When it comes to settling a commercial or construction dispute, there are two avenues you can take: traditional litigation or some form of alternative dispute resolution (ADR). Typically, mediation or arbitration are the most common types of ADR available.
Construction arbitration is actually widely used throughout the industry, however it still has it’s stigmas. There are some common myths surrounding construction arbitration that you may hear cited as a reason against it.
While the most effective dispute resolution process does depend on the individual specifics of each case, myths and falsehoods should not prevent you from considering arbitration or mediation as a viable means of settling construction disputes.
4 Common Construction Arbitration Myths
“Arbitration takes as long as litigation”
Not the case. In reality, a typical civil case takes just over two years to reach a verdict. Conversely, most arbitration cases are settled in 8-12 months.
“Arbitration is actually more costly than litigation”
Another falsehood. While it is true you typically incur costs that you can’t recoup from the opposing party during an arbitration, these costs are generally far less than what you pay in litigation fees. As arbitration cases are typically resolved in a relatively quicker fashion, you are also subject to less fees over time.
“Construction arbitration is not suitable for large cases”
Actually, according to the American Arbitration Association, over 551 cases with initial claims over $500,00 were settled through alternative dispute resolution in 2015. The largest arbitration settlement was $96 million.
“You don’t actually need an arbiter to settle the dispute”
This might sound ridiculous, but we’ve seen horror stories of parties going into arbitration without a professional arbiter to facilitate and things go off the rails — quick. While you may think you can save money on third-party fees, a professional, like an arbitration attorney is absolutely vital to successful dispute resolution.
Additional Resources
If you have more questions about construction arbitration or other forms of alternative dispute resolution, contact our team.