Even construction projects with the most thoroughly negotiated contracts can sometimes get bogged down in disputes between two or more parties involved in the project. Disputes are more common among parties who are not seasoned construction professionals; however, it can happen to anyone. If, despite your best efforts, your project has been halted due to a dispute, you should first refer to the contract. You and the other party in conflict might be required to go to mediation or arbitration (two common forms of Alternative Dispute Resolution) before starting litigation. Even if your contract does not require you to first go to ADR, it can be a good idea.
Differences Between Mediation and Arbitration
As mediation and arbitration are both forms of ADR (Alternative Dispute Resolution), they can be used as alternatives to traditional litigation. Both mediation and arbitration involve a neutral third party (mediator or arbitrator) who aims to get the disputing parties to come to an agreement. The arbitration process is more formal, though, and ends when the arbitrator issues a decision (which may or may not be legally binding). Although mediation may eliminate the need for litigation, arbitration is more appropriate as a substitute for litigation.
Benefits of Mediation
Mediation, relative to arbitration (and certainly litigation), gives the disputing parties more control. Instead of building to a decision, the mediator’s aim is to help both sides come to a mutually beneficial agreement when the parties aren’t interested in communicating with each other. This is better for parties who still want to work together. Additionally, mediation is typically kept confidential.
Benefits of Arbitration
You could think of arbitration as a middle ground between mediation and litigation. Parties involved in arbitration are not involved in litigation but still present evidence to a neutral third party, who eventually reaches a decision. In many ways, arbitration combines beneficial elements of litigation without the massive expenses and long timelines associated with court actions. Some construction contracts stipulate that the arbitrator’s decision is final, while other contracts give parties the option to go to court after going through arbitration. The results of arbitration may also be kept private.
Litigation is useful for plenty of parties embroiled in construction disputes that cannot be resolved in mediation. However, it is usually best regarded as a last resort. Though judges are experts in law, plenty of them are not well-versed in the nuances of construction-related matters. Plus, once you begin litigation, you get locked into a long discovery process that can push back the end date for your project at least a year.
Florida Construction Law Group offers construction professionals precise legal counsel for any disputes that arise during a project. Litigation may very well be your best option, but the only way to find out the optimal path forward is to let our experienced legal team review your circumstances. We look forward to serving you soon; get in touch with us through our contact page to set up a consultation.