Construction Disputes
Construction projects involve a number of parties pursuing a common goal. Owners, architects/engineers, consultants, contractors, and subcontractors all have their own interests to protect or pursue, and must mitigate or allocate risk, all while working as a team linked together by a series of agreements. These relationships can quickly be tested when problems arise. A dispute may be minor in nature—easily resolved—or may involve several major issues, such as claims involving scope, extra work, defects, delays, and payment.
Contract provisions may address some of these issues and provide defenses, and in other instances statutes and common law principles may supplement a contract to avoid any gaps or otherwise invalidate or replace terms that may be against public policy.
Construction projects, with the number of participants with competing interests and obligations, are often the subject of dispute. Factor in issues that can arise well after project completion, and the emotional and financial connection parties may have to a project, and it is easy to see how disputes can devolve into time consuming and costly legal fights.
Mediation
Mediation is an alternative dispute resolution process in which a neutral third-party—the mediator—helps the parties reach a voluntary resolution of a dispute. It is a confidential, informal, and flexible process in which the mediator helps the parties understand the interests of everyone involved, and their practical and legal choices. Mediation is useful in that it allows people to resolve a dispute on their own terms and in a less adversarial setting where they control the outcome. The mediator does not decide who is "right" or who is "wrong." Rather, the mediator's role is to facilitate discussion with the ultimate goal being a resolution of the dispute at hand, thereby saving all parties time and money by avoiding further conflict, and potentially preserving relationships.
Mediation can be conducted at the outset of a dispute in order to avoid the time and cost of escalating the dispute to litigation or arbitration. Perhaps more frequently, it is conducted during the course of litigation or arbitration after some measure of information has been exchanged and positions are more fully developed. Many state laws favor mediation, and various courts require it by rule. It is often encouraged or required by bodies that administer arbitration.
Arbitration
Arbitration is essentially a private trial with an arbitrator, or panel/tribunal of arbitrators, issuing an award deciding the matter in dispute. The right to arbitrate is typically addressed in the applicable contract, although the parties may agree to arbitrate a dispute after it has arisen. While there may be some procedural rules in place, there is generally a less rigid structure and less formality than in litigation. Parties can develop their own procedures for use in the case or modify default rules. Arbitration is often a preferred forum for resolving construction disputes given the privacy and flexibility that the process offers and the qualifications and specialized knowledge that an arbitrator may possess.