- posted: Dec. 29, 2023
Construction is one of the most complex and challenging of commercial endeavors, involving as it does a vast combination of material and human resources and a multiplicity of decisions and actions all taking place on strict schedules. As such, disputes are common, typically arising from such issues as delays, cost overruns, design errors and construction defects. To address these issues efficiently, many parties turn to arbitration, which is an alternative to litigation that offers privacy, expediency, flexibility and the expertise of professional neutrals. It also offers finality of resolution, which can be vital in keeping ongoing projects on track without additional delays and costs.
Construction disputes can encompass a wide range of issues, such as these:
- Construction defects — These involve issues with the quality of work, structural defects, poor craftsmanship and other deficiencies that can compromise the project's integrity.
- Delays — Construction projects have strict timelines, which might not be met due to unforeseen circumstances, mismanagement or other variables.
- Cost overruns — Parties often disagree on financial matters, such as added costs, change orders or payment schedules.
- Design errors — Allegations of mistakes can arise if the final product does not align with the initial plans and specifications.
- Breach of contract — Either party may allege that the other failed to fulfill their contractual obligations in whole or in part.
Construction arbitrations typically follow elaborate sets of rules that take into account the complexities of construction disputes, such as multiple parties, complex contracts and technical details. Examples are the AAA Construction Industry Arbitration Rules and the JAMS Expedited Construction Arbitration Rules. Although less formal than rules governing court proceedings, they provide uniformity and reliability for the conduct of construction arbitrations. The rules allow for the selection of arbitrators with construction expertise. They also establish efficient procedures for document production, witness depositions and other discovery methods. In addition, they allow the parties to work out agreements setting out the scope and length of discovery and the procedures for evidentiary hearings.
An arbitration is similar to a trial in that the arbitrator is vested with power to make binding decisions. In most construction cases, arbitrators issue orders for monetary damages, specific performance or other remedies to resolve the dispute. Arbitration can also lead to negotiated settlements, allowing the parties to find mutually agreeable solutions. In some cases, the arbitrator may dismiss claims that are determined to lack merit or not to fall within the scope of the arbitration agreement.
Where the dispute concerns an ongoing project, the arbitration can lead to the continuation of work with revised terms, schedules or designs. In all cases, arbitration can avoid many of the costs and delays associated with court litigation. Generally, there is no appeal from an arbitrator’s decision, which further saves time and money.
Quinn & Kronlund, LLP in Stockton, California is an experienced provider of alternative dispute resolution in construction disputes. Feel free to contact us online or call 209-943-3950 to learn more about the services we offer.