While lawsuits and expert witnessing has become an unfortunate cottage industry for the watershaping industry, long-time mediator and watershaper, Curt Straub, urges professionals and their clients to think in terms of “alternative dispute resolution” methods ahead of turning to civil court action. Doing so, he says, saves time, money and frustration.
By Curt Straub
The pool construction industry has a well-earned reputation for its bitterly litigious nature. As is true of contracting across a broad spectrum of project categories, building bodies of water all too frequently leads to conflict and often legal action as a result. Contractors and consultants offering expert witness services in such cases abound and there is never a shortage of conflicts being litigated at any given time. It is unfortunately one of the industry’s defining characteristics.
The root causes of these conflicts differ from case to case – from construction defects, disputes over payments, product defects, and non-performance, among others – but the results are often the same. Attorneys and expert witnesses make bundles of money, time is wasted, reputations are tarnished, relationships are ruined, and ultimately homeowners are left regretting ever having considered owning a pool.
Technically speaking there are winners and losers but, in truth, no one truly benefits.
This is why I’m a staunch advocate of “alternative” dispute resolution (ADR). Rather than diving straight in to a lawsuit, ADR means trying either negotiation, mediation or arbitration before you file a suit in a court of law. It’s called alternative but I truly believe it should be considered “primary” because these measures are all preferrable to going to court, which as we all know can be extremely expensive, time-consuming and counterproductive, if not outright destructive, in so many different ways.
When you resolve a conflict without going to court using one of the three ADR avenues, almost inevitably it will save money, reduce risk and save time.
In terms of pure dollars and cents, legal action is notoriously expensive. You have to hire an attorney(s), pay court fees, and likely engage expert witnesses, all of which can easily add up to five figures, or more in some cases. And you’ll have to spend your own time wrangling with the entire mess, which can amount to a tremendous expense.
Whenever you step into a courtroom, you can find you and your company at tremendous risk, whether you’re the defendant or the plaintiff. When you go in front of a judge and jury, you have little control of the outcome, or the dollar amount awarded as a result of the verdict. And if you lose, you might have to pay the other side’s attorney fees and expenses. And, ADR will typically take a fraction of the time needed to bring or defend a lawsuit, which can drag on for months or even years when verdicts are appealed.
While all three ADR methods offer big advantages over fighting it out in court, they too have their own advantages and in some ways, disadvantages. It’s helpful to choose the best path for your situation. Negotiation is an interactive communication process that takes place when two or more people attempt to resolve their apparent concerns, but differing desires. This is the time for determining when to give in order to get, so to speak, and it can serve as a foundation for other ADR processes. When disputes arise, it’s common for both sides to immediately assume a combative stance and prepare for a fight. While negotiating is informal and may not lead to resolution, it’s certainly worth a try because if you do come to an agreement, the problem will have been solved with the least amount of effort, time, risk and expense.  Mediation involves a neutral third party, the mediator, who facilitates a structured negotiation. The parties themselves agree on the outcome, which is usually legally binding. Many contracts include mediation clauses in the case of a dispute. Mediation is the preferred ADR path for many people in that you have the advantage of a neutral third party participating, yet the outcome still resides with the parties themselves. It is very helpful to have a mediator who has experience in the industry.  Arbitration involves a neutral third party, a person or panel (usually of three) who makes the decision for you. It’s less formal than a trial, but through arbitration you are agreeing to give the arbitrator control of the outcome. The ruling is typically based on a strict interpretation of laws and standards, and once handed down, cannot typically be appealed.
AGREEING TO AGREE
Having worked in ADR for more than three decades, I have found that mediation has the best chance of reaching a mutually acceptable outcome. In mediation the old saying, “agree to disagree agreeably” applies. It is very much an exercise in good faith. I’ve heard some people ask what good is a mediator is they don’t make the decision for you? The answers to the question are important.
When parties decide the outcome there is typically less resentment and animosity as a result. The parties can be creative and will often devise settlements that are personalized. Yet, the mediator is there to facilitate the negotiation (??) and risk analysis, and to possibly offer different suggestions that can break a seemingly insurmountable impasse.
Other advantages include being able to select a mediator who is an expert in the field. Both parties are free to give their perspective without rules of evidence or civil procedure. And, you are eliminating the risks involved with a jury or judge making the final decision. If there’s no resolution, you can still opt for arbitration, or go to court as a last resort.
One of the biggest advantages of mediation is that the parties are often able to salvage their working or even personal relationships. By mutually authoring a resolution, the anger will often subside in favor of mutual respect because both sides were able to come to the table and figure out a solution without the waste and frustration of a lawsuit. By soothing tensions, future interests, even partnerships, can be preserved; and, businesses and reputations don’t suffer the angry slings and arrows of resentment and anger.
In the aftermath, many mediation participants will find that defusing the dispute and lowering the volume of the acrimony is one of the biggest deterrents to the courtroom door and the gavel.
PROCESS & PREPARATION
While mediation is a relatively open-ended and entirely results-oriented process, it does have structure and is best served by deliberate preparation, by both parties.
It begins with a short meeting between both parties and the mediator who explains the process. In some situations, each party, or their attorneys, give a brief summary of the dispute from their perspective. Next, each party has the opportunity to submit a confidential statement to the mediator describing the respective strengths and weaknesses of the case, and to offer a settlement range or other ideas that might be part of the resolution. Also, both parties will have an opportunity to meet individually, and in private, with the mediator.
Mediators will recommend that each party individually determine their interests and that of the opposing party, and identify goals, leverages and the type of future relationship they would like to have with the opposing party. These preparations enable the mediator to fully prepare and ensure that each party has had a full opportunity to lay the groundwork for the mediation with greatest chances of coming to a mutually acceptable solution.
It is always important to be aware of the resolution method called for in a given contract, and to understand the process and possible implications, such as the differences between mediation and arbitration. There can be costs involved with formal ADR organizations and in some cases local laws can stipulate the process and possible outcomes.
Legal action always exists as a back-up if ADR methods don’t work, although arbitration will often be found binding in a subsequent legal case, barring some significant legal irregularity. I’ve personally found that in mediation especially, you’ll have the best chance of a positive outcome, or at least one that won’t keep you awake at night or cause an ulcer.
The other important part of this discussion centers on avoiding conflicts in the first place. Tips for avoiding construction disputes include: Telling the truth: Speaking and acting in good faith and honesty is the cornerstone of avoiding disputes. As fundamental as it sounds, there simply is no substitute for honesty and integrity.  Avoid ambiguous contract language: Contract language is one of the most common causes of disputes. The contract should clearly spell out provisions for compensation and extensions of time due to owner delays or change orders, as well as unexpected site conditions.  Project management: It’s crucial that project managers and construction crews follow the procedures and mandates spelled out in the contract. Again, change order procedures are a common stumbling block. All parties should comply with notice and approval requirements, and additional costs must be accurately documented.  Accurate scheduling: Establishing a schedule from the outset creates expectations and provides a baseline framework for all involved, including consultants, construction crews, subcontractors, suppliers, and especially the homeowners. Identifying possible delays early on based on a solid schedule can be critical in avoiding disputes and managing expectations.  Know the law and regulations: This is good advice for all aspects of business, but in construction it can be particularly critical. If, for example, you’re designing or building a public pool facility, courts may assume that contracts are based on applicable laws and regs, even if they’re not spelled out in the contract.  Train project managers: Project managers should be intimately familiar with contractual obligations on a given project. Not only are they in charge of what transpires on the jobsite, they are also in the best position to recognize a problem before it festers into a full-blown conflict.  Use technology to your advantage: Today’s design and project management technology affords a dramatically increased levels of shared information and collaboration. Building information modeling (BIM) allows all project team members to see how project changes impact their work immediately and helps avoid costly disconnects in design and installation.
Despite best efforts, installing bodies of water can, and probably always will, result in conflict. There are so many areas where things can go wrong; and, to be perfectly candid, there are still contractors who will cut corners to increase their profit margins.
There are other factors to consider in this day and age. The industry is seeing an influx of young professionals who may lack the experience needed to stave off trouble ahead of time. We are currently challenged by supply chain delays and shortages, which can impact schedules, and we’re facing an ongoing labor shortage, meaning that sometimes the work is being done by unskilled laborers. All of these factors sew the seeds of potential conflict.
The bottom line is that, more times than not, it pays to focus on avoiding disputes as a business strategy and then defusing the disputes that do arise ahead of filing, or responding to, a legal complaint.
Curt Straub has been in the pool and spa industry since 1963, beginning his career working for his own design-build company. In 1990 he founded Aquatic Consultants, a Kansas City-based design firm. He is an experienced pool inspector, member of the American Concrete Institute’s Kansas chapter, a Certified Pool Operator, and an experienced mediator.
Photo credits: Stone arch by finepic | Shutterstock; Balancing the scale by Andrii Yalansky | Shutterstock