Construction Arbitration: An Efficient and Cost-Effective Way of Resolving Disputes in the Construction Industry

Construction arbitration is a form of alternative dispute resolution wherein parties in a construction dispute agree to have an impartial third party, an arbitrator, hear and decide on their case. It is a common practice in the construction industry to resolve disputes arising from construction projects, particularly with the large sums of money involved and complicated contracts.

In construction arbitration, each party presents their case to the arbitrator, who then reviews the evidence and delivers a decision that is binding on both parties. Unlike court proceedings, construction arbitration is private, and the rules of evidence and procedure are less formal, making it a more cost-effective and timely way of resolving disputes.

Over the years, the use of construction arbitration has become increasingly popular among construction industry players. The main reason for this is the speed in which disputes can be resolved, compared to the traditional court process. In addition to being efficient, arbitration allows parties to maintain a continued working relationship, which is crucial in the construction industry’s small and tight-knit community.

Despite its many advantages, construction arbitration still comes with its challenges. Choosing a competent arbitrator with experience in the construction industry is essential to ensuring a fair hearing and the correct application of the law. However, this often proves difficult, and the appointment of an arbitrator can cause further disagreements between parties.

Furthermore, some parties may see construction arbitration as biased towards the construction industry rather than being genuinely impartial. Critics argue that arbitrators may have a preference for repeat business, creating a possible conflict of interest. Although, this can be prevented by carefully vetting the arbitrator’s credentials and keeping their performance under review.

In conclusion, construction arbitration is an increasingly popular means of resolving construction disputes. It has many advantages over the traditional court process, such as being cost-effective and faster. However, its application can be challenging, particularly in the appointment of a competent and impartial arbitrator. All in all, construction arbitration remains a viable alternative to traditional court proceedings in the construction industry.