5 Reasons Why You Need Arbitration for a Construction Dispute (Guest Post)

Today we welcome another guest author to the blog– Jonathan Newby.  Jonathan is in the brokerage business, and runs a website relating to brokerage fees.  Thanks Jonathan for your sharing your thoughts today.

5 signArbitration may be a better alternative to some construction disputes, assuming that you use a qualified and skilled arbitrator or arbitration panel.  Here are five benefits for using arbitration over litigation:

  1. Arbitration means that the decision maker is an experienced industry professional instead of a lay jury.
  2. Arbitration can provide better protection for your assets by minimizing your risk of large losses sometimes seen with jury verdicts.
  3. Arbitration can provide flexibility in scheduling, versus court where you are told when and where to show up without much room to negotiate.
  4. Arbitration can put an end to your case faster.  The time taken by an arbitrator is usually less than that to get a case to court to resolve a construction dispute.
  5. Arbitration costs can be much less when compared to the one charged during any other legal process like litigation.

These are five reasons why arbitration may be better for your construction dispute, so consider using an arbitration provision in your next construction contract.

Editor’s Note:  As I’ve previously noted, there are pros and cons to arbitration in lieu of trial.  The better venue is in part based on the type and size of contract, as well as numerous other subjective considerations.  Discuss whether arbitration is appropriate for you with your construction law attorney.

Thoughts, comments, or questions?  Drop Jonathan or me a note in the comments section, below. 

Photo (c) freefoto.com.

 

 

Add a comment »4 comments to this article

  1. Until the state courts develop a court branch of judges skilled in construction and professional services disputes like they have in England (Construction and Technology Court) arbitration will always be preferable. There are a number of services outside the AAA that offer skilled arbitrators and nothing precludes the parties from agreeing to rules of arbitration and agreeing on one or more arbitrators depending on the size of the case. In a recent large contract, it provided for arbitration of all disputes under one million dollars before a single arbitrator and litigation of all those above one million dollars without a jury. In either event you get a single person providing the final result. Would you rather have the randomly selected judge or a person skilled in construction and professional services decide your case?

    Reply

    • Thanks for the comment. Yes, private arbitration can be a good solution to some of the concerns with both judges and arbitration panels. We have a business court here in North Carolina for complex matters; would be great to have one for construction disputes but doubt we’ll see that anytime soon.

      Reply

  2. I am not a big fan of mandatory arbitration myself. I feel that parties need the flexibility to distinguish between those cases that a judge can handle and those that truly need the expertise of a construction or legal professional. In many of my cases, the filing fees for AAA or other arbitration (not to mention paying 1 to 3 judges) can get prohibitive. I have also found that arbitration can often be just as expensive if the rules are not set out with clarity.

    Reply

    • Thanks for the comments, Chris. Yes, AAA arbitration in particular can create as many problems as it solves sometimes. I do think private arbitration can be helpful in smaller cases, but you can always agree to it when disputes arise if you don’t have a provision up front in the contract.

      Reply

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