Arbitration|Conflict Resolution|Mediation

Stipanowich on ADR in Construction

Tom Stipanowich has posted a new article, “Managing Construction Conflict: Unfinished Revolution, Continuing Evolution,” at the Pepperdine Law Library’s Legal Studies Research Paper Series.  Stipanowich is a trained architect, an experienced construction lawyer,  and a very experienced construction arbitrator, and his article speaks authoritatively on the past 20 years of change in construction dispute practices.

He concludes that the promise of innovation that so dominated the field 20 years ago — DRBs, statutory “adjudication” in the UK, collaborative contractual platforms, real-time on-site conflict resolution — has failed to take hold in a way that has fundamentally altered the way disputes are handled.  In the past five-year period, mediation is down and arbitration is way down.  And the cause?  The industry has “lawyered-up,” concludes Stipanowich, and it’s the dispute professionals, not the parties themselves, that drive the dispute resolution processes and derive the main benefit from them.

Twenty years ago, says Stipanowich, construction professionals were partnering, collaborating, DRB-ing and creating “integrated project delivery systems.”  Mediation was fast becoming an inescapable feature of construction disputes, and construction arbitration processes were being revised with an eye to cost and efficiency.  But, he notes,

…we underestimated the grip and staying power of the litigation-oriented legal culture, and the “gravitational pull” it exerts on everything it touches, especially mediation and arbitration.  The legal profession inhabits and dominates these vast swathes of the commercial conflict management landscape and is the primary determinant of its contours.  Within these realms lawyers largely control the shape and timing of dispute resolution processes, who gets in, and who runs or facilitates the process (usually lawyers); the shadow of litigation and the litigation model hangs heavy over the scene.

He acknowledges that programs anchored on the jobsite and conducted in “real time” persist.  Collaborative platforms can be found.  “In the “layered” domains of mediation and arbitration, however, the irresistible force of the revolution in conflict resolution collided with the immovable object of the legal culture and its litigation orientation.”

Many construction practitioners regard mediation as unavoidable, but merely as a “whistle-stop on the litigation line.”  Construction mediation has become dominated by construction lawyers, both as advocates and as neutrals, resulting in “hegemony, a takeover of the mediation work and a slow but steady disenfranchisement of non-lawyers.”  Similarly, in construction arbitration, there is a “drift” toward a litigation model and what Stipanowich calls the “demise” of the multi-disciplinary tribunal.

Some may regard this as a step towards — or perhaps a reflection of — the professionalization of the dispute resolution field.  But the consequence is a diminution of party control, a lack of professional diversity, and arbitrations involving parties who are construction professionals, appearing before a tribunal with no construction professional on board — only lawyers.  Says Stipanowich, “As an arbitrator alongside two other lawyers, I occasionally feel like I am in a boat with all the oars on a single side: in some respects our collective expertise is redundant, and in other respects insufficient.”

Stipanowich identifies five “transformative trends” that may disrupt this landscape: technology (including its promise of efficiency in communication during dispute resolution processes), globalization (and its call for cross-cultural ADR processes); insights through behavioral science (such as the developing field of heuristics and cognitive barriers); longer productive lives and the anticipated entry of older lawyers into the dispute resolution arena; and professional credentialing.

Just how these “disruptions” might answer the challenge of the development of ADR processes that are not client-driven, and whose benefits are not client-directed, Stipanowich does not reveal.

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