IMO PROFILE 2023 ^L0 mediation Bill 2023 FINAL 20.10.2023.pdf
Construction Contract Dispute Resolution
1. 1
Robert C. NewcomerRobert C. Newcomer, Esq./LEED AP
rnewcomer@langlegal.com The Lang Legal Group LLC
http://www.linkedin.com/in/robertnewcomer Atlanta, Georgia 404.320.0990
Commercial LitigationCommercial Litigation
Business, real estate and environmental lawBusiness, real estate and environmental law
Sustainable Atlanta,
Member, Sustainable Building Taskforce,
Urban Land Institute
Chair, Technical Assistance Program
Advisory Board/Management Committee
Green Chamber of the South
Inaugural Director, Board Secretary
EduKalb, Inc.
Inaugural Director, Board Treasurer
2. 2
CONSTRUCTION CONTRACTING (Fall 2010)
Building Construction Program, Georgia Tech (November 16, 2010)
Methods of Dispute Resolution
Litigation
Arbitration
Mediation
Negotiation
Dispute Avoidance
Risk Management
3. 3
Parties
S u re ty
S u b c o n tra c to r S u b c o n tra c to r S u p p lie r
G e n e ra l C o n tra c to r
O w n e r
A rc h ite c t
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DISPUTE RESOLUTION
DISPUTE RESOLUTION - MEDIATION AND ARBITRATION.
This document contains provisions for mediation and arbitration of
claims and disputes. Mediation is a non-binding process, but is
mandatory under the terms of this document. Arbitration is
mandatory under the terms of this document and binding in most
states and under the Federal Arbitration Act. In a minority of
states, arbitration provisions relating to future disputes are not
enforceable but the parties may agree to arbitrate after the dispute
arises. Even in those states, under certain circumstances (for
example, in a transaction involving interstate commerce),
arbitration provisions may be enforceable under the Federal
Arbitration Act.
AIA General Conditions (A201-1997)
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ARBITRATION: What is it?
Private adjudication
Impartial third party
By written agreement (usually)
Parties can select arbitrator
Parties can customize process
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ARBITRATION: Basic steps
Agreement to arbitrate
Demand for arbitration
Select arbitrator(s)
Pre-arbitration meeting (scheduling/discovery)
Arbitration hearing
Post arbitration memorandum (optional)
Decision and award
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ARBITRATION: Standard Agreements
4.6 ARBITRATION
4.6.1 Any Claim arising out of or related to the Contract, except claims
relating to aesthetic effect and except those waived as provided for in
subparagraphs 4.3.10,9.10.4 and 9.10.5, shall, after decision by the Architect or
30 days after submission of the Claim to the Architect, be subject to
arbitration. Prior to arbitration, the parties shall endeavor to resolve disputes
by mediation in accordance with the provisions of paragraph 4.5.
4.6.2 Claims not resolved by mediation shall be decided by arbitration which,
unless the parties mutually agree otherwise, shall be in accordance with the
Construction Industry Arbitration Rules of the American Arbitration
Association currently in effect. The demand for arbitration shall be filed in
writing with the other party to the Contract and with the American Arbitration
Association, and a copy shall be filed with the Architect.
AIA General Conditions (A201-1997)
9. 9
ARBITRATION: Advantages
Private
Decision-maker can be knowledgeable
Process can be flexible and move fast
Can cost less
Limited grounds for appeal
Enforceability of award
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ARBITRATION: Disadvantages
Cost can be high
Lack of formal discovery:
Waiver of right to jury
Limited rights of appeal
No precedent
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ARBITRATION
Jury decision
Legal precedent
Special legal relief
Formal discovery desired
Slower/costlier strategy
Broader appeal rights
When might arbitration not be desirable?
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Finding the Right Arbitrator
Identify the ideal qualifications
Review resume and written qualifications
Seek referrals and recommendations and comments
on judgment and fairness
Request written disclosure of potential conflicts
Get it right Limited rights to appeal decision
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Arbitration tip: Contract Review
Some GAA provisions can be waived in contract
Modify contract to fit needs and circumstances
Include at least limited discovery rights
Provide for fast-track procedures
Review scope of insurance coverage
Limit award to actual and compensatory damages
Allow Arbitrator to retain jurisdiction for a time
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ARBITRATION: Hearing strategy and tactics
Focus early on key issues
Be proactive
Stipulate to undisputed facts and issues
Use joint exhibits
Consider bifurcation, interim decisions of
threshold issues and neutral fact finder
Always “on stage”
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Dispute Resolution: MEDIATION
What is Mediation?
Voluntary and non-binding process
Impartial third party “facilitates” agreement
Parties control the agreement
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MEDIATION: Standard Contracts
4.6 ARBITRATION
4.6.1 Any Claim arising out of or related to the Contract, except claims
relating to aesthetic effect and except those waived as provided for in
subparagraphs 4.3.10,9.10.4 and 9.10.5, shall, after decision by the architect
or 30 days after submission of the Claim to the Architect, be subject to
arbitration. Prior to arbitration, the parties shall endeavor to resolve
disputes by mediation in accordance with the provisions of paragraph 4.5.
4.6.2 Claims not resolved by mediation shall be decided by arbitration which,
unless the parties mutually agree otherwise, shall be in accordance with the
Construction Industry Arbitration Rules of the American Arbitration
Association currently in effect. The demand for arbitration shall be filed in
writing with the other party to the Contract and with the American
Arbitration Association, and a copy shall be filed with the Architect.
AIA General Conditions (A201-1997)
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MEDIATION: Standard Contracts
4.5 MEDIATION
4.5.1 Any Claim arising out of or related to the Contract, except Claims relating to
aesthetic effect and except those waived as provided for in Subparagraphs 4.3.10,
9.10.4 and 9.10.5 shall, after initial decision by the Architect or 30 days after
submission of the Claim to the Architect, be subject to mediation as a condition
precedent to arbitration or the institution of legal or equitable proceedings by
either party.
4.5.2 The parties shall endeavor to resolve their Claims by mediation which,
unless the parties mutually agree otherwise, shall be in accordance with the
Construction Industry Mediation Rules of the American Arbitration Association
currently in effect. Request for mediation shall be filed in writing with the other party
to the Contract and with the American Arbitration Association. The request may be
made concurrently with the filing of a demand for arbitration but, in such event,
mediation shall proceed in advance of arbitration or legal or equitable proceedings,
which shall be stayed pending mediation for a period of 60 days from the date of
filing, unless stayed for a longer period by agreement of the parties or court order.
AIA General Conditions (A201-1997)
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MEDIATION
What Does a Mediator Do?
Convenes
Facilitates communication
Encourages negotiation
Identifies/creates opportunities for resolution
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MEDIATION
Why consider mediation?
Quick and inexpensive
Highly effective
Resolutions are durable
Private and confidential
Protects relationships
Low risk: Parties retain decision-making control
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MEDIATION
Selecting a Good Mediator:
Identify the ideal qualifications
Review resume and written qualifications
Seek referrals and recommendations and comments
on judgment and fairness
Request written disclosure of potential conflicts
Consider effectiveness with the other side(s)
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MEDIATION: Tips
Customize the process
Select the right mediator and engage them
Identify and include decision makers
Know your case strengths and weaknesses
Present a powerful summary
Communicate the strengths of your case
Listen
Identify “win-win” settlement options
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MEDIATION: Settlement agreements
Mediation is voluntary and non-binding
Settlement may (should) be enforceable
Document terms of settlement before leaving
Include enforcement provisions
Incorporate “simple” dispute resolution process
Protect relationships
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DISPUTE RESOLUTION: NEGOTIATION
Most common form of dispute resolution
Most cost-effective and durable
Most likely to preserve relationships
Available anytime, anywhere, to anyone
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DISPUTE RESOLUTION: AVOIDANCEDISPUTE RESOLUTION: AVOIDANCE
Failure to identify risk
Failure to properly assess and/or manage risk
Lack of clear and agreed-upon expectations
Failure to meet expectations
Other . . . ???
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RISK MANAGEMENTRISK MANAGEMENT
Introduction
Risk Assessment and Management
Construction Contracting
Process
Risk Management
Key Issues
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RISK: INTRODUCTIONRISK: INTRODUCTION
Risk is a measure of future uncertainties. . .
It is tough to make predictions,
especially about the future.
Yogi BerraYogi Berra
Risk management is the overarching process that
encompasses identification, analysis, mitigation
planning and plan implementation, and tracking.
Risk Management Guide for DOD AcquisitionRisk Management Guide for DOD Acquisition
August 2006August 2006
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RISK ASSESSMENT AND MANAGEMENTRISK ASSESSMENT AND MANAGEMENT
Risk Assessment Principles
Risk Management Process
Risk Analysis
Risk Mitigation
Go/No-go decision
Project Risk Reviews
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RISK ASSESSMENT: PRINCIPLESRISK ASSESSMENT: PRINCIPLES
The impossible sometimes happens;
the inevitable sometimes does not.
Daniel Kahneman, Nobel Prize EconomistDaniel Kahneman, Nobel Prize Economist
There are things we know,
things we know we don't know,
and things we don't know we don't know.
Donald Rumsfeld, Secretary of DefenseDonald Rumsfeld, Secretary of Defense
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~ Is the most cost effective,
~ Assigns each risk to the party that is best
equipped to manage and minimize that risk,
~ Recognizes the project’s unique
circumstances.
Construction Industry Institute
The Ideal ConstructionThe Ideal Construction
ContractContract
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The Construction Contracting ProcessThe Construction Contracting Process
Steps from bid to completion and approvalsSteps from bid to completion and approvals
The Contract as a Risk Management ToolThe Contract as a Risk Management Tool
Contract: Key IssuesContract: Key Issues
Project Risk Mitigation PlansProject Risk Mitigation Plans
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The Contract as a Risk Management ToolThe Contract as a Risk Management Tool
1. Accept
2. Minimize
3. Limit
4. Transfer
1. Accept
2. Minimize
3. Limit
4. Transfer
CONTRACONTRA
CTCT
SUBCONTRASUBCONTRA
CTCT
SUBCONTRACTOR,
SUBCONSULTANT OR
SUPPLIER
Risk
OWNER ARCHITECT, CONTRACTOR,
CONSTRUCTION MANAGER
or DESIGN-BUILDER
Risk
38
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Risk is a choice rather than a fate.Risk is a choice rather than a fate.
Peter BernsteinPeter Bernstein
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Robert C. Newcomer, Esq./LEED AP
rnewcomer@langlegal.com The Lang Legal Group LLC
http://www.linkedin.com/in/robertnewcomer Atlanta, Georgia 404.320.0990
Commercial Litigation
Business, real estate and environmental law
Sustainable Building Taskforce,
Sustainable Atlanta
Urban Land Institute:
Chair, Technical Assistance Program
Board/Management Committee
Green Chamber of the South:
Inaugural Director, Board Secretary
EduKalb, Inc.
Inaugural Director, Board Treasurer