Mediation is a powerful tool, but it’s not a silver bullet. Sometimes, despite everyone’s best efforts, parties cannot reach a settlement. Understanding what comes next—and how to prepare—can help construction clients navigate these situations strategically.
Why mediation might fail.
Disputes involving complex facts, deeply entrenched positions, or high emotional stakes can stall in mediation. Sometimes one party is not fully committed, or the timing is off. In construction, where multiple parties and shifting responsibilities are common, aligning interests can be difficult.
Next steps after mediation.
If mediation doesn’t resolve the dispute, the parties have several options. Litigation or arbitration are the most common next steps, depending on the contract and circumstances. Both offer binding decisions but come with increased costs, time, and less control.
Clients should review their contracts carefully to understand required procedures and deadlines for pursuing other dispute resolution methods. Counsel can help develop a clear strategy that balances risk, cost, and business objectives.
Alternative dispute resolution options.
Aside from arbitration and litigation, parties might consider:
- Mini-trials: A structured settlement process involving presentations to senior executives or neutral advisors who provide non-binding recommendations.
- Early neutral evaluation: A neutral expert assesses the strengths and weaknesses of the case to facilitate settlement.
- Summary jury trials: A mock trial before a jury that gives parties a sense of likely outcomes.
These options can sometimes preserve flexibility and encourage settlement without the full expense of trial or arbitration.
The takeaway.
Failure to settle at mediation is not the end of the road. Construction clients who understand their options and plan accordingly can still control costs, risks, and outcomes. Mediation should be viewed as one step in a broader dispute resolution strategy—one that, even when unsuccessful, provides valuable information and momentum for what comes next.