A. Resolving Conflicts

Knowledge of methods for resolving conflicts that occur during construction (e.g., mediation, arbitration, litigation).

Audio time: 10 Minutes

Stream the Audio below for KS #44 – Part A

In this Knowledge Statement, we are going to review the concepts associated with conflict resolution strategies including mediation, arbitration and litigation. Let’s take a look;

We already discussed the Architects Practice Act and Initial Decision Maker in Knowledge Statement 10, but it is worth repeating here before we discuss mediation, arbitration, and litigation.

Heads Up!

Don’t confuse the role of the Initial Decision Maker (You) with the formal process of Mediation and the role of the Mediator. We, as Architects, DO NOT MEDIATE.

Architects Practice Act

According to the Architects Practice Act, Article 9, Section 160, Paragraph C, Subpg. 5

“When acting as the interpreter of construction contract documents and the judge of construction contract performance, an architect shall endeavor to secure faithful performance of all parties to the construction contract and shall not show partiality to any party”

This could be interpreted to mean that if a conflict arises between the Owner and General Contractor, the Architect shall try to resolve the issue without favor to any party (even though the Architect’s contract is with the Owner)

AIA Document A201 – General Conditions

Article 4.2.12 of A201 is a very similar statement to the one above in the Architects Practice Act. Also according to Section 15.2.1, the Architect assumes the role of “Initial Decision Maker” and an initial decision shall be rendered by the Architect prior to engaging in Mediation.

NOTE: The Architects Practice Act and AIA Document A201 General Conditions both indicate the role of the Architect to fairly and impartially try to resolve a dispute. If a dispute cannot be resolved, the next step would be a formal process of Mediation administered by the American Arbitration Association. Visit their website for more information.

Please review AIA B102 Standard Form of Agreement Between Owner and Architect for a further description of mediation and arbitration if necessary. The basics are covered below.

Mediation
- First line of conflict resolution (assuming parties are unable to resolve themselves)
- Form of alternative dispute resolution
- Non-binding dispute resolution
- According to B201, Mediation must take place prior to Arbitration
- Neutral third party aims to assist two (or more) parties in reaching an agreement
- Usually least expensive of the 3 methods
- Both parties share expenses of the Mediation

Arbitration
- When mediation is unable to resolve dispute
- Neutral third party aims to assist two (or more) parties in reaching an agreement
- Binding dispute resolution
- Decision of the arbitrator is final
- Less expensive alternative to litigation
- Quicker process than litigation

Litigation
- Dispute resolved in the court system
- Expensive and long process , involving attorneys

I was involved in arbitration with a client who refused to pay final bill. It was an emotional rollercoaster but I prevailed and not only received my outstanding fees, but also the costs I incurred to open arbitration and the arbitrator ’s fees. You can listen to Podcast Episode 7 for all the details!