Mediation is a structured negotiation facilitated by a neutral mediator. Unlike arbitration or litigation, the mediator does not impose a decision. The mediator helps the parties identify interests, evaluate strengths and weaknesses, and reach a voluntary settlement. Most construction contracts now require mediation as a precondition to arbitration or litigation. The cost is shared, the time investment is days rather than months, and most construction disputes settle in mediation when both sides come prepared.
The key to productive mediation: come with realistic numbers, a written position statement provided to the mediator in advance, decision-making authority in the room (not "I have to call my partner"), and a willingness to settle for less than the full claim if that closes the matter. Construction-experienced mediators (often retired construction lawyers or judges) are far more productive than generalist mediators. Most AAA, JAMS, and state-bar dispute resolution panels include construction-experienced mediators.