What exactly is mediation? How does it differ from arbitration?

Many contactors will, eventually, have a dispute with a client that appears unsolvable without going to court. It’s a sad reality about our business but that’s what it is – reality.  To help you frame your thinking a little the next time you find yourself a situation like this, let’s look at how Renovantage has become a front-runner in resolving contractor-homeowner disputes.

What exactly is mediation?  Simply put, it’s an alternative to going to court. In mediation, all parties involved in a dispute meet and try to settle the matter with the help of an independent mediator. The mediator is trained to help people settle conflicts collaboratively and has no decision-making power. Together, the parties participate in the negotiation and design of a settlement. The dispute is settled only if all of the parties agree to the settlement.

Mediation is often confused with arbitration. Let’s look at the advantages and disadvantages of each of these methods of dispute resolution.

The advantages of mediation is that it can be faster, less expensive and the parties share control over both the process and the outcome. Mediation is a private matter and the results will remain confidential. The main disadvantages of mediation are that it does require both parties to co-operate and the results are not binding.

Arbitration does not have to depend on the cooperation of both parties, which is an advantage. And the results are binding. But a disadvantage of arbitration is that it does become more costly as it involves a lawyer and legal fees. Results might not always remain confidential and decisions cannot normally be appealed.

Enter Renovantage. As a Certified Renovantage Contractor, deciding what type of dispute resolution mechanism is necessary for your situation becomes a much more straightforward experience. Renovantage has devised a fast and cost-effective process for resolving these matters. As part of our standard agreement, both the homeowner and contractor agree beforehand to utilize the Renovantage Dispute Resolution Service if they get into a conflict they cannot solve independently. And the parties agree to share equally in the expenses of any appointed mediator and/or arbitrator.

Here’s how it works.

If a problem arises, Renovantage will appoint an independent mediator who will visit the jobsite and meet with the contractor and client, within three business days, to discuss the issues. The mediator will be either a licensed engineer or architect who is an expert in home renovations. If a resolution to the issue(s) can be agreed upon, the mediator will document it and the contractor and homeowner will proceed to implement the solution. The mediator will file a report with Renovantage.

However, if the parties do not agree on problem resolution following a mediation meeting, a binding arbitration meeting will be scheduled to occur within two weeks, assuring a speedy resolution. The independent arbitrator will review the mediator’s report, listen to each party’s position, and issue a judgement. Following an arbitration ruling, it is expected that the Contractor and Client will agree to complete the project per the original contract terms or as amended as a result of the arbitration ruling.

If one or both of the parties do not agree to proceed with project completion then, in the event that a ruling is in favor of the homeowner, Renovantage will ensure the work is completed as per the original contract or as amended by the arbitration ruling.  Ultimately, the project is complete and the homeowner is satisfied by the outcome.

Mike Draper is Canadian Contractor’s business coach. To learn more about Mike’s organization, please visit www.renovantage.com.  Scroll down to the bottom of our home page to see a selection of Mike’s coaching videos (or type “Coaches Corner” in the search bar at the top of the page).