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Using mediation or arbitration to settle a construction dispute

On Behalf of | Jun 18, 2021 | Construction Contracts

When you find yourself embroiled in a lawsuit with a contractor or involved in another type of Texas construction dispute, you may have concerns about how much money and time you may lose to the conflict. However, not every construction dispute has to lead to litigation.

Per Construction Executive, many contractors, homeowners and others involved in construction disputes save time and money by trying alternative forms of dispute resolution. Mediation and arbitration are two common forms of alternative dispute resolution. However, some important differences exist between them.

Mediating a construction dispute

Mediation involves you and your opposition coming together and meeting with a neutral third party in an attempt to agree about your issue. Mediation is a relatively informal process. The mediator does not issue any type of ruling on the matter. Instead, he or she gives all parties involved an unbiased opinion that may help you come to terms about your disagreement. It is worth noting that decisions made during mediation are not binding.

Arbitrating a construction dispute

Arbitration is another alternative to litigation. Like mediation, arbitration involves all parties embroiled in the construction sitting down together with an unbiased third party. However, the main difference between mediation and arbitration is that, in arbitration, the third party issues a binding ruling rather than suggesting how to move forward. In other words, any decisions made by the third party are binding and have legal implications.

While undergoing mediation or arbitration in a construction dispute may save you time and money, these options may not be suitable in all situations.