ConsensusDocs and JAMS share common dispute mitigation and resolution goals and bring together a talented group of neutrals to contribute to better and more efficient construction contracting. ConsensusDocs (a family of standard form construction contracts promulgated by 40+ participating construction industry associations) provides form contracts that foster open communication pathways among the parties, a balanced allocation of risks, and avoidance or early mitigation of disputes. JAMS (a leading provider of arbitration, mediation, and related dispute resolution services through a select panel of distinguished neutrals) shares common goals with ConsensusDocs in promoting efficient and cost-effective resolution of the disputes that arise on construction projects – when they are unable to be avoided. Recognizing these shared interests, ConsensusDocs forms specifically identify JAMS mediation and arbitration among the types of alternative dispute mitigation and resolution offered.
Ways to Settle Construction Disputes
ConsensusDocs contract documents use a flexible, multi-step dispute avoidance/mitigation/resolution structure that starts with direct discussions between the parties. Direct communications to mitigate disputes begins at the project level and then advance to the senior executive level. If these discussions do not avoid the dispute, the next step of non-binding mitigation involves either mediation or the use of a Dispute Review Board (DRB) or Project Neutral. ConsensusDocs produces a standard agreement DRB specification (ConsensusDocs 200.4) and DRB agreement (ConsensusDocs 200.5). Numerous members of the 35-person JAMS Global Engineering & Construction (GEC) group serve frequently on DRBs and accept Project Neutral appointments, where they can bring to bear decades of hands-on experience with complex construction contract issues and provide practical, down-to-earth advice to aid resolution.
If the mitigation alternative of a DRB or Project Neutral is not selected, the multi-step ConsensusDocs process instead mandates mediation in advance of binding dispute resolution. The parties select either JAMS or AAA mediation rules for this by checking a box in the ConsensusDocs standard agreements. The selection of the applicable mediation rules itself is only rarely significant to the mediation process. What is far more important is the qualifications and experience of the selected mediator and their familiarity with emerging alternative mediation formats that have proven effective for particular types of construction disputes. For example, should the parties utilize some of the mediation time in making presentations regarding the key fact and legal issues involved? In concept, this is an opportunity for the parties to bring home the strength of their arguments to the other side’s decision-makers. In practice, however, it can be an ineffective waste of time or worse, generate emotional responses by one or both parties that make settlement more difficult. In situations where the level of pre-mediation information exchange and knowledge of the other party’s positions is low, such presentations can be highly effective. But in other cases, that valuable mediation time is better spent in private caucuses with the mediator exploring resolution alternatives.
Variations of Mediation
Similarly, there are emerging mediation variants with particular applicability to certain construction disputes, such as “Guided Choice” mediation, where the mediator’s role is more extensive. Using the Guided Choice process, the mediator guides the parties through efficient, limited information exchanges designed to provide both parties with the specific information they need to evaluate the strengths and weaknesses of their arguments, assess their respective risks, and formulate constructive settlement proposals before settlement offers get exchanged. ConsensusDocs publishes a ConsensusDocs Guidebook for users that embraced Guided Choice. A variant of Guided Choice, sometimes referred to as mediated case management is designed for disputes already in litigation, where the mediator is again used to avoid broad and expensive pre-trial discovery in favor of focused information exchanges that get to the heart of what the parties need to be able to resolve the dispute on a rational and reasonable basis. Yet another alternative is mediation followed (when needed) by a neutral evaluation, where the parties can best benefit by getting independent input from a neutral on the likely dispute outcome if it is taken to a hearing or trial before resuming mediation.
JAMS GEC group members devote their professional efforts solely to neutral assignments (whether as mediator, arbitrator, neutral evaluator, DRB member, or Project Neutral). They stay current on the latest ideas in construction dispute resolution with the help of JAMS’ training programs and library of available resources. Indeed, JAMS GEC members have pioneered the use of several of these emerging mediation variations.
Binding Dispute Resolution
For the final binding resolution step, the ConsensusDocs form contracts offer the alternatives of arbitration (under arbitration rules created by JAMS, AAA, or other rules identified by users) or litigation in court. In arbitration, the selection of the applicable rules is more important than in mediation, and the JAMS Construction Arbitration Rules offer several advantages over the alternatives. For example, the JAMS rules specify that initial disclosures of key information documents should begin as soon as the arbitration is filed and not await an initial scheduling conference after the arbitration panel is constituted. Under other arbitration rules, nothing much happens after filing the request for arbitration, until the initial scheduling conference is held. This often takes place three months or more later – time that is effectively “dead time” in terms of moving the dispute to resolution. The JAMS approach requires the parties to get started with initial information disclosures immediately after filing the request, potentially shaving months off the total time to resolution.
The JAMS rules also take a more pragmatic approach to depositions. Alternative arbitration rules try to disfavor depositions except in unusual cases – although this is routinely ignored in complex construction disputes. The JAMS rules instead establish a presumption that each party can take two depositions of fact witnesses employed by the other party, but require a showing of need if any more are desired. This avoids most time-wasting disputes over the need for depositions and puts a stake in the ground as to what is reasonably allowed. This allows both parties to plan for this from the outset, set an early hearing date, and, again, shorten the time to resolution. If they are not needed, they can readily be eliminated.
The JAMS rules were most recently amended in 2021 to clarify the procedures for conducting arbitration hearings remotely (such as via platforms like Zoom or Teams), given the sharp (and continuing) increase in such proceedings driven by the COVID pandemic. Making the arbitration process as focused and efficient as practicable is the goal of the JAMS rules and supports ConsensusDocs objectives by both reducing the cost of arbitration and the time needed to obtain an arbitration award and get on with the current project or the next one.
The ConsensusDocs initiative, now 15 years old, includes over 40 construction industry associations as supporting members, has brought a perspective centered on the best interests of the project to the drafting of form contracts, and has been responsible for initiating a number of innovative provisions that have advanced the state of the art in construction contracting.