The Importance of Dispute Resolution in Construction

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construction dispute resolution

You want the best outcome for every construction job you work on. You plan out your work, review the job specifications closely and discuss expectations with the client. Finally, you go ahead and apply your experience and expertise to make sure everything on the job goes right. The reality is, even in projects where mistakes are avoided and the goals are reached, disputes will still arise. That is why handling construction dispute resolution should be a central part to planning every project in order to accomplish the best outcome.

Arbitration is The Most Common Form of Resolution

Your construction contract generally outlines how disputes will be addressed and resolved. Arbitration is the form of dispute resolution used in most construction contracts. Arbitration is a cheaper and faster alternative to filing a lawsuit in the courts. It has many of the same characteristics of litigation, such as a neutral third party will ultimately decide how the dispute will be resolved and the decision is binding. You still can require the other side give you information relevant to the dispute and draft arguments with proof that tell your side of the story. Still, arbitration is not cheap because you usually will need to get a lawyer to represent you in the arbitration to give you the best chance of success.

Some arbitration associations, such as the American Arbitration Association, have specific Construction Dispute arbitrators and rules drafted specifically for construction disputes. If arbitration is required in your contract, try to negotiate that one of these specialized arbitration associations will handle the dispute. You may also want to put in your contract that complex or high-dollar claims will be decided by multiple arbitrators to better insure a fair verdict.

Litigation is sometimes the preferred method

Litigation is sometimes the preferred method of dispute resolution in a client contract. This requires filing a claim with a court to resolve the dispute. You will have to hire an attorney who is knowledgeable in construction dispute to give you the best chance of winning the dispute. If litigation is the required dispute resolution method, there are terms of the litigation you should look for.

First, check your contract for which state’s laws will govern the dispute and in which courts in the state you are required to file a claim. You should always try to negotiate the state and court which is most convenient for you to avoid the cost of travel to defend your claim. Also, some state laws are more beneficial than others depending on the type of dispute, such as property loss, injury, or death claims. If you are unsure whether the state required in the contract is beneficial to your typical disputes, you should consult a construction lawyer for guidance.

Most disputes can be resolved if the parties communicate face-to-face

Regardless of the dispute resolution method, your contract should include language requiring senior officials from both sides meet in person to discuss the dispute before being allowed to file a lawsuit or arbitration claim. Most disputes can be resolved if the parties communicate face-to-face about the problem. If that fails, your contract should also require mediation before filing a formal claim. Mediation an informal, non-binding process which requires you and your client meet with a neutral third party trained specifically in resolving construction disputes. Both sides will have an opportunity to explain their side of the dispute so the mediator can discuss the issues and offer ways to settle the dispute. You will have to pay a fee for the mediation but the value of having an experienced neutral person help discuss the problems can save a lot time and money by avoiding arbitration or litigation.

Construction disputes vary in type and size so you should always consider whether to consult a construction lawyer to increase your chances of winning the dispute. For the best outcome, it may be beneficial to consult a with construction lawyer before a job instead of waiting until a dispute arises.