United States: Mediation Offers Plenty Of Benefits Over Construction Litigation

Last Updated: April 25 2018
Article by Kenneth M. Florey and Matthew J. Gardner

As all construction lawyers know, construction projects regularly result in some sort of dispute: payment claims, defects in the design or construction of the work, or even personal injuries that occur on the job.  Construction claimants then must choose the appropriate dispute resolution process to pursue their claims. While certain factors such as statute of limitations, mandatory arbitration clauses, or jurisdiction requirements like the Illinois Court of Claims Act dictate when and where a claimant must file its claim, at some point construction litigants should evaluate whether to retain a third-party neutral to mediate the case. Although a successful mediation and settlement inherently requires the parties to compromise and move from their positions, the efficiency of mediation offers win-win opportunity for all parties and their attorneys, especially compared to the alternative of pursuing a claim all the way through trial.

 Some of the biggest problems with litigating a construction case in state or federal court are the risks, cost and time of proceeding through discovery and trial. Because of these concerns, industry-specific form contracts require mediation as a precondition to litigation. For example, Section 15.3.1 of the AIA A201-2017 General Conditions of Contract for Construction requires "[c]laims, disputes, or other matters in controversy arising out of or related to the Contract ... shall be subject to mediation as a condition precedent to binding dispute resolution." Although form contracts are often modified, the preference for mediation and concern for litigation costs should not be disregarded.

For large construction projects, multiple parties are usually involved, including the owner, design and engineering professionals, general contractor, possibly a construction manager or owner's representative, material suppliers, and lower tier trade contractors. Many of the parties will not have contractual privity with the other parties on the project, but will rely on those parties to timely perform their work or contractual duties, including payment to other parties. When a complaint is filed, it may take an entire year of litigation simply to get all the parties served and responsive pleadings filed. For both defect and payment claims, the parties' performance or breach of contract will be at issue. It may be unclear if the cause of any defect arose from faulty construction, negligent design or surveying, or defective material. Oral and written discovery for such claims can be time consuming and the claims may require experts to prove liability, all of which is expensive and can drain a party's resources and lead to client frustrations often times directed to their own attorneys.  An attorney's nightmare is to win the case at trial but lose an angry client after the fees are billed.

Mediation benefits all parties in any size construction dispute, either before or after completion, by reaching a final resolution quickly and preserving the parties' resources. In exchange, the parties must concede some of their claims and defenses. Still, given the weight of attorneys and experts' fees in complex construction cases, the economics of mediation and settlement often outweigh taking a claim to trial. This is particularly true in construction cases with multiple questions of facts, requiring the parties to weigh the risk that a jury or the judge will answer those questions of fact in favor of the opposing parties.

For smaller construction disputes, mediation is even more practical. Although there may be fewer parties involved with a smaller project, each status conference, deposition, or other legal expense consumes a larger percentage of the anticipated value of a claim or defense than compared to larger disputes. Even if the plaintiff prevails on its entire claim at trial, or the defendants obtain a defense verdict, the amount of money recovered or saved through defense may be dwarfed by the attorneys' fees and litigation costs, let alone the time and inconvenience that a party suffers by going through trial.

In addition to the financial considerations, lawyers should also consider the "soft" costs that their clients incur through litigation. For project owners, the real estate may be encumbered with a lien until resolution of the dispute, thus impeding any potential sale. General contractors, architects, and engineers may have to expend significant time searching and reviewing the project file for relevant documents to respond to discovery. And subcontractors and material suppliers may also suffer further opportunity cost by not having at least some of the payment received.  Regardless, all parties must continue to keep the project and any disputed payments on their balance sheet and will need to spend valuable time preparing for trial.

The timing of mediation can also be used strategically to benefit all parties. If the claim is relatively minor, and liability relatively clear, the parties may consider mediating the dispute before a lawsuit is filed. If the claim is more contentious, with more money at issue, filing the lawsuit can give all of the parties an incentive to participate in the mediation process, knowing that the litigation expenses begin to run if the mediation is unsuccessful. The parties may not want to mediate until after initial written discovery is completed to better evaluate the opposing parties' claims and defenses. If the parties to a lawsuit have solidified their positions and are unwilling to consider mediation, many circuit courts, including the Circuit Court of Cook County, have mandatory mediation programs allowing a judge to order the case to mediation. See Circuit Court of Cook County Local Rules Part 20 and Part 21. These programs require parties to mediate in good faith, but do not require the parties to reach an agreement.

Although as attorneys we find the adversarial process of litigation challenging and strive to prove that our clients "are right," we must also consider the costs our client's incur in litigation. By recommending and facilitating mediation, and vigorously representing clients during the mediation process, attorneys can provide an outcome that benefits their clients and themselves significantly better than trial.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Berman Fink Van Horn P.C.
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Berman Fink Van Horn P.C.
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions