Litigation Vs. Arbitration, Part 1

March 21, 2006

Tips from the Foundation's Project Management Courses
By: John Zink

Litigation Vs. Arbitration
As you read through your contract (BEFORE you sign it), consider the issue of dispute resolution.

There has been a trend in recent years to see contracts that require conflicts to be resolved by arbitration rather than the court system. The perception of arbitration being a cheaper, faster and more “fair” way to resolve a dispute seems to have taken a foothold in the minds of the average person, but do these perceptions hold true?

Benefits of Arbitration and Disadvantages of the Court Process

  • In the court system, you are at the mercy of a judge who may know nothing about the construction industry.

  • An arbitrator is usually an expert in the field of the case being arbitrated and can relate to the parties in dispute. A judge sees con men, violent offenders, murderers and the worst of society every day and has no problem sending these people to jail for life. The chances of getting sympathy on a case that could cost you your business is lower than an arbitrator who may have seen someone in your shoes before.

  • In the court system, your trial will be held when the system says it will be. It makes no difference how busy you are, who is in the hospital or what else is going on in your life. Even when you are given a court date, you still do not know if your trial will be heard that day.

    Overburdened court systems may tell you to come back the next day, and the next, still without the guarantee that your trial will be heard in a timely manner. Arbitration puts the power of scheduling into the hands of the disputers.

  • If you retain a lawyer at local law firm with excellent construction law experience, you may find that the firm also represents the party you are in dispute with –leading to a conflict of interest. You may be stuck finding new representation who lacks the expertise that could have aided your case.
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