Construction projects can be highly complex endeavors, involving multiple parties and millions of dollars. When disputes arise in the construction business, they aren’t easily resolved.
A civil trial is the traditional method of resolving construction disputes, but it has some disadvantages. It takes a lot of time, and it can be very expensive. When the parties leave the ultimate decision up to a court, the process can take months or even years, and the costs can be astronomical. It is also somewhat unpredictable, as the court, not the parties themselves, makes the final decision.
To avoid these problems, most businesses in litigation resolve their disputes out of court through negotiation. But this method can be time-consuming and expensive, as well.
Alternative dispute resolution: Mediation
In recent years, businesses have increasingly turned to alternative dispute resolution methods. The most common are mediation and arbitration. Many contracts today require the parties to attempt to resolve any disputes through mediation or arbitration before going through the traditional litigation route.
Mediation is a form of guided negotiation. The parties negotiate with the help of a trained mediator, who is a neutral third party. The mediator does not decide the issues in the dispute, but rather facilitates the discussion, guiding the parties toward an agreement. Ultimately, the goal is for the parties to reach this agreement and solidify it in the form of a new contract. However, if they cannot reach agreement in mediation, they must move on to trial or another way to resolve their dispute.
In some ways, arbitration is like a trial. An arbitrator’s role is similar to that of a judge: a neutral third party who hears the arguments on all sides and renders a decision. The parties agree in advance that the arbitrator’s decision will be binding.
Compared to trial, arbitration is less formal and generally faster and less expensive. However, it’s also more final than a trial. Arbitration generally does not present the option for any of the parties to appeal the dispute if they are unhappy with the arbitrator’s decision.
Business have a lot of issues to consider when choosing how to resolve their dispute, even before they get into the details of the dispute itself. An attorney with experience in construction law can help businesses understand their options.