Litigation serves an important purpose and is often necessary. However, going to court is not always the best or even the most economical method for dealing with construction disputes.
Even informal negotiations can often be successful in overcoming disagreements, but many parties prefer an option that offers more structure when attempting to resolve disputes. As such, construction arbitration is often a viable and preferred option for avoiding costly and time-consuming litigation.
What is Arbitration?
Arbitration is a non-judicial process that allows parties to resolve their dispute(s) outside the court system through a neutral arbitrator generally selected by the parties involved.
What are the Benefits of Arbitration?
While arbitration trial has certain similarities to a court trial, it has a number of advantages over court litigation, such as these four.
#1 Arbitration can be less time-consuming than a lawsuit.
The litigation process can take many months to complete due to filings of motions, discovery processes, scheduling issues, etc. Arbitration tends to be a more efficient and economical means of resolution for all parties involved by providing a defined structure.
#2 Arbitration is a more informal process compared to trial.
While similar to a trial in terms of presenting evidence and testimony, arbitration tends to be a more relaxed process overall. The less formal nature of arbitration may also be a benefit for those who feel intimidated or overwhelmed by the idea of court proceedings. In fact, the entire arbitration process could be held in a more comfortable setting, such as an office or conference room.
#3 Arbitration is generally less expensive than litigation.
Arbitration can be more cost-effective than filing a lawsuit. The speed at which the parties can schedule and conduct an arbitration typically translates into the attorneys billing less time and a significant reduction in overall cost. Generally, it can be a simpler, faster, and less expensive option than litigation.
#4 Arbitration allows for a greater degree of confidentiality.
Arbitration is a private process, and the specifics of the dispute are not released to the public. As a service-oriented industry, construction companies lean heavily on their reputation and customer reviews. Disputes can result in damaging allegations that would become public through litigation. Arbitration, however, is confidential and allows the parties to address the dispute without damaging reputations.
Helping You Decide on the Best Course of Action
Many construction companies include a clause in their contracts requiring arbitration to resolve disputes to avoid costly and time-consuming litigation, but that is not always the case.
No two scenarios are the same, and arbitration may not be suitable for every construction dispute. A skilled attorney can assist you in navigating this complex topic. Contact our office today to set up a consultation if you need assistance with a construction matter or any other legal issue.
