Is Mediation gaining attention within the construction Industry?

With mediation being the easiest and cheapest form of dispute resolution, it is still being under used within the construction industry. In most other disputes, parties are required to consider other forms of Alternative Dispute Resolution (ADR), including mediation. This is due to guidelines including the Practice Direction on Pre-action Conduct and Protocols and the Employment Tribunal rules, which actively require parties to use ADR routes, such as mediation, wherever possible.

Despite ADR being encouraged before attending court or during proceedings, adjudication remains the most common method of dispute resolution within the construction industry according to the Arcadis 2022 Global Construction report. During the Global pandemic in 2020, construction disputes became more common and costly with the adjudication route still considered more appropriate due to its binding nature.

Prior to the Housing Grants, Construction and Regeneration Act 1996 arbitration and litigation was the only options for construction disputes. The act introduced adjudication to allow for quick resolutions at a lower cost but this has now become increasingly expensive. With this in mind, could mediation and negotiation be the way forward for construction disputes?

Whether mediation is not widely known or there is a lack of emphasis on this type of ADR, mediation is becoming more significant in construction disputes, where it is considered appropriate, but the main barrier is still the lack of trust between the parties that any agreement made would be enforceable. However, due to the expense of adjudication and with COVID-19 disrupting the normal ways of working, there has been a change of attitudes and a shift towards mediation and negotiation. The pandemic helped to highlight the deficiencies of adjudication and it seems that attitudes are more positive now towards mediation. The Joint Contracts Tribunal (JCT) has introduced within their Standard Contracts, that where direct negotiations cannot resolve a dispute, each party shall give 'serious consideration' to any request to refer to mediation. There has also been many calls for reform included greater collaboration between parties, the use of representatives from both parties and mandatory mediation.

For attitudes to change and for mediation to prosper, access to a good mediator is essential.

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