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Options to resolve construction disputes

On Behalf of | Mar 18, 2023 | Construction Contracts

In the construction industry, disputes are quite common. When the conflicting parties are unable to resolve the issue on their own, there are various ways they can approach resolution.

Most people are familiar with litigation, but there are alternative resolution methods. There are certain things to consider when deciding which method to go with.

Dispute resolution options

According to FindLaw, parties that want to avoid the expense and stress of a court battle may want to choose mediation or arbitration. Although they both involve neutral third parties, their approaches are different.

In mediation, a mediator guides discussions between the disputing parties. Ultimately, the parties come up with a fair solution together, but the mediator helps them come up with creative remedies and assists with conflicts along the way. Most mediation decisions are non-binding, which means they are unenforceable by law. However, the parties can choose to make an agreement binding.

Arbitration is similar to an informal court process. Arbitrators serve as neutral judges, and it is common to have three of them. They listen as each side presents its case and evidence, and then they take a vote. Arbitration decisions are generally binding.

The Harvard Law Program on Negotiation discusses that attorneys dominate litigation, which consists of each side presenting evidence to a judge or judge and jury, who then make a ruling. It is possible for this decision to go through an appeals process.

Considerations to determine which method

Three things to consider when choosing which resolution method to pursue include:

  • Each party’s goals
  • Which method is best for overcoming barriers to negotiation and settlement
  • Which process is most effective for reaching a beneficial outcome

Cost and time are also considerations. Litigation is more expensive and time-consuming than alternative methods.