A practical guide for contractors, subcontractors, developers, and project owners.
Are you a contractor, subcontractor, real estate developer, or project owner involved in a construction dispute? Before turning to the courts, have you considered mediation?
WHAT IS CONSTRUCTION MEDIATION?
Mediation is a voluntary and confidential dispute resolution process in which a neutral third party, chosen by mutual agreement, actively helps the two parties find a solution to their disagreement. The mediator does not decide — they guide, advise, and draw on their expertise to reach a mutually satisfactory compromise.
In the construction sector, disputes are frequent and often complex: construction delays, defects, violations of industry standards, cost overruns, poor material choices, defective workmanship, payment defaults, construction legal hypothecs, disputes between project owners and contractors or subcontractors, and more. These situations can paralyze entire projects and result in considerable losses for all parties.
WHY CHOOSE MEDIATION OVER THE COURTS?
Here are some concrete reasons why mediation is often the best option in Quebec's construction industry:
- Speed: A dispute before the ordinary courts (Superior Court, Court of Quebec, or otherwise) can drag on for several years. In construction, time is a precious resource: deadlines are often very tight, and the slightest delay can cause multiple forms of damage. Mediation is typically concluded in a matter of days, enabling a quick and unimpeded return to work.
- Reduced cost: Court fees, legal fees, and expert reports can quickly amount to tens of thousands of dollars. Mediation costs a fraction of that amount. The costs of mediation are shared equally between the parties at the end of the process (art. 615 C.C.P.).
- Confidentiality: Unlike Court proceedings, which are public, mediation takes place in private. The information exchanged remains confidential, protecting the reputation of the businesses and individuals involved. In the event of a failed mediation, the evidence and statements made during the process cannot be admitted before a Court (art. 607.1 C.C.P.).
- Preservation of business relationships: In a sector where relationships between contractors, subcontractors, suppliers, and clients are essential, mediation allows disputes to be resolved without destroying valuable partnerships. Through mediation, the parties settle their dispute in a humane and respectful manner, making it possible to maintain a good working relationship after the conflict.
- Control over the outcome: The parties remain in control of the solution. The final agreement reflects their actual needs, rather than an externally imposed decision. The mediator proposes options based on the needs and interests of both parties.
EXAMPLES OF SITUATIONS WHERE MEDIATION IS THE PREFERRED OPTION
Defects / construction deficiencies
A property owner discovers water infiltration in their basement two years after the completion of the work. The contractor claims the problem stems from a deficient municipal drainage system. Mediation brings both parties together with a building expert, making it possible to identify the real cause and negotiate a repair without going to Court.
Disputed additional work
During a renovation, a contractor carries out additional work they consider necessary, without prior written authorization. The client refuses to pay the additional invoice of $35,000. A mediator helps the parties distinguish what was included in the contract from what genuinely constitutes an extra, and an agreement is reached on half the amount claimed.
Dispute between co-owners and contractor (GCR)
Buyers of a newly built condo discover significant cracks in the foundations six months after delivery. The contractor invokes the liability of the concrete supplier. Through mediation, the parties identify their respective responsibilities and agree on a jointly funded repair plan, avoiding a legal battle that could have lasted several years.
Violations of industry standards
An electrical subcontractor installs a wiring system that does not comply with the Quebec Construction Code in a commercial building. The general contractor refuses to pay the contract balance and demands that the subcontractor bring the work up to code at their own expense. The subcontractor disputes the assessment of the corrective work. Through mediation, the parties agree on a shared cost arrangement, avoiding a costly judicial expert review and a prolonged work stoppage.
Poor material choices
A real estate developer discovers, two years after the delivery of a condo project, that the exterior cladding installed by the general contractor is prematurely deteriorating due to a material ill-suited to Quebec's climate. The contractor maintains that the product met the specifications in the tender documents. Mediation allows both parties, assisted by a building envelope expert, to determine whether the fault lies with the material choice, the installation, or the original specifications, and to agree on a replacement plan without resorting to the courts.
HOW DOES MEDIATION WORK ?
Opening: The mediator explains, in the presence of both parties, their role, the rules that apply to the process, and the confidentiality requirements (art. 609 C.C.P.). Each party then presents, without any particular order, value judgment, or criticism, directly to the other, the facts that led to the dispute.
Exploring the issues: The mediator helps distinguish the positions from the interests and needs of both parties, separately in caucus. They also identify the points on which the parties agree, as well as those on which they disagree. The goal is to bring mutually satisfactory solutions and compromises to the surface.
Negotiation and solution-finding: The parties, generally through the mediator, propose options to each other, evaluate the other party's proposals, and make compromises. The mediator reframes, rephrases, and defuses tensions.
Drafting the agreement: If an agreement is reached, it is put in writing on the spot or shortly thereafter. The agreement is then binding and enforceable between the parties.
In an industry where every day of work stoppage costs money and where margins are tight, resolving a dispute quickly can make the difference between a company's survival and its failure. Construction mediation is not just an alternative to the courts — it is a smart business decision that protects your interests, your relationships, and your time.
Where to start?
You don't have to navigate this process alone. Fiset Legal is a firm with a practice in construction and co-ownership law. Our accredited mediation and arbitration specialists will guide you toward the fastest and most cost-effective solution for your situation. Consult your lawyer or contact us for an initial consultation.
Construction mediation: resolve fast, resolve well, and get back to work.
