FORUM
Art of Mediation in the Engineering and
Construction Industry
J. K. Yates, M.ASCE
Dept. Head, Joe W. Kimmel Distinguished Professor of Construction
Management, Dept. of Construction Management, Western Carolina
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Univ., Cullowhee, NC. E-mail: jkyates@wcu.edu
Introduction
This essay includes a presentation on the art of mediation in the
engineering and construction industry. It explains mediation as it
applies to the engineering and construction industry in the United
States and other common law legal systems and describes how
mediation is viewed in Asian and Shari’a legal systems. In addi-
tion, this essay includes a review of the effectiveness of different
types of mediation proceedings.
The first section provides a discussion on what mediation is,
how it is used, why it is used, and what mediators attempt to
accomplish when they are dealing with disputing parties that are
not able to reach an agreement. The second section provides a
definition for Mediation/Arbitration, which is an alternative dis-
pute resolution 共ADR兲 technique. The third section describes how
mediation is viewed in other cultures, as contrasted with the in-
formation provided in the first two sections, which are related to
mediation in the U.S. and other common law legal systems. The
last section discusses the effectiveness of different types of me-
diation proceedings.
Mediation
Mediation is a variation on negotiation that inserts a neutral third
party into the negotiation process, and the mediator helps the
opposing parties to reach a settlement. Mediation sessions might
take the form of conferences, or they could be held in private
sessions. Sometimes, if the negotiations have deteriorated into an
explosive situation, a mediator will separate the opposing parties
and take settlement proposals from one party to the other. Media-
tion sessions could be conducted over several days and nights
without adjourning until a settlement is reached; this method is
used during union contract mediation sessions. Mediation ses-
sions for construction contract disputes are not usually as intense
as union sessions; therefore, they may be conducted only during
regular business hours 共Yates 2010兲. Mediation is used for several
reasons, including to:
• control losses;
• contain damages;
• preserve relationships;
• clarify issues; and
• secure agreements.
For mediation proceedings to be successful, both of the dis-
puting parties have to be committed to reaching a settlement and
agree not to use other dispute resolution methods. Mediation does
not replace negotiation; rather it is used to augment negotiation. It
136 / JOURNAL OF LEGAL AFFAIRS AND DISPUTE RESOLUTION IN ENGINEERING AND CONSTRUCTION © ASCE / AUGUST 2010
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is attempted only if both parties agree to use it. Arbitration
clauses in construction contracts may also include stipulations
that require mediation in contract disputes as a way of ensuring
that mediation will be explored before using arbitration 共Yates
2010兲.
Definition of Mediation/Arbitration
Mediation/Arbitration 共Med/Arb兲 is a composite of both standard
mediation techniques and arbitration. Med/Arb agreements stipu-
late that a mediator will be appointed prior to the disputes and
that the mediator will become the arbitrator if the disputing par-
ties are not able to reach an agreement through mediation 共Yates
2010兲.
The advantage of using this process is the mediator will al-
ready be familiar with the issues surrounding the disputes by the
time he or she takes on the arbitrator role. If someone other than
the mediator were brought in to arbitrate the disputes, then all of
the evidence presented during the mediation process would have
to be provided again for the new arbitrator.
The disadvantage of Med/Arb is having someone who has the
authority to make binding decisions involved in the mediation
process. This might cause the disputants to withhold information
that could help achieve a settlement during mediation until arbi-
tration.
Mediation in Different Cultures
Knowing the origins of legal systems when trying to settle dis-
putes with members of firms from foreign countries provides an
advantage for engineering and construction personnel involved in
legal disputes, but within a nation there may be a high degree of
variability in the outcomes of legal cases 共Stokes 1978; Knutson
2005兲.
The most frequently used legal systems in the world are civil
law and common law. Civil law is derived from the ancient
Roman legal system 共Romano-Germanic兲, and common law legal
systems evolved during the Norman Conquest to unify England
共Katz 1986兲. The Germanic Code, which is based on Romano-
Germanic law, was adopted in 1896 and relies on some of the
procedures of the civil law legal system. Governments in some
Asian countries do not follow either common law or civil law
legal systems. In some Islamic countries, the governments en-
force Shari’a law, which is based on the holy book of the Islamic
faith, the Koran 共Quran兲.
Civil law legal systems are the most prevalent in the world.
Civil law jurisdictions include Europe, South America, Scotland,
Quebec, Louisiana, and the former French colonies, including
South Korea 共Calvi and Coleman 1997兲. Elements of civil law
legal systems are also present in some of the former Eastern bloc
countries and other Communist countries. Many of the aspects of
 civil law are still based on the original Roman precepts of legis-
lation, administrative edicts, and judicial reasoning. In AD 528,
the emperor of Constantinople, Justinian, published all of the laws
of the empire as the Code of Justinian, or Corpus Juris Civilis.
Many civil law legal systems are still based on this code, and its
precepts are also used in some common law legal systems. When
the code was revived in the Middle Ages, it became known as
Romano-Germanic law and as “a rule of conduct intimately
linked to ideas of justice and morality” 共Calvi and Coleman 1997,
p. 23兲.
Examples of common law jurisdictions include Great Britain
and the former colonies of Great Britain such as the United
States, India, and Malaysia 共Knutson 2005兲. The United States is
predominately a common law country, but the state of Louisiana
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utilizes elements of civil law because it was originally settled as a
colony of France 共Katz 1986兲. Common law is based on the legal
system that developed in the United Kingdom when the kings
consolidated their judicial power, formed uniform tribunals, and
no longer allowed local courts. Common law was also referred to
as judge-made law because the judges formalized court rules and
applied them throughout the kingdom. Judicial decisions were
recorded by the court system and used as precedents for future
legal cases. These changes to the legal system made the law com-
mon to the entire nation 共Calvi and Coleman 1997兲.
Mediation in Asian Legal Systems
Jurisdictions in many Asian countries have neither common law
nor civil law legal systems, and as a result, they have adapted
their legal systems to address mediation in a manner that is dif-
ferent from how it is used in the United States.
The legal system in Japan is derived from ancient Japanese
law, but it was influenced by French civil law. Japanese citizens
are extremely averse to litigation, as is demonstrated by the per
capita litigation rate in Japan, which is one-twentieth the per
capita litigation rate of the United States 共Katz 1986兲. In Japan,
there are eight engineers for every lawyer, and in the United
States there are eight lawyers for every engineer.
The process of making decisions by consensus that is used in
Japanese firms is called nemawashi 共root-binding兲. Everyone is
consulted during the decision-making process and must accept the
decision before it is implemented. This process may delay deci-
sions for years but leads to the rapid implementation of decisions
once they are made because everyone involved has had their con-
cerns addressed during the decision-making process.
Lawsuits are not common in Japan because the legal system
takes two to twenty years to settle cases. The main purpose of
lawsuits is to force the opposing party to take moral responsibility
for their actions. Japanese citizens regard contracts with suspi-
cion, as they feel that relationships should be allowed to change
with the circumstances. Even though they do not use elaborate
contracts, the Japanese people are honorable in their business
dealings and they use the term seig, which means right principles,
in reference to legal matters. Because of their legal system, many
Japanese people prefer to settle engineering and construction
legal disputes through mediation or conciliation, as it is called in
many Asian countries.
In the People’s Republic of China, conciliation is used more
frequently than litigation because “the basic goal of Chinese so-
cial philosophy is to attain harmony and mediation 关conciliation兴
is compatible with this Confucian ideal” 共Redfern and Hunter
1986; Katz 1986, p. 246兲. In China, the law codes of the Ch’in
have been in use since 220 BC, and they were not modified until
the twentieth century. The current legal system in the People’s
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Republic of China resembles the socialist system described in the
constitution: China is a “socialist country under the people’s
democratic dictatorship and led by the proletariat on the basis of
a worker-peasant alliance. Socialism is the political system of the
country where all power belongs to the people” 共Xichuan and
Lingyuan 1990 p. 214兲.
The Republic of Korea 共South Korea was closed to foreign
business until 1994, when the November Declaration of the
Fourth World Trade Organization Ministerial Conference opened
the country to more foreign investment. Foreign firms that ob-
tained construction licenses in the late 1990s have since returned
their licenses and started focusing exclusively on construction
management because they could not secure enough work; there-
fore, construction contract disputes between U.S. and Korean en-
gineering and construction firms only rarely occur.
The other Asian countries have legal systems that are similar
to the legal systems of their historical colonizers, including Great
Britain, France, and Spain.
Mediation in Shari’a Law Countries
Some Islamic countries are governed by Shari’a law. In Shari’a
law jurists deduce rulings from the word of God. “A Shari’a rul-
ing is an instance of legislation issuing from God, the Exalted,
with the purpose of organizing the life of human beings. The
revealed addressed 共al-khitabat兲 in the Koran 共Quran兲 and the
Sunnah are not considered to be religious rulings in themselves,
although they disclose and shed light on religious rulings” 共Al-
Sadr 2003, p. 54兲. Religious rulings in the Shari’a are divided into
two types 共Al-Sadr 2003. p. 55兲:
1. First, rulings which are related to the actions of human be-
ings and directly address their conduct in different aspects of
personal, devotional, family and social life, all of which are
dealt with and organized by the Shari’a. These include such
rulings as the unlawfulness of consuming alcoholic bever-
ages, the obligatoriness of prayer, the obligation to give fi-
nancial support to certain close relatives, the permissibility of
reviving neglected land and the obligation of rulers to act
with justice.
2. Second, rulings that do not address human actions and con-
duct directly, but legislate for certain situations that have an
indirect effect on human conduct, such as the rulings that
regulate matrimonial relations…Rulings of this type are
called situational rulings 共al-ahkam al-wad’iyyah兲. There is a
strong connection between situational rulings and rulings of
general obligation 共al-ahkam al-taklifiyyah兲, since no situ-
ational ruling exists without one of general obligation exist-
ing alongside it.
There are five types of rulings of general obligations 共Al-Sadr
2003, p. 55兲:
1. Obligations 共al-wujub兲: a ruling that impels a person toward
the matter in question at the level of absolute requirement.
2. Recommendations 共al-istihbab兲: A ruling that impels a per-
son toward the matter in question at a level lower than obli-
gations.
3. Prohibition 共al-burmah兲: A ruling that restrains a person from
the matter in question at the level of absolute obligation.
4. Reprehensibility 共al-kirahah兲: A ruling that restrains a person
from the matter in question at a level not reaching that of
absolute obligation.
5. Permissibility 共al-ibuhah兲: A ruling that arises whenever the
Legislator grants those held accountable by law the opportu-
nity to choose the stand he wished to adopt with respect to a
 particular matter. The result is freedom to perform or omit a
particular act.
The success or failure of mediation proceedings in a Shari’a
law country is influenced by which type of rulings of general
obligations are discussed during the proceedings.
“Modern Nations in the Middle East often seek to synthesize
Islamic laws and western legal systems. The religious law pre-
vails in regard to family, inheritance, and criminal matters, while
the western influence is frequently stronger in the area of com-
mercial matters” 共Calvi and Coleman 1997, p. 26兲. Islamic law
has adopted portions of the Napoleonic Code. Some of the North
African nations use elements of the Napoleonic Code at the na-
tional level, while tribal and local laws are followed at the local
level.
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Effectiveness of Mediation
Mediation proceedings achieve various levels of success depend-
ing on the type of individuals or organizations participating in
them and on the level of commitment of the participants. In the
construction industry, mediation is traditionally used to settle con-
tract disputes or labor agreements. Mediation proceedings are also
used in a variety of other industries to alleviate the requirement
and expense of using legal proceedings to settle disputes.
Construction contract disputes are settled using negotiation,
arbitration, litigation, and other ADR methods, such as Early
Neutral Evaluation, Rent-a-Judge, Court Annexed Arbitration,
Summary Jury Trials, and Dispute Review Boards, in addition to
mediation, but members of owner organizations and construction
firms prefer to settle disputes using either negotiation or media-
tion because less expense and time are required to reach satisfac-
tory settlements.
If negotiations fail while unions are forming new construction
labor agreements or during construction contract disputes, then a
mediator is hired by the disputing parties to help them reach an
equitable agreement. The most successful professional mediators
possess skills that allow them to assist disputing parties in reach-
ing a settlement, such as the following 共American Council of
Engineers and Contractors Guidelines to Practice 1988, p. 34兲:
• preparation and planning skill;
• knowledge of subject matter;
• the ability to understand the true interests of the firms;
• the ability to think clearly and rapidly under pressure;
• the ability to express thoughts verbally;
• excellent listening skills;
• patience;
• the ability to persuade others;
• the ability to clearly understand others;
• the ability to control their emotions; and
• the ability to maintain flexibility.
Mediators do not force either party to agree on a settlement;
they provide only a neutral observation of the situation. Mediators
help translate information to ensure that both parties understand
it, they may provide advice concerning the other party and their
objectives, they help direct the negotiations, and they offer sug-
gestions. For mediation to be successful, the parties involved in it
need to genuinely want a resolution of their differences and to be
committed to not having the discussions end in failure.
It may take years to reach a settlement using the legal system.
Arbitration requires the collection and presentation of pertinent
documentation; formal presentations of the facts surrounding the
disputes; the involvement of the members of the organizations
138 / JOURNAL OF LEGAL AFFAIRS AND DISPUTE RESOLUTION IN ENGINEERING AND CONSTRUCTION © ASCE / AUGUST 2010
J. Leg. Aff. Dispute Resolut. Eng. Constr. 2010.2:136-138.
that are trying to reach a settlement for a period of a few months;
the hiring of one to three arbitrators; and a period of time for the
arbitrators to review the case and associated documentation, to
listen to the oral arguments of each side, and to render either a
binding or nonbinding settlement decision. Mediation proceed-
ings, in contrast, require only that a mediator be hired and that the
mediator listen to whoever is involved in negotiating a settlement
for each side as they describe the disputes. Mediation proceedings
normally require less than a week, unless there are mitigating
circumstances that extend the mediation period into subsequent
weeks. Since neither legal counsel nor arbitrators are required,
and there are no associated court costs, mediation is a less expen-
sive and less time-consuming alternative to litigation or arbitra-
tion.
Some managers at engineering and construction firms are
adopting mediation as a method for settling personnel issues that
occur in the workplace or at job sites. This form of mediation is
different from the mediation that is used to settle construction
contract or labor agreement disputes in that it does not involve
monetary amounts that are being disputed, but rather it is used as
a method for trying to resolve personal conflicts. This type of
mediation is more successful when the parties are peers rather
than subordinates and their supervisors because the discussions
that occur may not reach definitive conclusions; they are mainly
used to clarify issues. In subordinate and supervisor mediation the
power rests with the supervisor, and there is an element of poten-
tial negative future treatment that clouds the issues being dis-
cussed during mediation proceedings.
In business transactions, mediation is used to settle product
and liability disputes to reduce the cost associated with using
legal proceedings to settle these types of disputes. In many in-
stances, consumers receive written notices that indicate that dis-
putes associated with product liability will be settled through
mediation or arbitration and that the settlements reached through
these dispute resolution methods are binding, which means that
neither of the disputing parties is able to appeal the settlement
using the court system. The settlements reached during mediation
or arbitration proceedings in product liability cases do not have to
include legal fees and court costs, and this reduces the monetary
obligations of the firms that produce the products and hopefully
allows the firms to reduce the cost of their products in order to
pass along the savings to consumers.
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