Construction projects tend to attract disputes. Whether it’s a dispute related to contracts, faulty work, or work left uncompleted, members of the construction industry often find themselves at odds with their clients, prompting the need for legal recourse and dispute resolution.
Construction arbitration is one such legal recourse and arbitration clauses are often included in construction contracts due to the success of this alternative dispute resolution method in resolving construction-related disputes. As an alternative to litigation, construction arbitration has the same enforceability as a judge’s decision in construction litigation, and is often far less costly (both in time and money).
The arbitration process begins when one party demands arbitration in writing. If an arbitration clause was included in the construction contract, the other party must comply. If an arbitration clause was not included in the construction contract, the other party has a choice in whether to participate in arbitration or seek litigation as the dispute resolution process.
In cases where construction arbitration is chosen as the mutually agreed-upon dispute resolution process, both parties are usually able to submit their choices for a specific arbitrator or panel of arbitrators. In most situations, and ideally, the arbitrator or arbitrators chosen have extensive experience in the construction industry.
Following the choice of arbitrator or arbitrators, the arbitration proceeding begins and is similar to a court proceeding. Both parties will be allowed to make a statement and present evidence, and can be cross-examined by the other party. The arbitrator then makes a ruling that is legally binding to both parties.
The benefits of construction arbitration versus litigation are often what makes arbitration more appealing. The arbitrator or panel of arbitrators will likely return a decision regarding the case within a few days, or at most, within a month. This makes the arbitration process quicker than litigation, which can often take months or even years to complete, especially if court dockets are crowded with other cases.