For over a century, the standard construction industry contract forms, beginning with those of the American Institute of Architects, have contained binding arbitration clauses. Many courts regularly refer construction litigants to special masters, referees, and private arbitration. A growing number of courts require litigants to attend mediated settlement conferences prior to trial, and many contracts now require mediation as a condition of filing a civil action. The industry has also embraced partnering, dispute review boards, project counsel arrangements, neutral fact finding, and other private, consensual methods of resolving disputes.
As does the industry we serve, our firm and its members have experimented with and embraced alternative dispute resolution (ADR). In the construction industry, few clients are truly better off after protracted litigation, even if they “win.” In many cases, a more cost-effective strategy includes negotiation coupled with some form of ADR. Recognizing the limitations of full-blown, in-court litigation, and the actual harm litigation can do to industry relationships, reputations and bank accounts, our firm has mastered alternatives to litigation. Our lawyers have tried hundreds of cases, large and small, to juries, judges and arbitration panels, but we have negotiated many more change orders and represented clients in hundreds of mediated settlement conferences. We do not stop with advocacy. Several of our attorneys are trained and experienced in service as project neutrals. The following is a description of some of the services we provide as neutrals in the ADR setting. More details can be found under individual attorney profiles.
Three of our attorneys, Richard Conner, Holt Gwyn and Jim Schenck, are members of the American Arbitration Association Panel of Construction Arbitrators, and the Association’s Large, Complex Case Panel (LCCP). They have also served as arbitrators by special appointment of the state and federal courts in North Carolina. Holt Gwyn is a Fellow in the College of Commercial Arbitrators. From the inception of Conner Gwyn Schenck PLLC, we have been appointed to serve as arbitrators in approximately 300 cases, over half of which have gone to hearing. Evidentiary hearings in these cases have ranged from one day to several months, and have involved relatively small amounts in controversy to multi-million dollar disputes.
Four of our attorneys, Richard Conner, Holt Gwyn, Jim Schenck and Jay Wilkerson, are certified by the North Carolina Dispute Resolution Commission to serve as mediators in North Carolina Superior Court cases. Messers. Conner, Gwyn and Schenck are also members of the North Carolina Academy of Superior Court Mediators and the American Arbitration Association’s Panel of Construction Mediators. We have mediated several hundred construction industry cases, large and small (as well as hundreds of other cases not specifically related to the construction industry). More information about our mediation experience can be found on the website of the North Carolina Academy of Superior Court Mediators, accessible from our individual attorney profiles.
Court Appointments as Neutrals:
From time to time, our members have been appointed by the courts to serve as a special master (in Federal Court) or referee (in State Court) to hear cases and give advisory opinions to the Court. Normally the parties and the Courts accept the opinions rendered by our members, resolving the dispute.
Neutral Fact Finding:
We are occasionally asked to look at claims for one or both parties (often public owners), and give a neutral opinion on the merits of a claim or related group of claims, both as to entitlement and recoverable damages. In our opinion, this process is not used enough in the industry, even though some state rules, including the court rules in North Carolina, recognize and sanction the process, and even though many lawyers and ADR experts have touted the procedure for years. The cost of a neutral fact finder usually is greater than the cost of a mediator, but it can be money well spent in a complex case, and especially when coupled with mediation.
Dispute Review Boards:
Although not commonly used in North Carolina, our firm members have experience serving on dispute review boards in other states. Richard Conner served on three Dispute Resolution Boards for the $1 Billion+ toll roads constructed in the San Joaquin Hills Transportation Corridor, Orange County, California for several years. Holt Gwyn served on a Dispute Resolution Board for a Northern Virginia project and a multi-year mixed-use project in North Carolina.
Development of ADR Programs:
We have drafted and negotiated ADR rules and procedures for numerous projects over the years, including a high-rise resort on the South Carolina coast, a corporate headquarters in North Carolina, a Superfund site in Michigan, and several public buildings in our home state. Although it is usually best to decide on ADR procedures at the beginning of a project, we are often called on to fashion a dispute resolution procedure mid-project, as disputes arise. Negotiating an ADR process to resolve a pending dispute can be a challenge, but it is a challenge we embrace, because it is often best for the parties and the project. We have negotiated such arrangements in dozens of cases. In one case, we were able to negotiate an agreement to retain a neutral fact finder to resolve dozens of disputed change orders and backcharges on a prominent public arena project, with the result that litigation was avoided altogether.
Sometimes our role extends beyond the creation of a project ADR process. We are prepared to step in as counsel to or “friend of the project.” In that role, we review contracts for clarity, balance and fairness, review insurance and risk management programs, review the project information program, administer the ADR program and even serve as (or find) the neutral fact finder. We expect the need for these services to grow as the industry embraces enterprise and consensus contract documents and delivery systems.
Representative Matters for Alternative Dispute Resolution