IT Dispute? Don’t forget about mediation

It cannot be denied that IT projects do not always go well. Delays, missing functionalities, different expectations, disappointing performance and discussions about the costs of extra work are only a few reasons why a client and a supplier can become adversaries.

If neither talks nor escalations lead to a solution, going to court seems almost unavoidable. This is indeed the best route in many cases. The court will eventually take a final decision as to who wins and who loses the action.

However, winning a court case is not always the best option imaginable. The court is bound by the claims of the parties, and in fact the law gives parties only limited options. An agreement may be terminated for breach of contract or set aside on grounds of error, or a claim may be brought for damages or payment of outstanding invoices. That is basically all.

Of course it is possible in theory to claim performance of the project obligations, but in many cases this will not be realistic, as the dispute is often precisely about the project not going well. Before the parties can go on, something will have to change in their cooperation, and the court is unable to impose this. The court is bound by the substance of the agreement.

In all cases where a party’s actual interests are not necessarily served by being legally proved right, mediation would be a good alternative.

In short, mediation is a process in which the parties have talks under the guidance of an independent third party – the mediator – to find a solution for the discussion points that does the interests of both parties sufficient justice. These interests may be very diverse. Sometimes the greatest need may be to have the project completed, perhaps in a modified form. The interest may also lie in preserving confidentiality, or in removing a financial claim from the company accounts as soon as possible. Other incentives for reaching a solution may be to earn a bonus, or to keep supervisors or shareholders happy.

Mediation has a number of clear advantages compared to court proceedings. First and foremost, the process is confidential. Everything that is said or submitted in mediation cannot be used in court later on.

Mediation is also a lot faster than court proceedings. After a few sessions, it should be clear within a few months whether a solution can be found. If a party doubts between mediation and the court, mediation may also be tried as an interim step. Even if no solution is found, not much time will be lost.

Since mediation need not take long, the costs will not be so bad either. Of course, the mediator has to be paid and the courts do not. The costs of the mediator are usually shared between the parties. The costs of hiring attorneys in particular will be much lower than they would be in full court proceedings.

We wish to add the following about the role of attorneys. Because the point is not to be legally proved right, but to examine the interests of the parties in order to arrive at a good solution, mediation does not require an attorney to attend the sessions. However, attorneys may play a valuable role in the preparation of the parties. It is then up to the parties and the mediator to decide jointly whether attorneys (or other advisers) will attend the sessions or not.

If they do, special attention should be paid to the following point. It is crucial for all attendants to refrain as much as possible from pleading their legal positions, as this is not (or hardly) helpful to find solutions. As attorneys are usually focusing on the legal points, it will be quite an effort for them not to start pleading, but to assume a more guiding role. If they manage to do this, attorneys may have an important added value.

To some people, mediation still has a bit of an undeserved soft image, while experience shows that failed IT projects often arouse fierce (personal) emotions. These emotions should first be taken away before solutions can be considered. A good attorney can guide his client through this, sometimes painful, process with the appropriate detachment. If you are considering mediation, or if you are being asked to participate in one, don’t hesitate to contact us. We not only have qualified and certified mediators in the team, but many of our attorneys also have first-hand experience with guiding clients through a mediation.