Mediation Process for Contract Dispute Resolution in Real Property

[This document is applicable for all construction contracts which are subject to GC 8 Dispute Resolution.]

The Real Property Branch (RPB) has developed standard guidelines for a generic mediation process to assist project managers (PM) and contracting officers in cases where the mediation process has been accepted as the mechanism of choice for the resolution of disputes but where no mediation process has been pre-established within the contract.

Disputes may arise between PSPC and its consultants and/or contractors on any project regardless of their scope or complexity. The negotiation process remains the optimum choice within RPB to resolve a dispute or claim. Every effort should be made to achieve settlement via negotiation. While much time and effort is required to negotiate a settlement of a claim, it is usually far less than the time, cost and effort involved in properly preparing and presenting a case to a mediator, arbitrator, or the courts. In the event that negotiation is unsuccessful, the next process to be considered (if requested by either party) is mediation. Binding arbitration (rather than litigation) should be considered as a last resort.

The centralized NCA Claims Prevention and Management Unit (CPMU) has developed standard procedures to assist project teams with the mediation process in the resolution of disputes where no mediation process has been pre-established within the contract. In addition a generic Mediation Agreement is available (PSPC-SPAC 134 PDF 524B). Project teams are encouraged to utilize these procedures in an effort to:

Mediation Process

[Note: For construction contracts under PSPC's Dispute Resolution GC 8, the stipulated steps and procedures of the contract are to be followed].

There can be more than two parties involved in a dispute. It should be noted that a mediator's role is only to facilitate negotiation. A fully qualified mediator need not necessarily be an expert in the area of dispute, however at the discretion of both parties may nevertheless be retained in that capacity.

The mediation process begins when the parties agree (in writing) to mediate, and ends when any agreed-upon settlement has been duly concluded or can be terminated by the mediator or any of the parties at any time. The mediation process normally includes the following steps:

Mediation Cost Responsibilities

Costs may vary with every mediation process. The following cost responsibilities identify the existing norms:

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