When it comes to construction projects and contracts between parties, disagreements are inevitable. Especially in construction, delays happen often, and many times that can cause problems between the contractor and the client.
Litigation is used often as a way of resolving disputes. However, there are other ways to do this. Arbitration, a form of alternative dispute resolution, is one of those ways.
Arbitration is unique in that it is not like the courtroom, but it is also not mediation. It is typically binding by law unless a party can prove that the arbitrator’s decision was against the law or standard industry practice. Even then, judges tend to respect the arbitrator’s decisions because it is a very valid form of conflict resolution.
There are many reasons why you should consider arbitration, including:
- Arbitration is private and customizable by the parties. The parties can choose an arbitrator or panel of arbitrators.
- The American Arbitration Association has a manual specifically for construction arbitration, which provides a structure for these proceedings.
- Arbitration is much less expensive than traditional litigation and less time-consuming than filing and going through a lawsuit.
Considering the nature of construction conflicts, arbitration is often an ideal way to solve problems.
Even though some cases are best suited for litigation, construction arbitration is an effective way of dealing with conflicts between contractors and clients, and other contracting parties. It is worth considering if you find yourself in a position where you and someone you have contracted with have a disagreement.