Michael L. Feinstein, P.A.

Understanding the basics of the arbitration process

Many construction contracts contain arbitration clauses. This allows the contractor and the property owner a way to resolve their disputes without the expense of litigation. It also keeps the parties' dispute private, which could help preserve their reputations in the community and possibly preserve the working relationship.

These may be compelling reasons to participate in arbitration, but you may still have questions. If you now need to use that arbitration clause, you may want to know some basics about how the process works before you begin.

What to expect

Below is a look at the basic arbitration process, according to the American Arbitration Association:

  • You or the other party initiates arbitration by issuing a demand for it.
  • You and the other party then select an arbitrator, depending on the issues and other criteria upon which you and the other party agree. For instance, you would more than likely benefit from someone with background in construction law.
  • You will attend a preliminary hearing to lay out the issues and set the procedural rules, including sharing information, depositions, witnesses and more.
  • You will then exchange information and otherwise prepare for your hearing.
  • You will then present evidence and testimony to the arbitrator in a hearing.
  • When the hearing ends, the arbitrator may allow you to submit additional information for his or her review.
  • The arbitrator then issues a decision and an award, if applicable, and then closes the case.

These are just the broad strokes of how the process works. In reality, you will probably spend a significant amount of time preparing the documentation you must turn over to the other party, conducting or sitting for depositions, and preparing for the hearing. Even though someone may tell you that you don't need an attorney to get through the arbitration process, you may want to ignore that piece of advice. Even though you aren't going before a civil judge, you may want to take this process seriously.

Most arbitration is binding, which means you lose your right to appeal the decision. For this reason alone, you need to put your best foot forward and make sure you include all relevant information. Moreover, you still have rights to protect as well. If you are facing arbitration as outlined in your construction contract, you may want to enlist the advice and assistance of an experienced attorney.

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