California construction disputes and mediation: FAQs

Construction disputes may require mediation for resolution.

Mediation is a legal process that is designed to aid disputing parties in coming to a prompt resolution. It is an alternative process, focusing on negotiations between parties as opposed to litigation within a courtroom. Those who find themselves considering mediation likely have a number of questions. Some of the more common include:

• What is mediation?
• Is mediation required?
• What are the benefits and risks of the mediation process?

Having the answers to these questions can help those who are considering mediation to have a better understanding of how the process works.

What is mediation?

Mediation is defined under California state law as:

[A] process in which a neutral person or persons facilitate communication between the disputants to assist them in reaching a mutually acceptable agreement.

Although not required, it is generally wise for both parties to have legal representation during this process. Having an attorney present can help to better ensure that each party’s interests are protected.

It is also important to note that everything discussed and presented during the mediation process is confidential. There are very few exceptions to this rule. State law requires that this information remain confidential, even in the event that the mediation process is not successful and the case goes to court.

Is mediation required?

As with many things in the legal world, the short answer to this question is that it depends. There are three broad areas when mediation may be required: contractual provision, statutory requirement and court order. However, even if mediation is required the parties should remain aware of the fact that the process is voluntary. If it fails, litigation is always an option.

When it comes to contractual provisions, it is not uncommon for construction contracts to include a provision that requires mediation to resolve conflicts. In these cases, the parties generally must attempt to mediate the issue. If the mediation fails, the case may still move forward to a traditional court setting.

There are also instances when mediation is required by law, meeting the statutory requirement example. This is true particularly for public works projects. In other cases, a court may review the dispute and determine that the parties should attempt mediation before moving forward with litigation.

What are the benefits and risks of mediation?

When successful, mediation can lead to a resolution that takes less time and costs less money than traditional litigation. Unfortunately, when it fails the opposite can be true. Since time was taken to gather information and conduct negotiations, none of which can be used towards a case if the process fails due to the confidentiality agreement tied to the mediation process, a failed mediation attempt can result in increased time and cost to resolve an issue.