Mediation v. Arbitration, Both Private Dispute Resolution but Very Different Sorts

A simple statistical mediation model.
A simple statistical mediation model. (Photo credit: Wikipedia)

I often get calls from clients, potential construction clients, and other construction and business professionals with questions about arbitration or mediation clauses in the contracts that they are reviewing or drafting.  When I get these calls, it often becomes clear that, understandably, there is some confusion as to what each of these alternate dispute resolution processes entails.  I thought I’d put together a quick primer on what each is and their differences.

Mediation

I have often discussed the benefits of mediation for construction professionals.  I also expanded my solo construction practice to provide mediation services due to my firm belief that the process of mediation is worthwhile in most construction matters.

Mediation is a private process where a mediator, in the construction context often a construction attorney or other construction professional, provides guidance in assisting the parties to a dispute in reaching an agreed settlement.  The process is totally confidential and the mediator is not making the decision. The process is totally voluntary and the only binding thing to come out of the process is any agreement that the parties make.

In short, the mediation process is totally in the parties’ control and the mediator is simply there to use his or her experience to assist in highlighting issues, providing suggestions (where the parties request) and to facilitate the process.  The parties can come up with whatever solution they want to make to their dispute without rules of evidence or the winner take all nature of court proceedings.

Arbitration

Arbitration on the other hand is essentially private court.  In arbitration, the arbitrator, in my construction world a construction lawyer or construction professional (possibly more than one), acts as the “judge” in the dispute.  The rules are provided either in the construction (or other) contract or, if designated by contract or agreement, by a third party (JAMS, American Arbitration Association or the like).  The parties present their evidence and the arbitrator makes a decision that is enforceable in court if necessary.

Depending on the rules provided for in the contract, the process can be faster and more streamlined.  Discovery can be shortened.  Depositions can be eliminated.  The rules of evidence can be loosened.  All of these things could make arbitration desirable in some situations.  However, arbitration places neither flexibility or control with the parties.  The arbitrator decides who wins and who loses.  I have shared my thoughts on this process on many occasions here at Musings and won’t go into them all here, but suffice it to say that I don’t believe in arbitration as universally as I do in mediation.

I hope that this helps in your understanding of two available yet very different non-judicial ways to resolve your construction dispute.  Please share your experiences and thoughts below.

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Mediation v. Arbitration, Both Private Dispute Resolution but Very Different Sorts

Happy Holidays from Construction Law Musings

Christmas Tree (1)
(Photo credit: Wikipedia)

Happily, the older two kids are home from college and Musings is enjoying some time off for Christmas.

I wish you all Happy Holidays and Merry Christmas from The Law Office of Christopher G. Hill, PC and Construction Law Musings To all of my friends, colleagues and most importantly, family, I hope you have a safe, warm and wonderful holiday.

Thank you for your continued support and I look forward to a great 2018 with you, my readers.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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Happy Holidays from Construction Law Musings

Construction Law Musings Turns 9!

Happy Birthday
Happy Birthday (Photo credit: Wikipedia)

It was 9 years ago today that I announced the creation of Construction Law Musings with two lines, no picture and some vague idea that I wanted to share my thoughts and insights into Virginia construction law.  Back in 2008, Musings was on the Blogger platform, my kids were much younger (they’re now a junior at WVU, a freshman at Appalachian State University, and a freshman in high school!), and I had yet to start my solo construction practice.  Needless to say a lot has changed since then.  Over that 9 years, I’ve tried to keep up with the changing landscape of construction law and, hopefully, shared a few things that you, the readers, find interesting.  Some interesting if possibly contradictory mechanic’s lien cases were decided, along with a case finding another potential exception to the economic loss rule.  These are just a couple of the construction law related developments over the past year.

This past year has been a busy, productive and fulfilling one.  On the professional side, I was named for the 11th straight year (and all 7 years as a solo) to the Virginia Business Legal Elite in Construction Law.  I joined the Virginia Bar Association Construction and Public Contracts Law Section Council.  I was once again a co-chair for the planning of the 38th Annual Construction and Public Contracts seminar (if you didn’t make it this year, be sure to make it next year), and continue to serve on the State Bar Construction Law and Public Contracts section committee.  I also kept up my mediation practice and my certification as a mediator here in Virginia.  As always, I’ve also gained some new friends and rekindled some old friendships both in the legal and construction communities.

On the personal side, my kids (mentioned above) are all doing a great job in school and enjoying the time either in college or high school.  These three are a great joy for me to watch grow up.  Our two dogs continue to make life more furry and loveable and, saving the very best for last, my wonderful, supportive and beautiful wife continue to make life at the Hill house a great place to live.  Without the support of the world’s best family, Musings and the practice of law wouldn’t be the fun that it is.

Thanks to all of you that comment and share your thoughts here at Construction Law Musings and those that have helped me keep Construction Law Musings interesting through your Guest Post Friday posts.  Your comments and thoughts have on more than one occasion gotten me past some writers block and gotten me back on my weekly posting track.  Without the great colleagues and friends I’ve met since starting this blog, I likely would have stopped posting years ago.

Thank you to all of you who read Construction Law Musings.  Thank you to all of my friends, clients and colleagues who support this construction law blog and my construction law practice (you know who you are and it would take weeks to list you all).  And, most importantly, thank you to my great family for all that you do to support me in my solo career and my life in general.  You all have made the last nine years of Construction Law Musings a fun and rewarding ride.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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Construction Law Musings Turns 9!

July 1, 2015 Statutory Changes Affecting Virginia Contractors and Subcontractors

Originally posted 2015-06-01 09:00:41. Republished by Blog Post Promoter

Virginia General Assembly
Virginia General Assembly (Photo credit: Wikipedia)

As always seems to be the case, this year, as in others, the Virginia General Assembly has seen fit to “tweak” a few construction related statutes.  All of these changes will go into effect on July 1, 2015.

The big one, and one that I posted about a while back is the change to the Virginia mechanic’s lien statute to prohibit contractual waiver of lien, payment bond or claims for additional costs prior to the furnishing of labor or materials.  This one is big because it relieves a bit of the angst in the pre-contract negotiations between subcontractors and general contractors.

Another significant change, this one to the wording of Virginia Code 2.2-4309, found in House Bill 1628, clarifies the fact that this Virginia statute does not limit the amount a government contractor may claim or recover against a public body under a contract dispute.  This is a big one considering the ruling in the Carnell Construction Corp. v. Danville Redevelopment Housing Authority LLC limiting such claims.

Two other procurement related bills passed.  The first, SB 1371, clarified the justification and small purchase procedures in public contracting, adds independent agencies of the Commonwealth as public bodies for purposes of the Virginia Public Procurement Act and also increases the contract amounts for job order contracting while limiting the use of that procurement method.

Finally, SB 885, changes the definition of small business to assure that those businesses meet the size standards established by the regulations of the U. S. SBA.  While this seems to be an easy call, the bill will not become effective unless reenacted by the 2016 General Assembly Session after a work group convened by the Virginia Secretary of Commerce and Trade reports back its findings.

These are very broad summaries of the legislation.  I recommend that you review the bills themselves and consult with a local experienced construction attorney to assist you in how these changes may affect your construction business.

UPDATE:  There has been a minor change in how the bond claim related changes have occurred, check out my post next Monday on 6/8/15 for details.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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July 1, 2015 Statutory Changes Affecting Virginia Contractors and Subcontractors

Humbled by Year 11 in the Virginia Business Legal Elite

Thank you, once again, to the Virginia legal community that continues to elect me to the Virginia Business Legal Elite.  The eleven years in a row of election to the Legal Elite in the Construction Category spans my time at my prior firm and my time as a solo construction attorney.  The fact that you all have continued to elect “100%” of the lawyers at The Law Office of Christopher G. Hill, PC for the last 7 years is most gratifying.  For the complete list of the great Virginia construction lawyers that were elected along with me, see the 2017 Virginia Business Legal Elite in Construction Law.

So without further ado, thank you to all of you who voted for me.  I truly appreciate your continued confidence and support of my construction law practice.  Your yearly votes always prod me to learn and continually improve to meet your expectations and keep my practice at this high level.  I also couldn’t do this without the great support from friends and family (not to mention clients), so thanks as always to these great folks.

Thanks again,

Chris

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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Humbled by Year 11 in the Virginia Business Legal Elite

When is a Residential Subcontractor not Subject to the VCPA? Read to Find Out

English: Contractor-led design-build, architec...
English: Contractor-led design-build, architect as subcontractor (Photo credit: Wikipedia)

The Virginia Consumer Protection Act (VCPA) can and often does apply to residential construction.  The transaction between a residential contractor and an homeowner has been held to fall under the consumer transaction language of the VCPA and on occasion been used to avoid the issues with the economic loss doctrine in Virginia.  However, there are limits to how far down the contractual chain the VCPA applies, particularly in the case where a supplier or subcontractor does not provide the services or materials for a personal, consumer purpose.

An example of this fact is found in the case of Johnston v. Stephan.  In that case, a couple hired a general contractor to build a home and the general contractor hired Cole Roofing System, Inc. to provide the roof of the home.  The first couple subsequently sold the home and the second homeowners sought further work on the roof from Cole Roofing.  After Cole Roofing refused further work, the homeowners brought an action seeking to enforce a warranty and for a violation of the VCPA.  For the warranty claim, the homeowners relied on the contract between them and the prior homeowners that referenced a 10 year warranty on the roof and the subcontract between the homebuilder and Cole Roofing.  Cole Roofing sought dismissal of the VCPA and warranty claims by demurrer and further sought by demurrer to have the matter dismissed as being filed after the running of the statute of limitations.

The Fairfax, Virginia Circuit Court granted the demurrer to the warranty and VCPA claims and denied the demurrer relating to the statute of limitations.  As to the last of these, the Court simply stated that a demurrer is the wrong way to bring a statute of limitations defense.  As to the warranty claims, the Court held that because there was no privity between the new homeowners and Cole Roofing that the warranty could not be enforced by the plaintiffs.

In denying the VCPA claim, the Court held that the transaction between the original homebuilder and Cole Roofing was not a consumer transaction because a contractor purchasing materials for a home is a transaction between two commercial entities for a commercial purpose (i. e. to build and sell a home as opposed to build and live in a home).  Furthermore, the Court reasoned, there was no allegation of personal use by the homebuilder, as opposed to a purchase for the benefit of potential customers, the transaction at issue, between Cole Roofing and the homebuilder, was not a consumer transaction that fell under the VCPA.  The Court additionally stated that the plaintiffs failed to allege any misrepresentation of material fact or that any such misrepresentation was a knowing misrepresentation.

In short, the Court ruled that the VCPA does not apply to transactions like that in the Johnston case, that are solely between businesses and for a commercial purpose.

Of course, each and every case is different and each case will require the analysis of the particular facts and legal issues presented.  The help of an experienced Virginia construction attorney can help you as a supplier or subcontractor determine whether your transaction relating to a residential construction project could subject you to more than just contractual liability.  I also recommend that you take the time to read the full opinion and make your own analysis.

I welcome and encourage your comments below, please share your thoughts.  Also, please subscribe to keep up with the latest Construction Law Musings.

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When is a Residential Subcontractor not Subject to the VCPA? Read to Find Out

Happy Thanksgiving from Construction Law Musings

Thanksgiving Turkey
Thanksgiving Turkey (Photo credit: Wikipedia)

It is that time of year again when I find it appropriate to reflect on the great things in my life.  As I sit here with family on this Thanksgiving Day 2017,  I have much to be thankful for.  I have a thriving construction law practice, great clients, wonderful friends and of course the best, most supportive family a solo construction attorney like me could ask for.  I also have some great readers and guest post contributors that make this corner of the “blawgosphere” (if that’s even a word anymore) a more interesting place.

So without further ado, I wish you all a wonderful, happy and family filled Thanksgiving.  Have a wonderful holiday.

As always, I welcome your comments below.  Please subscribe to keep up with this and other Construction Law Musings.

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Happy Thanksgiving from Construction Law Musings