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Applying Pre-Litigation Mediation to Internal Disputes in Pharmaceutical Construction Teams

by Leo Hura
March 2004 Leo Hura
INTRODUCTION

Mediation finds wide application in resolving construction disputes. However, mediation is not aligned with corporate project teams that have, as their primary objective, to complete capital projects on time and within budget. In this article we discuss the opportunities that involvement in team conflict management involving internal disputes provide to mediators that are interested in pre-litigation mediation. We also discuss the benefits that teams and their corporations will derive from mediation towards meeting project objectives. We use a “case study” to illustrate our points.

BACKGROUND

Teams are commonly utilized by industry for a variety of purposes. As our specialty is the pharmaceutical and biotechnology industry, we base this article on their application to capital projects in the pharmaceutical industry. But we are confident much of what we say is relevant to teams operating in other high technology industries.

Because of the complexity of capital projects in the pharmaceutical industry, corporate team members are specialized professionals and are commonly drawn from specialized departments. These technical personnel are excellent at analysis and excel in problem solving. Their parent departments often maintain reporting and administrative control of these individuals during the lives of the projects. The team leader also comes from a functional department and in her role as team leader may report to a senior management capital governance committee. The team works within a charter and an agreement with the capital governance group that is an internal “contract” with milestones, a budget target, and an expected completion date to be met by the team.

The pharmaceutical industry is subject to the Food and Drug Agency and construction projects are regulated and “guided” by Current Good manufacturing Practices or CGMP’s. Some aspects of the CGMP’s are specific enough to dictate the technology the team will utilize in a particular drug manufacturing facility. In other cases there is significant room for interpretation. Teams can struggle with interpretation that triggers conflict, ending in disputes. The CGMP’s play a checks and balance role within the industry between schedule, budget, and adherence to the regulations. Each member of the team is trained in the CGMP’s and QA and Regulatory are specifically tasked to ensure that the CGMP’s are adhered to. Conformance to CGMP’s are partly determined through document reviews. Improper or incomplete documentation results in FDA observations of nonconformance which can delay FDA approvals or result in sanctions against the firm.

Organizationally, teams often contain technical personnel from central corporate groups while manufacturing projects are often executed at remote sites. The site is represented on the team by local technical, manufacturing, and QA personnel. The teams also interface with their contractors and suppliers. The composition of teams, their member’s functional interests, dual reporting responsibilities, and the regulations make for an often challenging environment as we shall see from the case study below.

HYPOTHETICAL PROJECT FACTS

We join our project team after installation of all equipment and software for a process manufacturing the corporations major product. We focus in on the “issues” that develop over automation software “change control” and differing interpretations of the CGMP’s.

Because of the complexity of one critical aspect of the automation software having difficulties at a critical point in the project, the team had decided to bring the software’s developers to the site to make “changes” to resolve a number of “bugs” found during testing. These changes were made, qualified, and reports prepared. They were submitted for review to site personnel and QA.

A site technical reviewer noted the team had not conformed to the site Standard Operating Procedures or SOP governing the documentation of change control. Site QA agreed with the reviewer’s position and both requested the tester’s redo the testing. The corporate testers disagreed. The testers cited a central departmental procedure as their authority and pointed out that the testing was in fact successful. Discussions between the testers and reviewers went back and forth and the conflict became lost to team management in all the other testing and reviewing being conducted.

By the time the issue bubbled up, the opposing positions of the testers and reviewers had hardened. Additional time was spent in team review. Agreement was reached to fly in an “objective” reviewer to collect data, conduct an analysis of the changes, the testing, the results, and the documentation. The reviewer concluded the testing was sound, results good, and that changes could be traced for most of the work. Additional documentation was requested, and where not satisfied, retesting was conducted.

This incident demonstrates the type of issues that come up and how teams deal with it as a problem requiring data, analysis, and technical conformance. Success? Consider the following.

DISCUSSION

  • The dispute strained the working relationship between site reviewers and corporate testers in a period of extremely high activity.
  • At the tester and reviewer level opposing positions continued to simmer and grow through several cycles of; requests for changes to the reports, corrective actions, more requests, and more corrective actions without addressing the fundamental issues in conflict.
  • The disputants took positions and initiated actions without considering the broader implications to testing in other areas of the software tested or what may have been done at other sites. This surfaced as an issue at the team level and caused further delays.
  • Although testers and reviewers both cited the CGMP’s, their interpretations and perspectives differed. For example, the perception of risk differed between corporate testers who saw the greater risk in schedule delay while the site reviewers viewed the risk from a regulatory perspective.
  • Risk aversion at the working level restricted consideration of alternatives.
  • The cumulative effect of these efforts translated into significant delays and increased cost.
  • Senior managers were displeased with the cost overrun and the impact on the relationships between central and site groups. Some stated that other alternatives were available, while others felt the team should have asked for outside intercession.

As outside assistance was an issue that senior managers highlighted why couldn’t that outside intercession include mediation? We overlay mediation on internal team disputes in the next section.

WILL MEDIATION IMPROVE PRE-LITIGATION DISPUTE RESOLUTION?

One way to consider mediation as a viable alternative is to highlight mediations benefit to the teams and corporate management.

  • When used in a pre-litigation context, mediation can be aligned to function in support of getting projects completed which is the primary objective teams are chartered to achieve.
  • Mediation can and does work in pre-litigation contexts and offers teams the following advantages:
    • Decision making stays within the team unless an impasse is reached at which time escalation to senior management can occur.
    • Mediator, as neutral, may open up communications that are less adversarial then otherwise highly charged direct negotiations.
    • Timeliness can be enhanced. For example the need for data is limited to serve the interests and meet needs of each party to reach agreement.
    • Mediator can focus on the issues and needs in dispute while the team leader can continue to stay focused on project activity management. Team leaders, getting too involved in dispute resolution, can wind up losing focus on their project management responsibilities to the point that a project is put at risk.
    • Mediator as team asset. Mediator expertise can be an asset to groups composed of technical personnel who do not usually have dispute resolution training and for whom dispute resolution may be only a, sometimes occurrence.
    • Mediator can facilitate inclusion of decision makers such as functional managers or area heads based on the issues and needs of the disputants.
  • Mediation can be incorporated into an overall program of conflict management within the corporation or between owners and contractors or suppliers.
  • Mediation can be incorporated into a corporate project management process with its own charter, scope of applicability, time limits, and process aligned with the how the firm conducts its construction projects to meet project completion objectives.
  • Even if the mediation ends in impasse, followed by a request for decision by the capital governance committee, the mediation built a basis for the team to present issues, requirements to satisfy needs, alternatives, and a better understanding why impasse resulted. The mediation process results will assist senior managers in reaching informed decisions.

CONCLUSION

Multi-disciplinary and specialized professionals organized into project teams executing capital projects in high technology industries must deal with conflict consistent with their corporate charter to complete projects. Mediators can be a critical link towards success by providing pre-litigation mediation services. Teams can benefit through the mediation process and by the involvement of mediators when mediation is part of a corporation’s project management process and has senior management support. Although there is a gap between the current applications of mediation in litigation related construction disputes and pre-litigation mediation as described in this paper, mediations time in project management is coming. Mediation practice in this area will become a reality through the efforts of mediators to study this area, define application, and when corporate managements recognize and support use by their construction teams.

Biography


Leo Hura, Mediator -JD - Facilitator -Conflict Resolution Training Program Developer practices mediation out of Honolulu Hawaii.  An experienced mediator Leo has turned his atttention to developing training programs designed to inform, educate, and promote the use of peaceful means for avoiding, preventing, resolving conflict in business with business, business with client, and interpersonal relationships.

Leo writes extensively on his blogs, has written two booklets for clients on mediatin and small claims court claims, and numerous articels about the practice and use of colalborative means to resolve conflict. 

http://email.mediate.com/blogs/mediatewithkh



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Website: www.mediate.com/mediatewithlh

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