Pallett Valo’s Anna Esposito was made for mediation

Resolving construction-related disputes via mediation a great alternative to litigation
Pallett Valo’s Anna Esposito was made for mediation


This article was created in partnership with Pallett Valo LLP

If there’s one thing Anna Esposito can say as she embarks on her 38th year of practice, it’s that she was made for mediation.

“I’ve always had a dispute resolution bent,” Esposito, mediator and certified specialist in construction law at Pallett Valo LLP, says. “Resolving disputes at earlier stages makes practical, common sense. People can be made to see reason, and nothing is too complicated – you can resolve anything.”

Over the course of her career, Esposito became more interested in alternative dispute resolution (ADR) mechanisms for construction-related disputes because she recognized a pattern: there was always a psychological component in her files, and she’s always had an interest in “how people tick.” Although it’s assumed large construction companies operate on a very business-like model, “there are human beings behind everything that happens on a construction site,” she says, adding that there’s always a point at which something happened that caused the downward spiral.

“If you could have spoken to the parties involved at the time of that event and figured out the underlying sentiment that caused it, you might have been able to unravel it without a formal dispute –  and I’ve found it’s often still possible to do that afterwards.”

A concerted transition

Esposito has worked most her career as a construction litigator and had a front-row seat for its evolution. Everything associated with the industry has become more complicated and difficult, she notes – including the disputes. With multiple parties involved, the technical nature of the subject matter, the complexity of the construction contracts, and the existing backlog in the courts, litigation is not cheap and it’s not fast. Esposito’s natural instincts are practical as she evaluates the big picture to determine what options best serve her clients.

“I want to navigate from A to B quickly and economically and achieve a result that net-net is better than dragging something through the system,” she says.

In her mind, a negotiated forum where she brings the parties together to conclude a consensual resolution is better than going to court or even to arbitration where someone dictates what the solution is. To that end, Esposito’s practice has also evolved from adding mediations in where she could to recently deciding to hand over her larger litigation files to other members of the firm’s construction group – “Our team is robust, with depth and breadth, so I have that luxury,” she notes – and free up more space for mediation. 

“Over the last few years, it’s been a concerted transition because that’s where I think I can add value,” Esposito says, adding that her expertise in the construction industry is a big draw for those looking for a mediator who “speaks their language.”

“When I talk to the parties, they can see I know their project,” she notes. “At the start of every mediation, I explain what I understand to be the issues and the amounts at stake. I demonstrate I’m invested in their file and know the technicalities.”

Though demand for mediation has grown – especially over the COVID years – and will continue to grow as the courts grapple with insufficient resources, Esposito’s gradual shift in practice stems mainly from personal preference and her deep-rooted belief that it’s the way things should go. While it’s true time is money, the cost to human lives and the impact on people’s psyche is the most concerning factor. Having disputes hang over them for years, especially for small businesses where it takes a more personal toll, is a hard cost to quantify, Esposito notes, and she’s happy her interests marry up with the increased need.

“When people call now for mediations, I have lots of availability because I’ve purposefully set it up that I don’t have other proceedings holding me up,” she says. “I want people to know that, if it works, mediation truly is a better way. At the very least, it should be tried.”  

Thriving on challenges

There’s a plethora of increasingly complicated processes to navigate, such as the interim adjudication under the Construction Act or a trend of establishing combined dispute resolution boards at the beginning of long projects, but, for Esposito, the biggest challenge is that you’re dealing with human beings. Sometimes she’s faced with parties that are before her because they must partake in mandatory mediation to proceed to court, and they don’t come with the right frame of mind. Some parties do come to the table in good faith but may have counsel that’s opposed to the mediation, or vice versa.

“I have a short amount of time to somehow turn around those resistant minds and convince them it’s a viable process with many benefits,” Esposito says. “It can be difficult to massage different personalities and get buy-in. The added element of the parties’ lawyers is also an important variable because they can facilitate the process, or hinder it, depending on their stance.”

But Esposito thrives on the many and varied challenges. Unlike the black-and-white court process, where the remedy is a money judgment that the successful party must enforce or the losing party appeals, tying everything up for another few years, mediation allows creative ways to bridge the gap. In one mediation, it came down to the last $10,000 and nobody budging as the deadline approached. Esposito managed to get one party to donate the sum to a charity of the other party’s choosing and settled the case. In another, one side argued the roof was perfect while the other side’s engineer said it would have a shortened life; the solution was the roofer extending the roof’s warranty for a few additional years. These are great examples of the power of mediation, she notes, where you can “orchestrate a resolution that is novel, creative, and addresses the particular concerns – there’s always a way.”

Finally, Esposito never underestimates the psychological component. How many cases go off the rails because someone believed they were being disrespected? Mediation is often the first time the parties have been in the same room since things blew up into litigation, and it provides a platform to air their grievances. In some cases, a simple apology can go a long way.

“When I have that aha! moment, figure out what’s motivating them, and patch it up, I feel almost euphoric,” Esposito says. “I’m curious and I like a puzzle – when the pieces fit, I feel accomplished.”

Bringing mediation to the fore

The bottom line is construction litigation is difficult – who breached, who repudiated, how much did something cost to complete, did the parties try to mitigate, are there enough witnesses, is every “i" dotted and “t” crossed? Mediation allows for better outcomes, and, importantly, it’s a confidential, without-prejudice process. There’s no record of what happens in the forum, and the mediator cannot be compelled as a witness in later litigation.

“I use all the arrows in my quiver, and if a resolution comes about, it’s counsel who then create the settlement agreement and take other necessary steps,” Esposito says, calling herself a dog with a bone when it comes to her role. “My job is to get to the key component parts of a settlement. I have a great track record of settling.”

With a passion for teaching, speaking at forums, hosting seminars, and sharing information to those in the construction industry – “I enjoy taking complicated subjects and digesting them down to their component parts, in a way that laypeople who didn’t go to law school and haven’t practised in the area for many years can appreciate and understand,” she explains – Esposito is on a mission to educate the profession and the industry on the benefits of mediation as a means of resolving construction-related disputes. Whether it’s lack of knowledge or misunderstanding of how it can help, she finds clients and even some lawyers don’t have the process at the front of their minds. She’d like this to change.

“Lawyers may not be assessing their files with a view to a resolution other than going through the Rules of Civil Procedure, start at A, and end up at trial,” Esposito says. “I want to bring mediation to the fore as a great alternative – especially in the context of construction disputes – and open the minds of lawyers and litigants to take those difficult files and get them to someone like me who might be able to make a resolution out of it.”