Part I – Background and Settings
Centurion Systems is a San Francisco- based IT Company that is involved in the development and installation of IT software and hardware solutions. The company has been in operation for 11 years now. In recent years, the company has expanded its market share outside the US, mainly in China and Singapore. To accommodate the ever increasing staff, the organization has decided to construct a new office block. Plans are also underway to renovate the existing office block to create room for additional staff. The company has contracted The Desire Group, a building contractor, to undertake the construction and renovation of the said group. The trade contractor, in this case The Desire Group, is seeking monetary claim for what it terms as lost labor productivity owing to stacking of trade, poor planning, excessive change orders, and defective drawings by the respondent’s construction manager. On the other hand, Centurion Systems in responding to the claim made by The Desire Group, states that the contract that the two parties entered into had a clause to the effect that no damage would be payable in case of any delays. The two parties are thus embroiled in a dispute in which The Desire Group is seeking payment for damages to the tune of $ 500, 000. On this dispute, I am in favor of The Desire Group’s position.
Part II – How was it Negotiated?
To help resolve the current dispute, a mediator was involved to help the narrative mediation approach to this conflict. Winslade and Monk (2000) note that the narrative mediation process enables the mediator to encourage parties embroiled in a conflict to tell their side of the story, with a view to reaching an agreeable resolution to the stalemate. An initial mediation meeting was organized by the mediator at a neutral venue that was convenient for both parties. Beers (1997) notes that this restores confidence in both parties during the first meeting. In this meeting, The Desire Group was represented by its CEO, project manager, a board member, and the company’s attorney. On the other hand, Centurion Systems was represented by its operations manager and an outside counsel. Even after making summary presentations, Centurion Systems, through their counsel were adamant on the contract clause about not paying for damages in delay, while the contractor wanted to be paid for lost productivity. Thus the mediator opted to have private meetings with both the claimant and the respondents at their respective places of work. During the meeting with Centurion Systems, the mediator underscored the validity of the lost productivity claims made by the contractor. He however reiterated that related cases had been successful challenged. Dana (2001) contends that the role of a mediator should be to enable the afflicted party explore all the angles of the conflicting issue so that an amicable solution can be arrived at. In his meeting with the contractor, the mediator asked the contractor to consider reviewing the damage payment downwards. In the follow-up meeting between the two parties, still no decision had been arrived at. During his second meeting with Centurion Systems, it emerged that the original contract drawings had been revised a few times and this could have resulted in the contractor’s inefficiency. An interview with the A/E revealed that there were defective drawings, excessive changes, and stops-and- go conditions created by the construction manager. This effectively saw the project delayed by about 6 months.
In a second meeting with the contractor, the mediator informed them that their claim contained a few errors and that Centurion Systems could not be held accountable for lost productivity linked to the repair of construction defects by the contractor. The mediator proposed a range of settlement fee that was agreeable to the contractor. He again met privately with Centurion Systems and their settlement offer was about 30% less than the settlement range to which the contractor had agreed. Moore (2014) argues that the mediator should aim at avoiding one of the parties having to resort to a litigation process as they would mean the end of the mediation process. In the final mediation meeting Centurion Systems agreed to double its initial offer but the contractor rejected it. After another two weeks of mediation, Centurion Systems made a final improved offer that the contractor accepted.
Part III – What Would You Have Done?
If I was the principal representative of The Desire Group, I would have rejected the final settlement made by the respondent as it was about half of what we were seeking damages for. Inasmuch as taking another route towards seeking the compensation for lost productivity, such as a litigation process could prove to be way to involving and expensive, and hence not a procedure worth pursuing. I would have prevailed on both the mediator and the representatives of our respondents to consider in terms of monetary value, the amount of money that our company had lost in those 6 months that they had delayed the project. Granted, there was an error in the claim that we were making and as such, I would not have insisted on full compensation of what we were seeking in lost productivity. Nonetheless, I would have pushed for at least 70 percent of this, in view of the lost time and the labor cost incurred in the 6 months that the project was delayed. The fact that the respondent agreed to having made frequent changes to the project files undoubtedly contributed a great deal to the inefficiencies encountered in the project. That, and the fact that the company’s project manager was less cooperative, is reason enough for me to have pushed for a higher settlement.
Beer, JE 1997. The Mediator’s Handbook. New Society Publishers.
Dana, D 2001. Conflict Resoliution. New York: McGraw Hill Professional.
Moore, CW 2014. The Mediation Process: Practical Strategies for Resolving Conflict. San Fransisco, California: Jossey-Bass.
Winslade, J & Monk, GD 2000. Narrative Mediation: A New Approach to Conflict Resoution (1st Edition). San Fransisco, California: Jossey-Bass.