In-Life Mediation: A new model for managing disputes in Project Agreements

In today's fast-paced business world, disputes are inevitable. In large procurements where the deployment, utilisation and upkeep of the asset will last for years maintaining effective supplier/customer relations is essential. Unfortunately, during the lifetime of these projects relations often become strained as internal factors (e.g.staff turnover, budgets, needs, business direction) and external factors (e.g. market place, advancements in technology, political environment) change over time.

Most Project Agreements will have elborate provisions dealing with governance perhaps establishing project boards and change management processes. They will also have provisions dealing with dispute resolution with timings and escalation steps and often proposing a form of alternative dispute resolution to attempt to settle the matter before going to court. Eyes though are increasingly turning to ensuring that dispute resolution processes are efficient and use "a 'preventative maintenance' programme well as ensuring 'early repairs' when inevitable problems arise" (ABA article Keeping on "Track" with Early dispute resolution for Mega Projects 04.02.2022). In-life mediation offers an excellent opportunity for a low cost, efficient solution to project disputes. It's focus on party-led solution and confidential and without prejudice structure gives the parties the freedom to explore compromises or solutions without having to harden their positions.

By appointing a named neutral Mediator at the start of the project, trust is built by all parties and the Mediator becomes familiar with, and can record in simple language, the intentions of the parties at the outset of the project. This can often serve as a touchstone as the costs and risks associated with inevitable change need to be allocated. On a retained basis, the Mediator can be available to attend project managment sessions and track the evolution of the relationship. Having managed supplier and customer relationships, sometimes over decades, having a consistent presence of a neutral party, trusted by both sides can be invaluable in driving the parties towards effective communication and collaborative solution building for their disputes.