Can’t we all just get along? Mediation and settlement of the construction lawsuit (Law & Order: Hard Hat files Part 7)
Today, part 7 of our series on the Construction Lawsuit, Law & Order: Hard Hat files.
At some point during the lawsuit (usually, but not always, after expert reports are produced), your lawyer may tell you the case is going to mediation. In fact, in North Carolina, all Superior Court cases are ordered into mediation, though the timing is usually left to the lawyers.
What is mediation?
Quite simply, mediation is a process in which the parties, their insurance representatives, and their lawyers get together to discuss trying to settle the case. The process is usually fairly informal, fast, and, often effective.
How is mediation different from arbitration?
In arbitration, you present your case to a one or three person “panel” of arbitrators. Witnesses are sworn in, evidence is presented, and, ultimately, the arbitrator(s) decide who wins, who loses, and what amount of damages should be paid.
In mediation, however, there is no “decision maker,” and the only way your case will be resolved is if you agree to having it resolved. In other words, you have much more control over the outcome.
Technically, how does a mediation work?
Mediations are all unique, but in general, most start out with a “general session” in a large conference room in which all parties (lawyer, parties to the lawsuit, and insurance reps) are present. The mediator, usually another lawyer who is not involved in the case, will present opening remarks, explaining that he/she is not there to decide anything, the ground rules for the day, and how he handles confidential information.
Then, the mediator asks each lawyer to state his case. The party who brought the lawsuit always goes first, and they state how the project started, why they sued, and why they believe they are entitled to damages. This can range from a 5 minute speech from their lawyer to a full-blown 2 hour multi-media (read: powerpoint) presentation, including remarks from retained experts. I’ve seen both, and everything in between.
Following the plaintiff’s presentation, the other parties will be asked to state their case (i.e., their defense, and any counterclaims), and why they believe they will prevail at trial.
After all of the lawyers have had their say, the mediator will generally allow any parties to speak if they wish to. Discuss this with your lawyer ahead of time, but the default is to simply bite your tongue, keep your mouth shut, and wait until “private session” to have your say. No architect or engineer ever made things better by arguing during the opening general session.
What are these “private sessions” of mediation all about?
After the opening session, the mediator will divide the parties into different conference rooms. Sometimes, parties whose interests are closely aligned may be in the same room, at least for part of the day. For example, if an architect and his engineer are united in their defense, they may want to spend part of the private sessions together.
The mediator will then practice “shuttle diplomacy”. That is, the mediator will talk with each party privately, playing devil’s advocate, discussing case outcomes, and, ultimately, passing offers to settle back and forth among the parties.
How do the offers of settlement work?
The settlement offers are highly case-dependent, and can vary throughout the day depending on how the mediator likes to work and how much leeway the attorneys give him. Usually, he starts with the plaintiffs to find out what amount of money, short of the full amount claimed, they would accept to walk away from the lawsuit.
Then, the mediator talks with the defendants (and third party defendants) about how much money they would be willing to pay to be done with the risks and unknowns of a jury trial. Conditional, confidential, and other offers are sometimes employed. If they are, the mediator will discuss the process with you at that time.
Why should I pay money? My design was good and I haven’t done anything wrong!
At some point during the day, you will end up saying this. It will seem extremely unfair that you are being asked to pay (or have your insurer pay on your behalf) for someone else’s problem or mix-up. However, ultimately you will have to make a business decision about how much time and effort your Firm wants to spend on taking the case to a jury. If the case settles, you free up the time you would otherwise spend in depositions, meeting with your lawyer, talking to experts, and reviewing documents. Depending on the scope of the project and the lawsuit, this could be hundreds of man-hours. Further, at the end of the day, you end up risking bad publicity and an adverse judgment that will affect either your bottom line or your insurance premium.
Are you saying I have to settle?
No, absolutely not. Sometimes, the plaintiff has such a crazy demand, that you are better off taking the case to a jury. Other times, the evidence is so much in your favor that it doesn’t make sense to settle. Usually, however, the case is more nuanced, and so you need to discuss the evidence, and your chance of a successful verdict, with your lawyer on a case by case basis.
My case was “impassed” at mediation. What does this mean?
If the mediator concludes that the parties are too far apart to settle, at some point he will declare an impasse. If this happens, everyone shakes hands and goes home.
What happens next is that the lawyers may continue to talk over the next month or so to see if there is any chance at all for settlement, and at the same time begin or continue their preparations for a trial. Just because a case impasses at mediation, doesn’t mean it can’t or won’t settle.
Cases can settle right up and through trial, until the jury comes back with a verdict. Obviously, the sooner a case settles the better, as you will have spent less time and money on trial preparation. However, do not give up all hope of settlement simply because of a mediation impasse. (After all, Lennie Briscoe never gave up, did he?!).
Your turn. Have you been part of a mediation? Tell me about your experiences, good and bad. And, if you haven’t already, be sure to sign up for email updates of blog posts directly to your inbox. The sign-up box is on the top right hand side of the homepage.
Photo (c) cobrasoft.
I’m writing this post in advance of its publication, as I plan to be out of town when this post goes live. So today’s Tip will be short and sweet– but nevertheless extremely important. It comes to us from Audrey Thomas of LeanOffices.
Here’s Audrey’s “Etiquette Nugget: Listen to Your Gut”:
If you’ve ever found yourself about to press send, but you get a feeling in your gut that is telling you not to, listen to your gut. There’s a reason why it’s speaking to you.
Perhaps you find yourself thinking these thoughts:
“This is probably going to tick him off.”
“This will put her over the edge.”
“I hope my client doesn’t misinterpret the pricing I’ve laid out for them.”
“I hope they read through this twice before responding back to me.”
If you’ve ever had these or similar thoughts, don’t press send. Instead, have a voice-to-voice conversation regarding the matter by picking up the phone or visiting the person face-to-face.
Another option for those emails that might be a bit “edgy,” is to put them in your drafts folder overnight. It’s amazing what rest can do for your mind and your gut.
I whole-heartedly agree. I will add: never put anything in writing (including email) that you wouldn’t want your Grannie to read. Stay safe out there!
Photo (c) Greenbay.
Mine is better than yours! Battle of the experts in the construction lawsuit (Law & Order: Hard Hat files Part 6)
Eventually, most construction lawsuits of any size involve hiring experts to review the project. These experts then usually issue an opinion as to whether or not you, as the design professional, violated the professional standard of care for architects or engineers working on a similar project in a similar community.
If the case proceeds to trial, all sides will have their own expert(s), with rare exceptions. Thus, the “battle of the experts” begins. That is, a jury will have to listen to your expert, their expert, and the juror’s own common sense, and try to make out who is correct. As with most things, there are probably valid points made by all of the hired experts (that is, of all the reputable ones, at any rate). If a case gets to trial, you can be sure of it.
Hiring an expert to support your position can be a scary prospect. You will essentially be paying (or having your insurance carrier pay) to have a competitor look over all of your work with a fine-tooth comb and 20/20 hindsight, to see if he can concur that your design met the standard of care. Your attorney should work with you to get a good, solid professional peer retained as your expert; however, if you have any suggestions of who to use (or, who you do *not* wish to use), make those opinions known. It is important to hire someone who is impartial about the outcome of the case, but you will not be required to hire your worst enemy/competitor.
Another protection that is built into litigation, is whether or not the expert’s opinion will ever see the light of day. If the expert cannot support your position, he will be designated a “consulting expert” and his opinions will remain only between you, your lawyer, and the expert. Assuming the expert does support your position, he will be designated as a “testifying expert,” at which point the other side can look at his records and notes, read any written reports he generates, and take his deposition.
Hiring an expert doesn’t have to be an arduous process, but work with your lawyer to get someone you respect on your side of courtroom.
Questions? Comments? Share your experience with experts, or being an expert, in the comments section below. And don’t forget to sign up for the Construction Professional newsletter and my free white paper on 7 Critical Mistakes, on the right hand side of the homepage.
Photo (c) Sias van Schalkwyk
Last week, I mentioned the renewal of the tax credits for wind energy. Another report which came across my desk recently is one from SustainableBusiness.com, in which it is reported that some (although certainly not all) of New York City’s oldest buildings are out-performing LEED-certified buildings.
The magazine compares the new 7 World Trade Center, a LEED-Gold certified project, to the 1930s-era Chrysler Building, which is more energy efficient. The 7 World Trade Center building has an Energy Star score of 74, while the Chrysler building scores 84 (in part due to extensive efficiency upgrades).
The cited reasons include thicker walls, fewer windows and less ventilation in the older buildings, as well as the fact that LEED-certified buildings look at other environmental features, such as the kinds of materials used and recycled, water systems, and proximity to public transportation.
Does this surprise you? Are you a critic of the LEED process or an advocate? Share your thoughts below.
Photo (c) davidlat.
Have you been following the “fiscal cliff” debacle? Unless you spent the holiday season in a cave, the answer is probably YES. One interesting detail tucked away in the recently passed compromise legislation is the renewal of the Renewable Energy Production Tax Credit (PTC) for wind power, now extended through 2013.
The PTC awards a 2.2 cents per kilowatt hour tax credit for wind, geothermal and closed-loop biomass and 1.1 cents per kilowatt hour for other renewable energy technologies. This lasts for 10 years for most technologies, including wind. Alternatively, companies can request a lump-sum payment of 30% of the wind construction cost as a tax credit once the wind turbine starts producing power.
Also new for 2013, companies are allowed to claim the credit if construction begins before the end of this year. Previously, the facility had to be placed in service (i.e., operating) before the end of the year.
According to the folks at Green-Buildings.com, the extension of the renewable energy credit should boost wind energy construction, at least for the first half of 2013.
What is your opinion of the tax incentives for wind energy? Yeah or Nay? Share in the comment section, below.
Photo (c) berent.