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Construction Law
settlement value of the claim, but the defendants could not agree on an allocation of settlement contributions among themselves. The excellent mediator involved in the case proposed a creative solution, where all defendants agree on the amount of aggregate damages, thereby capping the damages, and then arbitrating liability allocations amongst the three defendants with a panel of three arbitrators.
Advantages of ADR
Mediation and other forms of alternative dispute resolution have become increasingly important as way to deal with construction cases. These cases present complicated factual scenarios and technical information often better suited to be mediated or decided by an educated trier of fact (i.e., an arbitration panel) familiar with industry practices and scenarios than a busy trial judge and lay jurors.
Recent Appellate Level Case Law Arguably Shows Mediation is Favored
In a recent New York case, New York’s Appellate Division, First Department, enforced a pre-suit mediation clause. On January 12, 2023, in Centennial Elevator Industries, Inc., v. JRM Construction Management, LLC, Case No.: 2022-01092, ___ A.D.3d ___, the Court affirmed the Motion Court’s decision dismissing Plaintiff’s complaint. In the Motion Court’s decision, it was noted that Defendant hired Plaintiff to perform elevator modernization work. In this case, however, the decision indicates that the agreement was contained in a Purchase Order. The Purchase Order provided as follows:
The parties agree that they will negotiate in good faith JRM’s Master Subcontractor Agreement (MSA) and anticipate to enter the MSA within a reasonable time. The Parties further agree that until such time . . . the terms of this Purchase Order and the MSA shall govern this Work.
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FDCC ANNUAL INSIGHTS 2023