Dispute resolution and early neutral evaluation in construction

“Mediation Week” has drawn to a close, so before you forget about mediation for another year, here’s my contribution about ADR (alternative dispute resolution) in construction!

So you’ve got a “run of the mill” maybe £50k to £150k construction dispute. If you start adjudication everyone will get upset. But you want to know where you stand and get things resolved quickly. You’d rather be building something than spending time arguing and you’d rather not get into an expensive fight. But negotiation just isn’t going to work. What are your options?

Well, have you thought about mediation? And if you can’t settle at mediation, what about mediation together with early neutral evaluation (“ENE”) – at least with ENE you’d have a better idea of how your position might be viewed by a neutral, but (depending what you agree) you wouldn’t be bound by the evaluator’s decision.

Roughly what will it cost?

That’s difficult to say. It depends. Disputes are usually all a bit different, but maybe relative indicative costs could look something like this… but please don’t quote me or rely on these:

• Mediation – say £500 to £1,500 per party plus Vat, you don’t need a lawyer at mediation, but you’ll need to add whatever your legal representatives cost;
• Early Neutral Evaluation  – say £1,000 to £4,000 per party plus Vat for the neutral evaluator, plus lawyers’ costs, if any;
• Adjudication – the adjudicator’s decision matters, it’s almost always enforceable. So you will probably want to employ a lawyer. Costs on both sides could easily add up to say £20,000 to £80,000 plus Vat;
• Court or Arbitration – all the way to trial, well maybe £80,000 to £250,000 on each side, (maybe much more) with the loser probably paying some of the winner’s costs.

You do the maths!

By the way, did I mention that I’m a mediator and happy to do ENE? If you want to know about mediation and Early Neutral Evaluation do get in touch.