A Look at Arbitration Misconceptions

By Cotney Construction Law.

Arbitrations are less costly than a litigation because arbitrators are not held to the same constraints of a court litigation.

A construction arbitration is an alternative dispute resolution (ADR) process in which a non-affiliated third party, better known as an arbitrator, reviews a case between two or more disputing parties to impose a decision. The arbitrator’s decision is legally binding.

Arbitration has become the most favored means of resolving disputes in the state of Florida, and our construction lawyers agree that it is an advantageous form of dispute resolution for construction professionals. However, there are some misconceptions that must be addressed to clear up any confusion.

Arbitrations Are Always Cheaper

Intrinsically, arbitrations are less costly than a litigation because arbitrators are not held to the same constraints of a court litigation. Expenses often incurred during the pretrial discovery and the trial itself can be avoided. Notwithstanding, if an arbitration is not managed well, it can become more costly. For example, incorporating the discovery process, which is being done increasingly, will absolutely increase expenses. The key is to manage the process well and to expedite the proceedings so as to keep expenses reasonable. Flexibility is one of the benefits of arbitrations, parties have the power to ensure the process remains streamlined.

No Appeals Allowed

What if a contractor is not satisfied with the arbitrator’s decision? It is true, that an arbitrator’s decision is final and binding; however, there is a potential opportunity for an appeal. It’s important to note that most arbitrations are not eligible for an appeal, in fact, appeals rarely happen. However, JAMS offers an optional appellate arbitration procedure when an appeal is necessary. Keep in mind that appeals are likely a result of fraud or misconduct. If you feel you have legitimate grounds for an appeal, consulting with a Jacksonville contractor lawyer is a wise decision before proceeding further.

Arbitrations Are Always Faster

We hear it all the time; an arbitration is a faster process than litigation. Typically they are faster because they are less formal and the process can be expedited to ensure it does not linger longer than necessary. However, arbitrations can get lengthy. Like the cost aspect, if the process is poorly managed it can become time-consuming. It is also not unheard of for an arbitration to take as long as a litigation due to the challenges of scheduling and the complexity of some cases—and we know that construction disputes can get pretty complex. The more complex a case, the more likely you will increase the need for additional sessions.

There may be many myths circulating the construction industry about the arbitration process, but the construction attorneysof Cotney Construction Law know all too well how successful an arbitration can be for disputing parties. Ultimately, we encourage you to see beyond the misconceptions of arbitration and to view it as an appropriate and flexible ADR for your construction disputes.

Arbitration Provision Terms Are Set

Arbitration is known to be very successful, for this reason, many contractors hire a construction attorney to ensure their contracts contain an arbitration provision. Arbitrations are thought to be set in stone, but it is not uncommon for parties to alter their contract provision after the fact. At times it becomes necessary for parties to alter the terms of a provision after a dispute has occurred depending on the merits of the case at hand. Again, the flexibility of arbitrations is why this ADR is so attractive.

Arbitrators Are Incompetent

Just because the arbitration process is more informal than a litigation, does not make it less legally binding. Likewise, arbitrators selected for the case must abide by Florida laws when arbitrating cases. Reputable arbitrators should possess construction industry expertise and provide a level of expertise equal to or greater than that of a judge. Due to the need to scrutinize damages, liability, decision-making, and awarding, an arbitrator must be unbiased and highly credible to execute sound judgment on the behalf of both parties. Furthermore, the American Arbitration Association (AAA), a leading provider of ADR services, provides a comprehensive guide for the qualification of arbitrators for membership selection.

To request a consultation with one of our construction attorneys, please call us today at 904.425.5030 or submit our contact request form.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

Original article source: Cotney Construction Law