only a matter of time before a construction organization finds itself in litigation. Regardless of its certainty, litigation is a fact of business and has the potential of costing your organization thousands, hundreds of thousands or millions.

Accordingly, your business wants to weather the litigation storm as painlessly and quickly as possible. Here are three principals to mind if your construction company is facing litigation.

1) Settlement Should Always Be An Option
If the dispute is in litigation, there were likely settlement attempts before formal filings. Simply because these pre-litigation settlement efforts have failed, however, does not mean post-litigation settlement efforts are without utility. To the contrary, the reality of litigation often hits parties only after filing and can be a powerful influence to settle.

Attorneys oftentimes are scorned by the public for their desire to settle cases rather than litigation. The practice, however, is not the result of laziness or a fear of the courtroom. To the contrary, attorneys are usually looking out for the best interests of their clients – and in most cases, it’s in all parties’ best interest to settle the case.

Litigation of all types is expensive. The associated legal fees, expert fees and court costs associated with taking a case to trial is going to be a minimum of $10,000 – $15,000.00, regardless of the amount in dispute. The more complex a case, the more expensive the litigation – oftentimes costing parties hundreds of thousands or millions of dollars.

As such, parties should make objective reviews of their legal positions and consult with attorneys to discuss the challenges of their case, its possible exposure, and estimated legal costs.

Judges and mediators often say, “a good settlement is when both parties leave unhappy.” While unhappiness is not the most pleasant end to your legal dispute (in which you may be emotionally and personally invested), it may be the best. Depending on the associated risk of the case and your company’s exposure, full-blown litigation may result in a much worse scenario than a mediocre settlement.

2) Explore Alternative Dispute Resolution
It’s never, ever too late to explore alternative dispute resolution options. In the past, parties have chosen to mediate or arbitrate their differences even on the eve of trial – and successfully so.

In the event of litigation or arbitration, however, you shouldn’t wait that long to explore the possibility to resolving the parties’ differences through mediation or some other less expensive resolution program.

Mediation may be a great alternative to litigation since it is entirely driven by the will of the parties, voluntary and less expensive than a formal dispute. However, mediation is not free (depending on complexity of your case and length of mediation, it may cost between $2,500 and $25,000, or more). Accordingly, you want to agree to participate only if both parties come to the table in good faith to settle the case. Both parties, in other words, should be prepared to have a flexible settlement discussion.

Settlement discussions within mediation are confidential, allowing the parties to discuss details of the case frankly and to exposure each other’s weaknesses. Furthermore, in the event mediation is not successful, it is a great way to prepare your for trial and to gain a stronger understanding of your opponent’s position.

See: ADR Articles on Construction Law Monitor

3) Good Counsel is Priceless
The type of attorney you’ll need to most effectively and least expensively litigate your claims will depend on your desires and circumstances. And unfortunately, there are so many shades of desire and types of circumstances that your company may face in the event of litigation.

A good counselor will review your claims, defenses and financial health to determine the best course of action for your company. While it’s always important for an attorney to be a qualified litigator, “being right” or “litigating your claim” might not be best for your business. There are a number of factors to consider before setting forth on your litigation course.

Counsel should review the risk associated with your claim, your company’s financial exposure and your ability or desire to go through to trial to properly advise an organization on its options to proceed.

Perhaps it is in your company’s best interest to push the matter towards trial as rapidly as possible….but that it not always the case. Mediation may be a better option, or some other sort of settlement procedure.

In short, it’s important to have a counselor to give solid and objective advice about your company’s legal position and options. Your selection of legal counsel is perhaps the most important component of your claim. As such, be careful to choose wisely.

See: Is Your Counsel Helping or Hurting?

Posted in:     Litigation  /  Tags: , ,   /   1 Comment