Mediation - the pragmatic route to low cost dispute resolution?

A recent mock mediation event by Griffiths & Armour and Hill Dickinson demonstrated that good sense can prevail even in the toughest disputes. Antony Oliver reports.

Mock mediation

The standard advice from anyonethat has been involved in a construction industry contract dispute is straightforward – if at all possible stay out of court.

Regardless of who is or is not to blame, the simple truth is that the time, cost and sheer impact on your on-going business rarely outweighs any judgement handed down in your favour.

"Clearly the owner was due some damages but how much is fair?"

And if the ruling goes against you it could be hugely expensive – business threatening or at best have a substantial impact on your future professional indemnity insurance premium or ability to even obtain cover.

One way to stay out of court is by using mediation. It is a process which will generally be encouraged by the courts, and especially the Technology and Construction Court.   Whilst it is entirely voluntary the courts can take a negative view of parties who bypass the possibility of mediation.

And yet, for all its benefits, mediation is still viewed with suspicion in some circles, possibly due to a perception that a "successful" mediation in fact leaves all parties feeling slightly disappointed.  It is still not as widely used as it could be, especially in jurisdictions where it is not actively promoted by the courts as a cost effective alternative to trial.

To try to overcome this reluctance and to demonstrate that, even when parties appear to be impossibly far apart it can be possible to mediate a solution, insurance brokers Griffiths & Armour joined with lawyers Hill Dickinson to stage a mock mediation event.

The scenario – played out with amateur dramatic gusto by members of the two firms’ expert teams – would have been alarmingly familiar to many.

  • A two storey basement development in the £10M Kensington home of a private owner goes wrong leaving her with a damp and unusable space.
  • She is claiming £1.6M for structural repairs, cost of making good and other losses including distress, anxiety and disruption to her holiday.   She is looking
  • to the architect, structural engineer and contractor to foot the bill plus costs.
  • The builder was clearly out of his depth, but maintains he simply did what the engineer told him.
  • The structural engineer was guiltyof not specifying or supervising critical work. However, his contract included a £100,000 cap on liability.
  • Meanwhile the architect was guilty of permitting the substandard work to progress but he failed to notify his insurer of a possible claim and thus had no professional indemnity insurance to support him and was poorly advised by his lawyer as a result.

So on the face of it, this would seem an unlikely candidate for being concluded at mediation.  Clearly the owner was due some damages but how much is fair? And with the parties all so far apart in terms of blame and with no obvious financially liquid target ready or even able to pay, how could it ever settle?

Despite these hurdles the parties reached a deal. As the case played out it transpired that the architect, while perhaps not the most guilty party, did have both cash to pay and a client relationship to maintain.

Similarly, the builder was also happier to settle rather than risk furtherrevelations of his cost cutting being flushed out in court.

And the structural engineer, while sitting on an enforceable liability cap of £100,000, was prepared, on advice from his insurance broker, to settle a a higher sum given the risks of seeing the dispute continue to trial.

The client, keen to avoid a public airing of dirty linen in court, agreed to settle for £950,000 plus costs.

So while fictitious, the mock process demonstrated that, provided all parties work towards a pragmatic solution, good sense can prevail.

It also highlighted that while it is often thought that being insured attracts liability, if you are uninsured but have assets you can come off worse.

Five points for successful mediation:

  1. The process is consensual – it requiresparties to cooperate towards a common goal of resolving the dispute.
  2. The mediator’s role is pivotal – they have to strike a balance between driving a deal and allowing the parties to take the initiative.
  3. Individual personalities can help or hinder – professional legalrepresentation can provide a buffer or it can replace one problem with another.
  4. Preparation is vitally important – disclosing key new information on the day is not helpful and unlikely to promote a deal. Lawyers need to have been fully briefed by their client in advance.
  5. Written terms of engagement can be enormously valuable in negotiations – such as liability caps,net contribution provisions and scope of services.


Infrastructure Intelligence will be working with Griffiths & Armour over the coming months to help explain some of the key insurance issues facing construction professionals. For further information visit 

If you would like to contact Antony Oliver about this, or any other story, please email