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Going to court is an expensive business. But nearly a third of construction disputes that reach the Technology and Construction Court (TCC) are settled by mediation before a judge becomes involved.

Mediation is a procedure whereby a neutral third party helps those in dispute to reach a resolution. Unlike other forms of dispute resolution, mediation is non-binding on the parties without their consent and the mediator cannot impose a settlement.

Settling early saves money. Respondents to a survey were asked how much they had saved and the figures varied between £25,000 and £300,000, depending on the stage at which they had settled.

These are the initial findings of research by Nicholas Gould, a partner at Fenwick Elliot, for King’s College, London, where he is a senior visiting lecturer. The results also show that, contrary to anecdotal evidence, most settlements are not reached on the court steps. Instead, there are four points in the litigation process when settlements are likely to be reached: during exchange of pleadings (33%); during or as a result of disclosure (14%); as a result of payment into court (10%); and shortly before trial (24%).

Gould also reports that the nature of the cases coming before the court differs from 10 years ago, when the most common issues leading to litigation in the TCC related to payment, variations, delay and site conditions. Today the most common issues relate to defects (28%), design issues (15%) and professional negligence (15%).

‘Perhaps it is the case that time and money-related issues are now being dealt with by way of adjudication, while defects, design and negligence are remaining within the court’s domain,’ comments Gould. ‘This might be because those issues are frequently more complex, but often multi-party and therefore not easily suited to adjudication.’

Gould’s research will continue until the summer of 2008 and a more detailed report is due in late 2008. The aim of the research is to find out when mediation offers a real alternative to litigation, assist the court to determine at what stage it should encourage mediation and identify which mediation techniques are successful.