Content uploaded by Mohammad Hasan Senan
Author content
All content in this area was uploaded by Mohammad Hasan Senan on Aug 03, 2018
Content may be subject to copyright.
Responsible Design and Delivery of the Constructed Project
Edited by Abdul-Malak, M., Khoury, H., Singh, A., and Yazdani, S.
Copyright © 2018 ISEC Press
ISBN: 978-0-9960437-5-5
LDR-03-1
MEDIATION TACTICS AND EFFECTIVENESS IN
DISPUTE RESOLUTION
MOHAMMAD HASAN SENAN, NADINE ALZAGHRINI, and ISSAM SROUR
Dept of Civil and Environmental Engineering, American University of Beirut, Beirut,
Lebanon
Dispute occurrence on construction projects is almost inevitable. If not addressed
adequately, disputes can cause contract termination and loss of benefits for all parties
involved. Among various dispute resolution methods, mediation is gaining popularity
in the construction industry as it satisfies the desired degree of control of both parties
among other factors (e.g., time, cost). Mediation is a cooperative problem-solving
method that benefits from the expertise of a neutral third party known as the mediator.
Well-defined tactics such as creating trust atmosphere, tackling the core of dispute, and
using advanced integrative approach for solution determination are essential to reduce
the gap between disputants and ensure effective discussions. The aim of this paper is
two-fold. First, it investigates common mediator tactics and relates them to the
likelihood of having a successful mediation. The San-Ramos Channel case study is
used to illustrate the efficiency of mediator tactics. Second, this paper takes a closer
look into the use of mediation in Lebanon as an example of a country with minimal
regulations on mediation. Barriers for an effective implementation of mediation such
as the role and the influence of the engineer on the construction process and the
mediator’s lack of technical expertise are discussed and recommendations are derived.
Keywords: ADR, Construction, Disputants, Informal settlement, Lebanon, Mediator.
1 INTRODUCTION
Construction projects are recognized for their considerable costs and long duration spans. Even
the most elaborate planning often fails to capture all eventualities in a project, thus leading to
disputes among various project stakeholders. Contract incompleteness along with technical and
human related factors are at the root of these construction disputes. These factor groups
encompass uncertainty and risk, collaborative conflict, deficiency, ambiguity and inconsistency
of contracts along with affective conflicts and opportunistic behavior (Cheung and Pang 2013).
When a similar incident triggers a claim, the concerned party submits a written notice in
accordance with relevant contractual clauses and within stated time frames. If all contractual and
administrative processes for filing a notice are met, the engineer (i.e., the contract administrator)
turns to set a determination on the issue. The disagreement escalates to a dispute when any party
is dissatisfied with the engineer’s judgment and the parties fail to solve the issue in a practical,
well-timed, and mutually acceptable manner (Love et al. 2010).
Taking the case to court is the norm for conflict resolution and is known as litigation.
Increased costs and the required time periods added to the reckoning of relationships encouraged
parties to seek amicable settlements (Haugen and Singh 2015). These approaches provide an
alternative to the adversarial pattern sensed in court and are referred to as Alternative Dispute
Abdul-Malak, M., Khoury, H., Singh, A., and Yazdani, S. (eds.)
LDR-03-2
Resolution (ADR) techniques. Mediation stands out as a quick technique that aims to solve the
dispute amicably through fruitful discussions managed by a neutral third party known as the
mediator. Reducing the gap between the parties and ensuring effective communication are
dependent on the strategies and tactics used by the mediator, which vary according to the
complexities of the cases faced. This paper identifies the common tactics used by mediators to
help disputants reach a sustainable agreement. It also discusses the current status-quo of
mediation in solving disputes in the Lebanese construction sector.
2 METHODOLOGY
Mediation is distinguished by the presence of a neutral third party whose tactics are essential for
the settlement’s success. The first goal of this paper is to identify the common strategies used to
ensure a sustainable settlement. A literature review combined with an analysis of a case study
published by the U.S. Army Corps’ of Engineers are used to highlight the strategies used by
mediators.
The second objective of this paper is to evaluate the status-quo of dispute settlements in the
Lebanese construction sector. To serve this purpose, a senior mediation consultant at the
Lebanese Center for Mediation and Arbitration (LAMC) with four years of experience and a
contract administrator with 20 years of experience were interviewed. The former is an accredited
mediator and the latter is a chartered arbitrator. The interviews focused on the choice of ADR in
the Lebanese construction industry, along with the perceived barriers to the implementation of
mediation. The interview questions are attached in the Appendix.
3 MEDIATOR TACTICS
The ability to read and evaluate evidence and claim particulars is a key characteristic of the
engineer, expert, or judge who issues a fair and binding decision. Likewise, the skills and
attributes of the mediator are piers to a successful and efficient mediation.
Codes of conducts and scholars require mediators to be impartial and neutral. Although used
interchangeably, neutrality implies not taking sides whereas impartiality requires treating all sides
equally. Other norms include mainly competence, disclosure of any conflict of interests with the
parties, and ensuring party self-determination (Shapira 2016). Mediator competence implies a
thorough comprehension of conflicts, negotiation, and communications principles along with an
understanding of the mediation process and regulations. Disclosure of conflict of interests proves
the intentions of the mediator not to favor or diminish the interests of a party with whom they
might have a personal or past/existing/future business relationship. The intensity, duration, and
frequency of such relationships are critical factors to determining whether the neutral party must
withdraw or continue with the mediation (Kovach 2014). These attributes qualify the mediator to
commence with the mediation sessions to help the parties, using useful tactics, build their own
agreement and determine what is acceptable to them.
3.1 Key Mediator Tactics
The presence of a qualified mediator as neutral party is essential if the parties in dispute are not
able to reach an agreement themselves. The mediator, who’s responsible for controlling the
session, maintaining a friendly atmosphere, and reducing the gap between the two parties, uses
various tactics to reach an amicable settlement. The mediator aims in the session to create a trust
atmosphere between the parties and tackle the core of the dispute in order to solve the problem
using an advanced integrative approach.
Responsible Design and Delivery of the Constructed Project
LDR-03-3
3.1.1 Creating an atmosphere of trust
The mediator, from the beginning of the mediation, works on creating an atmosphere of trust with
both sides in order to help them reach an agreement. In his opening statement, the mediator
explains to the audience the importance of mediation as a technique where parties can collaborate
to find common grounds rather than have a solution imposed on them by an arbitrator or judge.
The mediator also uses his opening statement as a chance to gain the trust of the parties by
detailing her/his experience in mediation and the success rate reached in mediations.
Furthermore, the mediator is ethically required to disclose any past professional or personal
relationships with any of the parties, if they exist. In this case, continuing the mediation is
subject to obtaining the parties' consent. Disclosing relationships prior to mediation is important
to gain parties' trust and guarantee a stable progress and a permanent solution.
In addition, the parties and/or the mediator can ask for a caucus meeting. A caucus meeting
is a private meeting between the mediator (or assistant mediator) and a party. The goal of this
meeting is to learn privately the concerns, objectives, and other relevant information (e.g., hidden
interests, walk-away points), reduce the level of tension, and allow room for option generation
(Twomey 2006). The trust established between the mediator and the parties due to the level of
openness and transparency is fundamental to better guide the discussions and reduce the gap
between the parties in dispute.
3.1.2 Tackling the core of dispute
The mediator’s goal is to assist the parties in reaching a solution that will be abided by and
therefore is considered sustainable. Thus, the mediator should determine the hidden interests,
fears, and agendas of the parties in the opening statements, questions phase, and in caucus
meetings. This process begins immediately after the opening statements of the parties. The
mediator checks all the available and relevant contractual clauses and any other reachable data
about the parties’ firms. Based on a clear understanding of this data, the mediator prepares a list
of open-ended questions that urges the party to explain its position for both the mediator and the
other party. Any shown evidence or revealed information in the mediation sessions should
remain confidential and cannot be referred to in court (Twomey 2006). The core of the dispute is
then made clear paving the way for the mediator to start the problem resolving phase.
3.1.3 Using advanced integrative approach
Tension is often present in disputes. An experienced mediator transforms a tense debate into a
joint problem-solving discussion which pushes the parties towards proposing new thoughts rather
than splitting the pie. This technique allows for a quiet discussion to take place taking into
consideration the objectives, insecurities, and interests of each party. Hence, the process of
finding a solution is made easier since each party finds itself proposing what it finds acceptable
while observing the reaction and ideas of the other party. While being in control of the
discussion, the mediator examines the progress reached compared to the beginning of the
mediation session, as s/he allows the parties to propose options and ideas that will later be crafted
into an agreement.
This joint problem-resolving discussion is controlled by the mediator who pitches in every
now and then in order to ensure that a friendly atmosphere remains while the discussion continues
on the right track. The mediator may also intervene to show the progress reached by
recapitulating what has been agreed on. The main goal of the mediation session is to reach an
Abdul-Malak, M., Khoury, H., Singh, A., and Yazdani, S. (eds.)
LDR-03-4
acceptable agreement. However, the mediator may also look for improving the parties’ ability to
reach solutions together for future challenges through these joint problem-solving discussions.
3.2 The San Ramos Bypass Channel Case Study
The San Ramos Bypass Channel is a case study published by the U.S. Army Corps’ of Engineers.
It illustrates how the ADR techniques can be used to resolve disputes between a public entity and
private corporations.
The project dates back to 1986 when the Corps’ decided to build a 5-mile long channel that
runs through Walnut Creek city. The contractor, Brutoco, excavated a portion of the channel and
stockpiled the material above high-pressured petroleum pipelines which raised concerns that the
area may collapse, rupturing thus the pipeline. Additionally, the Corps’ believed that slopes were
cut steeper than what was designed and ordered Brutoco to build an earthen buttress.
The dispute was on assigning the responsibility for the added costs and delays of building the
buttress. The Corps’ put the full responsibility on Brutoco for choosing an inadequate area to
place extra material. Brutoco defended itself by claiming that the Corps’ authorized using that
area for backfilling.
Brutoco filed a $3.1million total cost claim when no agreement was reached in negotiations
on the modification order sum. The Corps’ resorted to mediation in order to solve the dispute
quickly and at a reduced cost. Brutoco accepted mediation with similar hopes for securing faster
payments.
The mediator used the opening statements of both parties as a chance to discover the major
issues in dispute according to each party since Brutoco did not submit a brief. The parties’ trust
in the mediator’s capabilities and possibility of reaching a settlement increased when he recapped
and tackled the core issue of the dispute and the points both parties agree to as well. However,
the mediator was aware of the high level of tension between the parties that resulted from
improper communication during project lifecycle. Hence, he had no option other than having
separate “caucus” meetings with the parties to investigate further about their own risk analysis,
interests, and possible settlement packages. The mediator was able, through the established trust,
to discuss the weaknesses and strengths of each party’s case and reduce the gap. He also
motivated both parties to reach a solution not only through explaining thoroughly the implications
of taking the case to litigation on cost and time, but also through proposing a deadline to reach an
agreement.
The mediator’s integrative approach, coupled with the intention of both Brutoco and the
Corps’ to reach an agreement, resulted in innovative solutions proposed by both parties. Those
solutions helped in settling the main dispute in addition to other minor disputes. The mediator led
the discussion through transferring those possible settlement packages while shuttling back and
forth between the parties. These indirect fruitful discussions between the parties resulted in an
agreement on a $1.15 million figure.
The agreement allowed the mediator to bring the parties together to draft and sign the
agreement. In their evaluation, the Corps’ and Brutoco praised the mediator’s skills and tactics
that made reaching the settlement and avoiding litigation possible (Susskind et al. 1992).
4 DISPUTE RESOLUTION IN LEBANON
To understand the applicability of mediation to countries with minimal regulations governing
ADR, the case of Lebanon was considered. The Lebanese Arbitration and Mediation Center
(LAMC), founded in 1995, is specialized in resolving disputes. Mediation has been integrated
within LAMC since 2012 through a cooperation agreement signed between the Chamber of
Responsible Design and Delivery of the Constructed Project
LDR-03-5
Commerce, Industry, and Agriculture of Beirut and Mount Lebanon and the International Finance
Corporation, a member of the World Bank Group.
As such, it can be inferred that mediation is a newly-introduced ADR to the Lebanese market
and is not widely used yet. According to the interviewed mediation consultant, only one case has
been directed to mediation and ended being resolved using arbitration. In 2014, the center passed
a law to the Lebanese Parliament to incorporate mediation into the local legal system and create a
statutory framework governing mediation procedures. To date, the law has not been adopted.
4.1 Barriers to Mediation Implementation in Lebanon
Recognizing common norms and practices in Lebanon is essential to understand the dispute
resolution landscape. According to the interviewed contract administrator, FIDIC 1989 and
1992-reprinted contracts are the most widely used standard forms of contracts in Lebanon.
Clause 67 of these contracts encourages the engineer to issue a decision should a dispute arise.
Amicable settlement and arbitration can then follow if the issue is not resolved. Unfortunately,
many project owners who use FIDIC contracts remove the clauses relating to new methods for
clash resolution such as the dispute adjudication board, and rely on the traditional method for
dispute resolution through engineer’s determination and arbitration.
This strong attachment to traditional clash settlement methods is attributed by the
interviewees to the grandiose role of the engineer, inherited before contracts were introduced to
the Lebanese construction sector. The engineer, who is often the designer and the client
representative, must authorize all changes even those coming from technical consultants. In the
early 1990s, a megaproject called “Solidere” aiming at reconstructing the capital city’s central
business district was the first project to introduce international contracts in Lebanon. Contractors,
who were used to a well-defined relationship with the designer, failed to detect initially the
importance of these contract documents. Soon after, competition increased with the appearance
of new contracting companies and profit margins began to drop. As a result, contractors were no
longer able to blindly commit to every decision requested by the engineer. At this stage,
contractors realized the value of the documents signed early on in the project and got a clearer
understanding of their rights and duties as displayed in the contract.
Despite this progress, innovative approaches such as mediation and other forms of ADR
techniques are still not implemented in Lebanon for several reasons, according to the mediation
consultant. First, engineers remain the “rulers” of the projects and the point of reference for
every major decision. As such, they prevent mediators from entering the construction industry by
enhancing informal settlements on and off the site, thereby refuting a need for another third
neutral party. Contractors, on the other hand, needed to conform to this decision as they wanted
to maintain positive relationships with the engineer to avoid designers lobbying. Black-listed
contractors endured great losses as they were no longer able to attain important projects.
Furthermore, mediators in Lebanon are typically lawyers who do not possess the technical
expertise needed and thus could not satisfy the needs of the parties. In contrast, designers such as
the firm for which the interviewed contract administrator works developed a new contract
administration department, composed of technical experts knowledgeable with dispute resolution
methods and tactics. As such, mediation did not seem to offer any added benefits.
5 CONCLUSIONS AND RECOMMENDATIONS
Mediation is gaining popularity as a non-binding process that allows the disputants to collaborate
and craft their own solutions. This amicable settlement is made possible thanks to the assistance
Abdul-Malak, M., Khoury, H., Singh, A., and Yazdani, S. (eds.)
LDR-03-6
of a mediator, a neutral third party who seeks to create an atmosphere of trust and to tackle the
core of disputes with an integrative approach for dispute resolution.
Settling disputes through mediation is uncommon in developing countries like Lebanon
despite the launch of a mediation center. Enhancing mediation in Lebanon requires several steps.
First, mediation must be better introduced and advertised to decision makers. The engineers
drafting contracts have to be convinced to add a clause on resolution through mediation as a final
resort before arbitration. Second, the panel of accredited mediators must be limited to reputable
persons in the construction industry, known for their technical expertise and impartiality
throughout the years. This is an essential step for earning the trust of the stakeholders in the
process. These mediators should be familiar with substantive laws, procedural requirements as
well as drafting a correct and a binding settlement agreement.
Appendix: Interview Questions
1. What methods of dispute resolution are common in the contracts adopted in Lebanon?
2. What is the process commonly used for informal settlements?
3. How familiar are you with the Lebanese mediation center?
4. What are the main barriers for choosing mediation in Lebanon?
5. What are the main causes for mediation failure in Lebanon?
6. How can mediation be enhanced in the local construction market?
7. What qualifications does a person need to be assigned as a mediator?
References
Cheung, S., and Pang, K., Anatomy of Construction Disputes, Journal of Construction Engineering and
Management, 139(1), 15-23, January, 2013.
Haugen, T., and Singh, A., Dispute Resolution Strategy Selection, Journal of Legal Affairs and Dispute
Resolution in Engineering and Construction, 7(3), 05014004, April, 2015.
Kovach, K., Mediation in a Nutshell, West Academic Publishing, New Mexico, 2014.
Love, P., Davis, P., Ellis, J., and On Cheung, S., Dispute Causation: Identification of Pathogenic Influences
in Construction, Engineering, Construction and Architectural Management, 17(4), 404-423, February,
2010.
Shapira, O., A Theory of Mediators' Ethics: Foundations, Rationale, and Application, Cambridge
University Press, Cambridge, 2016.
Susskind, L., Babbitt, E., and Hoffer, D., Alternative Dispute Resolution Series: Brutoco Engineering and
Construction Inc. Case Study #7, Institute for Water Resources, January, 1992. Retrieved from
www.iwr.usace.army.mil/Portals/70/docs/iwrreports/92-ADR-CS-7.pdf on November 15, 2017.
Twomey, R. F., Mediation and its Merits as an Alternative Method of Employer-Employee Dispute
Resolution, Competition Forum, 4(2), 414, July, 2006.
