The construction industry is generally regarded as one of the most contentious and conflict-ridden industries in the U.S. At one time, it was standard procedure for parties to litigate their disputes, which can be a long and costly means of resolving a difficult situation. Now there are effective methods of alternative dispute resolution that allow both sides to resolve their problem out of court.
Two of the most common and successful approaches are mediation and arbitration. In fact, many commercial contracts call for one of the two to be used if a dispute arises.
Mediation is a confidential process in which a trained neutral mediator encourages and facilitates communication between the parties, making it easier for them to understand one another’s point of view and reach a mutually acceptable resolution. An experienced mediator will use their insights and experience to help both sides explore and decide on solutions so that they, not a judge, control the outcome.
During mediation, both sides may (but are not required to) present evidence to support their position. There may also be informal and private separate or joint meetings with the parties to improve the mediator’s understanding of the facts.
The mediation process is popular because the two sides can freely and confidentially discuss solutions without worrying that what they say can later be used against them at a trial. The outcome of mediation is legally binding only if the discussions result in a settlement agreement.
Like mediation, arbitration is a form of alternative dispute resolution, but it ends in an award reminiscent of a court judgment. Unlike mediation, the arbitrator (a neutral third party) or panel of arbitrators determines if a claim is valid and acts as a decision-maker. They listen as both sides present their cases and conduct the proceedings in a manner that is both orderly and in compliance with applicable procedures, rules, and laws.
Arbitration has been referred to as ‘private court’ because each side is allowed to present evidence in support of their case and call witnesses. The parties may also question each other, the witnesses, and any evidence. However, the hearing tends to be more informal and relaxed than a trial setting and arbitrators have more discretion than judges in the application of procedures and rules. Like judges, though, they have the authority to decide what financial amount and/or performance remedy is called for, if any. In binding arbitration, any awards they make can be enforced in a court of law.
At Rosen Law, LLC, we understand that positive settlement negotiations are generally the best means of resolving a construction dispute. Our attorneys will strive to create an environment for mediation or arbitration to achieve a favorable outcome, but if litigation does become necessary, we will not hesitate to go to bat for our clients. For more information about our mediation and arbitration services or to schedule a case review, please call (516) 437-3400today.