Arbitration is the only alternative to using litigation as a method to resolve disputes. It was developed as a way to quicker and cheaper way to resolve disputes. Arbitration was used to enable parties to put their case in front of a construction professional as arbiter to the dispute. Unlike litigation, arbitration is only available if the parties have agreed that arbitration should be used in favour of litigation in what is known as an arbitration agreement.
Arbitration is binding on the parties.
The use of arbitration in construction disputes has been watered down by the advent of the Technology & Construction Court in which the Courts appoint a construction experienced JUDGE to decide the dispute.
Choice of dispute resolution process
Making a choice
The reasons parties choose arbitration on preference to litigation are because:
- it’s normally confidential; and
- it’s flexible;
Most standard construction contracts facilitate arbitration by way of an arbitration clause. We usually ask if a client would wish to litigate or arbitrate in the case of a potential dispute. Most standard forms facilitate, bespoke procedures,
Dealing with smaller claims
Some of the bespoke arrangements are avilable for smaller claims which may permit a decision to be based on a ‘documents only’ basis, OR dispense with witness statements, OR disclosure and/or a hearing. There is also a 100 day procedure set down by the Society of Construction Arbitrators which provides a framework for shorter Arbitrations.
The RICS has also facilitated a new service which offers a fast track service for disputes of £100,000 or less; and a specific service for disputes where the value exceeds £100,000.