Consider Using An ADR Process In Your Next Construction Or Real Estate Dispute

If You Are Involved In A Construction Or Real Estate Dispute, Consider Using Mediation Combined With Arbitration As An Efficient And Cost Effective Alternative To Litigation That Offers A Final And Binding Resolution To Your Dispute.

Mediation is a voluntary proceeding where the parties to a dispute negotiate a resolution with the assistance of a third-party neutral. It is a flexible, cost-effective process that affords parties an opportunity to control the outcome of their dispute. Due to the voluntary nature of mediation, however, the drawback is that it provides no finality if the parties do not reach an agreement on all disputed issues. When mediation is combined with arbitration, a proceeding where the parties present their case to a neutral who decides the outcome for them, the parties get the best of both processes.

If you are involved in litigation, or inclined to avoid litigation, you may wish to discuss the following proceedings with your lawyer as an efficient, cost-effective means of resolving your dispute. You may also wish to discuss including one of these provisions in your construction or real estate contract as a required method of dispute resolution.

Med – Arb

Med-Arb begins with a standard mediation. When the parties feel they have reached an agreement on as many issues as possible, they sign a settlement agreement, and then proceed with arbitration. There are two forms of Med-Arb. The first utilizes the same neutral to arbitrate the unresolved issues. The second, and more common form, uses a mediator and a separate arbitrator is either pre-selected or the parties wait to select the arbitrator until the issues for arbitration have been narrowed. The major advantage of Med-Arb is the arbitration will only be necessary to handle the unresolved issues. Thus, the discovery process and presentation of evidence is more limited and cost-effective. When Med-Arb form one is utilized, the drawback is the parties may not fully confide all relevant information for fear of it being held against them at arbitration. Nonetheless, if cost and time are important or if the issues are not complicated, form one, utilizing the same person as both mediator and arbitrator, is a simple, efficient and cost effective process.

Binding Mediation

Binding mediation is similar to Med-Arb. The parties start out in a typical mediation. When they have reached agreement on as many issues as possible, the parties sign a settlement agreement. The mediator will decide all remaining issues, if any. The mediator’s decision will be written up in a separate settlement agreement for the parties to sign. Both agreements are binding on the parties according to a Binding Mediation Agreement they signed before the process started. If any party is unhappy with the decision or refuses or neglects to sign either of the settlement agreements, the terms set forth in the agreements are nonetheless binding in accordance with the terms of the Binding Mediation Agreement. Binding mediation is particularly useful in on-going construction projects because it provides a swift and cost-effective resolution resulting in very little or no delay in construction.

Arb – Med

The parties select an arbitrator and a separate mediator. The process begins with a standard arbitration proceeding, but the arbitrator does not issue an award. Instead, the parties proceed with mediation in an effort to settle the same issues covered in the arbitration. Thereafter, the mediator informs the arbitrator of all the settled issues. The arbitrator then issues an award with respect to the unresolved matters. The advantage of Arb-Med is the parties will be more inclined to realistically evaluate their case when they proceed with mediation having had the opportunity to evaluate the evidence, the credibility of the witnesses and the performance of counsel at the arbitration. The drawback is that Arb-Med is more costly than other forms of ADR.

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