What Is It and How Does It Work?

If you’re involved in a construction project – whether as a contractor, subcontractor, supplier, or owner – there’s a good chance you’ll need to know about construction arbitration. Disputes are common in the construction industry, and arbitration is often seen as a faster and more cost-effective way to resolve them than going to court. In this article, we’ll explain what arbitration is and how it works in the construction context.

The first thing to understand about arbitration is that it’s a form of alternative dispute resolution (ADR). ADR is a way to resolve disputes without going to court. Arbitration is one type of ADR, and it typically involves appointing an arbitrator (or panel of arbitrators) to hear both sides of the dispute and make a binding decision.

One of the benefits of arbitration is that it can be faster than going to court. Court cases can take months or even years to resolve, but arbitration hearings are usually much shorter. This can save you time and money in legal fees.

Another benefit of arbitration is that it’s often less formal than going to court. This means there are fewer rules about what evidence can be presented and how witnesses can be questioned. This can make the process quicker and less expensive.

Arbitration is also usually confidential. This means that the details of the dispute and the arbitrator’s decision are not made public. This can be important for businesses who want to keep their disputes private.

Disadvantages of arbitration include the fact that it is binding, which means you cannot appeal the arbitrator’s decision (although you can appeal on certain grounds, such as if there was a problem with how the arbitration was conducted). You also have to pay for the arbitrator’s time, which can be expensive.