Construction Mediation at the Extremes - Peaks and Pitfalls

Earlier this year the New York State Supreme Court asked me to mediate a dispute between a developer and a contractor arising out of a SRO facility's conversion to offices and apartments on New York's Upper West Side. Four weeks later the parties, their witnesses, attorneys and I were seated around an argument weary conference table in a small, stuffy jury room hidden away in the bowels of the Supreme Court in downtown NYCity.

Supreme Court mediations in NYCity are put on an accelerated schedule, sandwiched between the party's pre-trial appearances. Preparation by the mediator must follow the dictates of time so facilitative mediation is the rule. A mediator's subject matter expertise is always a plus, but especially in multi-faceted NYCity construction cases where such time constraints limit research into the subject matter and issues in dispute. Mediation briefs are hastily put together - sometimes no longer than a few pages - and not usually in the mediator's hands until just days before the mediation takes place.

Another limitation on the mediator is the Court's "budget" for the mediation. Zero! Mediators come free of charge compliments of the New York court system (and the mediator).

Cases that come down from the New York State Supreme Court in Manhattan are often "down-and-dirty." The mandatory mediation provision in the Court's ADR Program supplies the New York mediation community with a wide variety of cases of every size and shape. Most are assigned by clerks under pressure to free up the judge's calendar. Many are too premature for meaningful settlement discussions. Sometimes the parties and their lawyers are reluctant participants and enter with a "show me" indifference. So the success rate - about 60% - is not to be compared with that for typical private voluntary commercial mediations - almost 100%** - where the dispute is ripe for settlement and the players eager to engage in negotiation.

But sometimes the stars are in alignment at the Supreme Court and it's a mediator's delight with never a dull moment.

So as the attorneys were putting the finishing touches on a million-dollar settlement agreement, the developer surprised me with: "I did all the work. What am I paying you for?" I was eager to tell him two things:

First, he was shocked when informed that my services were free of charge. Neither attorney, as is too often the case, had so advised his client of the court's "benevolence."

Second, I smiled as I told him that I took his "work" comment as a compliment and explained why:

I had, in fact, been "working." At the outset I had interrupted the developer's monitoring of his BlackBerry and brought him into the discussion that followed the opening statements by the attorneys. Sometimes that's all it takes. A suggestion here, a question there - just enough to keep the parties engaged and the back-and-forth going in the right direction. Facilitative mediation at the max is minimal intrusion and comment by the mediator - the less the mediator says, the better - as long as the parties are on track for settlement.

And I had also done "work" up-front. Through telephone conversations with the attorneys, I knew they knew their cases. Even though the parties' demands were light years apart it was clear their clients were ready to negotiate. I verified that the key people would be present, identified who the dealmakers would be and insisted that they be there for the mediation, not a "phone call away," and no in-house counsel in their stead. (I made that mistake once.) From their brief briefs and meager document submittals (supplemented after requests by the mediator) I knew enough about their positions on the issues to listen intelligently once the the discussion got underway and prepared to participate whenever necessary.

But soon after the developer got involved in the discussion between his project manager and the contractor, he took over. Before long he initiated a series of caucuses ("Let's go out in the hall"), one-on-one with the contractor and then one-on-two when the superintendent joined them. Neither the attorneys, nor I, ever left the table to join any of the caucuses. And I didn't initiate any. By the end of the day they had a deal. The attorneys were working on the settlement agreement when he made his glib remark.

This was probably not the first time that a party thought that they alone had saved the day at the end of a successful mediation, wondering, like the developer, what the mediator had done. All of a sudden a deal is on the table and participants don't realize how it really got there and few, unlike the developer, give it a second thought. The most satisfying facilitative mediations are those where the parties do all the work and the mediator just keeps things on track. The parties negotiate the settlement, structure the deal themselves, sign off on it and voice a commitment to seeing it through. Those kinds of deals stand up.

**Colorado