Virginia Real Estate, Land Use & Construction Law : Virginia Construction Lawyers & Attorneys : Bean Kinney & Korman Law Firm : VA Real Estate, Land Use & Zoning

My friend Vickie Pynchon recently posted at Chris Hill's blog, Construction Law Musings, on "How to Get Sued".  On the flip side, there are some simple pointers that all individuals and entities can follow that will dramatically reduce the chances of being sued.  These tips apply across a spectrum of businesses and are certainly not limited to just construction, real estate and land use.

1.  Be likable.  It is a lot harder to sue a friend.  If you maintain a friendly, warm relationship and the other side genuinely likes you, it is very difficult to cross the threshold of considering suit, let along filing one.

2.  Failing that, at least be palatable and not obnoxious.  On some level, likability and personality are somewhat pre-wired and we may not all be blessed with the so-called "winning personality".  It is clearly within most of our ability to avoid being confrontational, impolite or nasty.  Those traits make it real easy to turn a dispute personal and into trench litigation warfare.

3.  Be honest and maintain credibility.  Understand that if you get caught even in somewhat meaningless falsehoods, they come at the price of your credibility throughout the deal.  Many lawsuits flow from the plaintiff losing trust in the honesty of their opponent.

4.  Play nice.  Taking extreme advantage during a deal may feel like a good move at the time, but it can create an atmosphere that calls for payback.  Building a relationship of shared mutual success and teamwork can help smooth over differences of viewpoint during performance of contracts.

5.  Be organized.  Expensive, protracted and risky litigation looks a lot less attractive if your opponent looks like they have their act together and can or may win.  Sending the message that you are well organized throughout a contract can help create that impression.

6.  Document, document, document.  This may be the most important substantive point, as opposed to personality driven point, of all.  My career is littered with cases fraught with peril due to the failure of clients or opponents to document decisions, conversations, agreements, or notices.  In the era of instantaneous e-mail transmission, there is no excuse for why you failed to drop a quick line confirming what turns out to be the pivotal facts once you get into litigation.  Sending that timely confirmation is a great investment in avoiding litigation.

Image:  Yale University Art Gallery

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Mediation is often touted as a time and cost-saving method of dispute resolution in construction matters.  It is not without its critics.  Don Short recently posted a discussion,  "Why Bother with Mediation?".  Mr. Short's basic postion: "... mediation of a construction dispute is just an impediment to getting the matter resolved in a timely and cost efficient manner."  Mr. Short followed up in his piece "When Not to Use Mediation?" amplifying on the theme that time was money and that mediation clauses permitted a recalcitrant party to string the process out.

I have inserted pre-litigation and/or pre-arbitration mediation clauses into literally every single construction contract I draft.  The result has been overwhelmingly positive.  In my practice, I have seen very significant cases on very significant projects get resolved regularly at mediation with no lawsuit or arbitration demand filed.  The number of cases resolved compared to the number of useless exercise mediations like those described by Mr. Short is likely on a ratio of 20:1 or greater.  Even cases that do not settle initially often resolve soon thereafter based on the foundation established during mediation.  The cases that were going to be a waste of time to mediate had warning signs all over them and we gauged our approach and investment accordingly. 

Our good friend Victoria Pynchon had a slightly different view that being contractually required to mediate before the parties were ready would probably be another roadblock to eventual resolution. I agree that mediating before the parties are ready is a waste of time, money and resources and can be counter-productive.  I generally have been able to negotiate exchange of appropriate information prior to mediation to facilitate meaningful conversations.

I am mindful that it is somewhat counterintuitive to make a party mediate.  Utimately, mediation needs two parties that are open to discussion, risk evaluation and potential settlement talks.  Sometimes that cake needs to bake in the oven far longer before the parties are ready.  Generally, however, the mediation clause represents the parties agreeing that sitting down and talking to resolve issues is better than fighting in court or arbitration.  More often than not, it works.  Call me a cynic, but at times it feels like many lawyers only want to get to mediation when "their fee has fully matured".  By that time, much of the potential benefit of mediation has evaporated and the positions of the parties may have been hardened by the emotional and financial investment of litigation.  Getting lawyers and parties to mediation without such a clause often ends up taking far too long and involve ultimately wasted significant litigation expense. 

This viewpoint is admittedly anecdotal and developed over my years of practice and experience.  Do you see these clauses working to resolve cases efficiently or simply delaying the inevitable and costing time and money like Mr. Short?  Do you believe that placing the obligation rather than allowing the parties to mutually decide to mediate facilitates resolution or acts as an impediment?  Or do you think the quicker to the mediation table the better?

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