Dispute Resolution: Keeping Your General Contractor On Point

cbennett
September 25, 2012

Construction projects can take long periods of time and an excess amount of money to complete, but property owners are often willing to risk this in order to get their property to the level that they want. General contractors usually provide these services under contract with the property owner. Unfortunately, these projects do not always end up the way the property owner was hoping for. This is often due to a lack of clarity in the original contract. When this occurs, there are several ways in which the contractor and owner can handle the dispute.

Mediation

Mediation is a good starting point in trying to figure out a solution for a dispute between a contractor and property owner. Mediation in a non-legal procedure in which the two involved parties sit with a neutral mediator to discuss ways that the dispute can be handled outside of court. The mediator is often an attorney, but that attorney will not be giving actual legal advice to either party of the negotiation.

According to the experts at www.construxsolutions.com, mediation is not typically legally binding. The two parties usually enter into a contract stating that the process will continue until at least one party feels the mediation is no longer helpful. The state of Florida actually requires mediation before a civil case can come to trial, and their records show that the process is successful in resolving 75% of cases and keeping them out of court. This type of statistic just goes to show that litigation may not always be prudent.

Arbitration

Arbitration is another dispute resolution process that will keep a property owner and general contractor out of court. Arbitration is fully binding in the majority of cases; meaning that any decision reached by the arbitrator(s) is just as good as a court ruling. It is often smart to have an arbitration clause within the original contract between the property owner and the contractor which states that any dispute will be handled through arbitration. This usually ends up saving both parties a good amount of money in court fees.

The two parties involved in arbitration can either agree on one arbitrator or they can both choose different arbitrators. If they decide to pick different individuals, then the two that they choose will agree on a third arbitrator to hear the facts. The resolution process then proceeds much like it would in court. Facts are presented to the arbitrator(s) and they will come to a final decision on the matter that the property owner and contractor are both bound by.

Litigation

Litigation should usually be considered a last resort when a dispute arises involving a construction project. The costs of going to court can sometimes be more than the money either party hopes to recover. Unfortunately, litigation is necessary in some instances, and there are a few advantages that litigation holds over arbitration.

One benefit that litigation has is the fact that there is an appeals process. Arbitration usually does not have this option. Going to court also allows an attorney to perform discovery. This can often lead to evidence that would’ve otherwise never been found making its way to court; of course this is usually only beneficial to one party. It isn’t easy to compare mediation and litigation due to the fact that mediation is usually in no way binding.

Nobody really ends up winning when a construction project ends up going downhill. Both parties can potentially lose money, and the party that comes out on top usually only recoups enough to break even. There are luckily several ways in which these disputes can be handled, and they each have their own distinct benefits. It is important to contact a lawyer when any type of construction dispute occurs, regardless of the resolution method that the parties choose. Lawyers can give advice on mediation or arbitration processes and can even recommend an experienced professional to handle either of the procedures.

Chris Bennett is a telecommunications construction expert and a contributing author for www.construxsolutions.com. Labor disputes can be costly, if not fatal, to large construction projects. Awareness of all available options and rights can be paramount to the success of a project. Construx Solutions is a consulting firm experienced in resolving issues which arise in a manner that is more cost effective to their clients.