ADR/Arbitration

Insights and articles written by our team

Part 1: Introduction to Arbitration: What It Is and Why It Matters

Understanding Arbitration Arbitration is a form of alternative dispute resolution (ADR) that has gained significant traction over the years, particularly in the construction industry. Unlike traditional litigation, which involves going to court, arbitration allows parties to resolve their disputes privately and often more efficiently. The process involves a neutral third party, known as an arbitrator, who listens to both sides and makes a binding decision. Key Differences Between Arbitration and Civil Litigation in the Courts One of the primary distinctions between litigation in arbitration and litigation in the courts is the setting. Arbitration is typically conducted in a private setting, which can be more conducive to open communication and quicker determinations. In contrast, litigation in the courts is a public process that takes place in courtrooms and often involves extremely detailed and lengthy procedures. Court litigation can take substantially longer to get to an end result, requiring each of the parties to jump through more hoops in the process, driving up the attorney’s fees incurred by all involved. Another notable difference is the flexibility of arbitration. Parties involved in arbitration can choose their arbitrator, set their schedules, and define the framework that will govern the proceedings. This level of control

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Part 2: The Role of an Arbitrator in the Construction Industry

Specific Functions and Responsibilities An arbitrator in the construction industry plays a crucial role in resolving disputes that arise from complex construction projects. Their primary function is to act as a neutral party who listens to both sides of a dispute, evaluates evidence, and makes a binding decision. This role requires a deep understanding of construction law, contract interpretation, construction terms, the different roles and responsibilities of the persons involved with construction projects, the applicable standards of care, and the complicated issues that can arise both during and after completion of construction projects. Arbitrators manage the arbitration process from start to finish, in conjunction with counsel for the parties. This involves conducting preliminary hearings, setting schedules, ensuring compliance with procedural rules, and ultimately delivering an impartial award. In construction disputes, arbitrators may need to consider technical details, such as construction means and methods, industry standards, and both foreseeable and unforeseeable events which can impact project timelines. Importance of Industry-Specific Knowledge The importance of having an arbitrator with industry-specific knowledge cannot be overstated. Construction projects involve technical issues that an arbitrator without decades of construction litigation experience might not fully understand or appreciate. An arbitrator with a background in construction litigation,

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Part 3: Types of Disputes Suitable for Arbitration

Overview of Disputes Ideal for Arbitration Arbitration is particularly well-suited for a variety of disputes, especially those arising in the construction industry. This section provides an overview of the types of disputes that are ideal for arbitration and why they are better suited for this form of dispute resolution. Contract Disputes One of the most common types of disputes in the construction industry involves contracts. These disputes can arise over the interpretation of the laws governing construction contracts, contract terms, performance obligations, and the scope of work. Arbitration is ideal for contract disputes because it allows parties to choose an arbitrator with specific expertise in construction contracts, providing a basis for a more informed and reasonable determination. Payment Issues Disputes over payment are another frequent occurrence in the construction industry. These issues can involve delayed payments, non-payment, or disputes over the amount due. Arbitration provides a faster and more efficient resolution to these issues compared to litigation in the courts, which can be both lengthy and costly. The private nature of arbitration also helps maintain business relationships by resolving disputes discreetly. Delays and Scheduling Construction projects are often subject to factors which extend the construction timeline, due to circumstances which

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Part 4: Criteria for Choosing an Arbitrator: Key Considerations for Construction Disputes in California

When faced with a legal dispute in the construction industry, choosing the right arbitrator is one of your most critical decisions. Arbitration has become a favored method for resolving disputes due to its efficiency and flexibility, particularly in construction matters where timelines and relationships are often at stake. However, not all arbitrators are created equal, and the outcome of your dispute can largely depend on selecting the right one. In this blog, we’ll explore the essential criteria for choosing an arbitrator. We will focus on key qualities to look for, the importance of experience and expertise, and practical tips for vetting potential arbitrators. Additionally, we will discuss what makes an arbitrator particularly well suited for construction disputes, especially in California’s highly regulated and complex construction industry. Key Qualities to Look for When Selecting an Arbitrator The role of an arbitrator is to provide impartial and informed decisions on the matters in dispute. Unlike judges, who may not always have specialized knowledge of certain industries, arbitrators are often chosen for their expertise in the relevant field. Here are some of the most important qualities to consider when choosing an arbitrator: Impartiality: The arbitrator should be neutral with no vested interest in

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How arbitration can help resolve a dispute

Arbitration is an alternative to litigation for those interested in potentially saving money and time when compared to the oftentimes costly and time-consuming litigation process. It is helpful for anyone considering arbitration as an alternative dispute resolution option to know what it entails. How arbitration can help resolve a dispute Arbitration differs from litigation in some key ways. Arbitration is commonly viewed as a more streamlined alternative to litigation. Compared to litigation, which is typically goes before a judge, arbitration goes before an arbitrator who decides the dispute. Unlike a judge who is randomly decided to hear a lawsuit, the parties to the arbitration may be able to select an arbitrator that is mutually agreeable from a pool of potential arbitrators who will hear the dispute and decide on the dispute. In addition to being more involved it what is considered a more streamlined process, arbitration also has the added benefit of being a more private process. Unlike a lawsuit heard before a judge in court which creates a public record, arbitration proceedings are not public and are considered more private. Because it can be a more efficient process, arbitration can potentially save more than time and can also potentially

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Mediation is a useful option to resolve disputes

When parties have a dispute and are unable to resolve it themselves, they may want to consider mediation. Mediation is a form of alternative dispute resolution and it occurs outside of court. It is generally less expensive, less formal and more time-efficient than going to court. The mediator is a neutral third party who helps the parties reach an agreement. The mediator does not impose a settlement on the parties. It is a confidential and non-binding process. Each party is required to sign an agreement stating that they will keep all discussions in the mediation confidential. Process The mediator will usually begin by explaining the mediation process, each stage, his or her role and the confidentiality requirements of each party. Then, each party will have an opportunity to provide an uninterrupted opening statement to explain his or her position and to hear the other side’s position. After the opening statements are complete, the mediator and the parties can ask questions and the mediator will usually have a private discussion with each side. These private discussions provide the parties with an opportunity to help the mediator understand their concerns and interests. The mediator can then help the parties decide the proposals

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ADR: Choosing arbitration and the right arbitrator

Now that the courts have reopened after months of closures, we are beginning to see that the backlogs for all types of cases have increased exponentially. This is because most courts had backlogs prior to the slow-downs, remote work and shut downs of the past year, and those work stoppages only increased those backlogs, even on “routine” cases. This is why many people are looking to alternative dispute resolution models, and this is why so many are looking at arbitration and the right arbitrator. What is arbitration? In essence, arbitration is a courtroom alternative where a dispute is resolved privately, but the litigants still try their case before a neutral arbitrator who acts as the judge. This is often much faster and more cost-effective than traditional court litigation. And, during these times of extremely long court delays, arbitration has become the gold standard, while keeping all the traditional hallmarks of civil litigation. How to choose the right arbitrator? Unfortunately, many arbitrators have lost sight of why people choose arbitration. They have allowed their “court rooms” to devolve into the same litigation nightmare that litigants are trying to avoid. This is why when litigants are looking for the right arbitrator, they

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Weighing the advantages of judicial reference

At a time when the California court system, already backlogged before the hiatus of in-court trials last year, is still facing challenges in balancing video-conferenced and in-person proceedings, less cumbersome and quicker alternatives may start to look more advantageous. Litigants who are willing to waive a jury but who do not wish to risk the outcome of an arbitration might want to consider judicial reference. Under the California Code, CCP § 638, the appointment of a neutral as a judicial reference referee allows parties to disputes of all kinds the advantages of flexible and speedy proceedings with full procedural rights. Sometimes called a special master or private judge, the judicial reference referee follows the established rules of evidence, discovery and right to appeal, and their decision carries the same force of law as a trial judge. Distinction from an arbitrator Just as with arbitration, judicial reference is often written into contracts either as a consensual referee or as a specific remedy in resolving disputes. Both methods also require both parties to agree to the neutral who will hear both sides and render a decision. But while arbitration is private, judicial reference is guided by all the rules and proceedings of

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Four methods for resolving construction disputes

Just like any other type of business in California, construction disputes can arise between property owners, contractors and subcontractors. Construction disputes can be costly and time consuming. However, there are several methods for resolving a construction dispute in a way that is acceptable to all involved. Negotiating a resolution before the dispute begins Sometimes it is possible to agree to a dispute resolution method before one arises. The parties to the construction contract may be able to negotiate an agreement prior to beginning work that if a dispute arises, the parties will try to reach a resolution between themselves before turning to other forms of relief. Mediating a dispute One form of alternative dispute resolution is mediation. The mediator is a neutral third party who facilitates discussions between the parties to the dispute as they work together to reach a satisfactory resolution. Mediation is not legally binding, but it can save time and money, as well as preserve a relationship that would otherwise deteriorate. Arbitrating a dispute Unlike a mediator, an arbitrator is a decision-maker. Arbitration is similar to a trial, but with different rules and requirements. In general, each side to the dispute will provide documents and facts to

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What is arbitration and why might it be preferable to a trial?

When you have a legal dispute in California, is your only choice to litigate the matter in a trial? The trial process can be lengthy and expensive. For this reason, some individuals with legal disputes choose to arbitrate their issue, rather than immediately resorting to litigation. What is arbitration? Arbitration is an alternative dispute resolution process. Through arbitration, the parties along with their attorneys will have a hearing in which they will submit evidence and argue their case before an arbitration. The arbitrator is a neutral third-party and arbitration is a private process. The arbitrator will issue a decision about the dispute. This is different from mediation, as a mediator is not a decision-maker. The arbitrator may simply announce that they made a decision while other times the arbitrator will expand on that decision and provide their reasoning for coming to their conclusion. Arbitration can be binding, meaning the decision is enforceable by a court, or it can be non-binding meaning it will be final only if both parties accept it. What are the benefits of arbitration? Arbitration is similar to a civil trial, but arbitration is generally completed quicker and is less formal. Oftentimes the parties do not need

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