THE INTEGRATION OF MEDIATION
Where does mediation sit in today’s contentious construction industry?
Mediation has steadily moved from being an alternative form of dispute resolution to a central tool in managing construction conflict across the UK. As projects become more complex and contractual relationships more fragmented, the industry is recognising the value of structured negotiation long before adjudication or litigation becomes inevitable.
The industry is more aware that mediation can resolve disputes that would otherwise consume months and substantial budgets.
Although construction disputes have traditionally gravitated toward adjudication, often at speed and under pressure, mediation provides a far more controlled, cost-effective and relationship-focused environment for resolving issues.
But it is not a magic bullet; to be effective, parties must understand what mediation can achieve, how to prepare for it and how to use it strategically. Below, we explore where mediation is today, how it is evolving and why it should be a core part of every business’s dispute-avoidance strategy.
Recent years have seen a marked increase in the use of mediation within construction. Several factors are driving this shift:
- Escalating adjudication costs, particularly in complex disputes.
- Court encouragement, including judges’ criticism of parties who refuse reasonable offers to mediate.
- Desire to protect commercial relationships in long-term frameworks and repeat business models.
- The need for flexibility, especially on disputes that cut across technical, commercial, operational and personal issues.
The industry has become more aware that mediation can resolve disputes that would otherwise consume months and substantial budgets through litigation or multiple rounds of adjudication.
One of mediation’s greatest strengths is its practicality. It allows parties to:
- Focus on outcomes rather than strict legal positions.
- Explore commercial. compromises adjudicators or judges simply cannot order.
- Address misunderstandings and miscommunications that often fuel disputes.
- Maintain confidentiality, protecting reputations and future working relationships.
Unlike adjudication, which is decision-driven, mediation is solution-driven. This makes it particularly valuable for disputes involving ongoing projects, framework partners or long-term client-contractor relationships.
While mediation is more flexible than other processes, it is not informal. Poor preparation almost always results in poor outcomes.
Historically, mediation was used as a last resort, typically after a failed adjudication or during litigation. Today, the trend is shifting:
- Early mediation is becoming more common, often triggered by early warning signs or commercial deadlock.
- Mid-project mediations are being used to break cycles of delay, misalignment or escalating tension.
- Post-adjudication mediations are frequently held to negotiate payment plans or global settlements after a binding decision.
The earlier mediation is used, the greater the opportunity to prevent significant cost escalation.
The rise of remote communication has fundamentally changed the landscape.
While mediation is more flexible than other processes, it is not informal. Poor preparation almost always results in poor outcomes. Effective preparation includes:
- Understanding the legal and contractual position but being willing to move beyond it.
- Preparing a factual summary that is clear, concise and non-inflammatory.
- Identifying the true drivers behind the dispute ( often different from the stated positions).
- Assessing commercial priorities, including cashflow, future work, programme obligations and risk exposure.
- Ensuring decision-makers attend, not simply representatives with limited authority.
Businesses that approach mediation strategically consistently achieve better outcomes.
The rise of remote communication has fundamentally changed the landscape. Online or hybrid mediation sessions offer:
- Reduced cost.
- Faster scheduling.
- Ability for wider stakeholder attendance.
- Increased flexibility for multiparty disputes.
Digital bundles, breakout rooms and structured online negotiation techniques have made mediation more accessible, particularly helpful where parties are geographically dispersed or where disputes involve numerous specialists.
While mediation can be used in almost any dispute, it is particularly effective for:
Mediation is now a mainstream tool and those who integrate it into their commercial strategy are seeing significant benefits.
- Valuation and payment disagreements.
- Delay, disruption and prolongation claims.
- Design coordination issues.
- Final account disputes.
- Allegations of defective work.
- Relationship breakdowns. between project teams.
- Disputes involving complex technical expert evidence.
If the dispute contains commercial, relational or multi-issue complexity, mediation often produces better long-term outcomes than a purely legalistic process.
Mediation is now a mainstream tool and those who integrate it into their commercial strategy are seeing significant benefits. The industry should focus on:
Clear communication and early identification of issues
Recognising disputes early and engaging in structured dialogue reduces the need for formal proceedings.
Contractual awareness
Most standard forms include dispute resolution ladders. Parties should use these mechanisms proactively rather than mechanically.
Project records and evidence
While mediation is flexible, strong evidence still informs better negotiation positions. Accurate records, programmes and cost data remain essential.
Openness to commercial solutions
Being willing to consider nonlegal outcomes programme adjustments, revised scopes and payment plans is a hallmark of successful mediation.
Use of external advisors
Specialist mediators, claims consultants and legal advisors can guide strategy, prepare robust submissions and support effective negotiation.
Mediation has become an essential component of modern construction dispute resolution. It offers speed, confidentiality, flexibility and critically the chance to preserve relationships and unlock practical solutions. In an industry where time, cost and collaboration are everything, mediation is no longer a peripheral option; it is a strategic asset. Businesses that integrate mediation into their commercial and contractual approach will be better positioned to manage risk, contain costs and maintain strong working partnerships in an increasingly challenging construction environment.