Regarding question 1 of Part 3: I understand that the first step for a lawsuit would typically involve mediation. However, I’m confused by the second part of the answer, which states “concurrently with filing for binding dispute resolution.”
As mediation results are not binding, and arbitration results are, I’m completely confused by the answer to this question. Could you please clarify this point?
Thank you!
Per AIA B101 contract, “Article 8 Claims & Disputes”, you agree to Mediation as the first step per 8.2.1. However, as you mentioned above, Mediation is not legal binding; only Arbitration and Litigation are. Because of the extreme nature of the claim in the example, the right answer is scenario specific, since this is a major issue that has to be corrected and has significant cost and schedule implications, a binding dispute resolution (i.e. litigation) has to be pursued by the Client. Something this major could not be handled only through Mediation. That said, due to the urgency and severity of the matter, the Client has to expedite their claim (hence the term “concurrently”), however, the FIRST step per 8.2.1, states, “Any claim, dispute or other matter in question arising out of or related to this Agreement shall be subject to mediation as a condition precedent to binding dispute resolution”. Therefore, per the contract, this is the first step procedurally the Client has to take to get to a binding dispute resolution (imperative and inevitable that money and time will be spent to resolve the issue).