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Exploring the options for construction dispute resolution

On Behalf of | Oct 14, 2021 | Construction Law

Even after implementing as many proactive strategies as possible to prevent or minimize a construction dispute, some are inevitably bound to form. Construction projects have so many complex regulations, room for disagreement and involve such high sums of money involved that disputes are fairly common in the industry. Swift and cost-efficient resolution is key to keeping your finances and deadline in line. With several options for dispute resolution available, though, you must choose your tactics wisely.

The basic methods of resolution

Every dispute is unique in its details and scope. Generally, though, there are three methods that you can employ to resolve a construction dispute, no matter what it involves. These include:

  1. Mediation

In mediation, the parties involved, be they contractors, sub-contractors, supplies, or others, sit down with a neutral mediator who facilitates the arrival at a mutually satisfactory resolution. Mediation is the preferred method for most disputes, as it allows both parties control over the outcome. It also tends to cost much less than a lawsuit.

  1. Arbitration

Arbitration is similar to mediation in that it is private and has a neutral arbitrator at its center. Unlike mediation, the arbitrator issues a final, binding decision to which both parties must adhere. Some real estate or development companies insist on having clauses in their contracts that mandate arbitration in case of a dispute.

  1. Litigation

The final option for resolving a construction dispute once and for all is to file a lawsuit and proceed to trial. Most disagreements end in the mediation or arbitration stage, as few parties look forward to the expense of litigation and receiving a verdict that they cannot control from the court. However, when the matter remains in dispute after extensive negotiations, litigation is sometimes necessary.

The method that you and your counsel pursue will depend on factors such as the value of the project, the duration and cost of dispute resolution and the resources you are willing to spend. A favorable outcome can influence your bottom line and your reputation, so approaching the matter assertively is absolutely crucial.