Mediation vs. Arbitration in Construction Disputes

When a dispute comes up in a construction project it is important to get it resolved as quickly as possible. Disputes have the potential to cause very significant delays, which are extremely expensive within the construction industry. In addition, if the dispute can’t be resolved it could cause a project to be abandoned. When facing disputes like this, there are three main options. The dispute can be litigated, or solved via either arbitration or mediation. Litigation removes virtually all control of the situation from the parties directly involved, and should therefore only be used as a last resort. Both mediation and arbitration can be great solutions. Comparing mediation and arbitration is a good way to decide which is right for your situation.

Neutral Third Party

Both mediation and arbitration use neutral third parties to help to facilitate a resolution to the conflict. With mediation, there is typically one mediator who comes in to help. Their only goal is to help the two parties come up with a solution that they can live with. They do not work on behalf of either party, but simply to guide the process forward so that the conflict can be resolved to the satisfaction of all.

When using arbitration, on the other hand, there are typically several third-party arbitrators brought in. While there are many ways that this can be done, most cases will involve one arbitrator for each party, and then one who doesn’t represent either party. These arbitrators will work with the involved parties to work toward a successful resolution. When making decisions, each arbitrator will get a vote, with a simple majority vote being required to make a decision.

Binding Decisions

When using mediation the decisions are rarely considered legally binding. If the two parties can’t come to an agreement even with the help of a mediator, they still have the option to move forward to litigation to get the courts involved. With arbitration, however, the decisions of the arbitrators are typically legally binding. This is agreed upon by the involved parties before beginning the arbitration process. This is beneficial because it can help ensure that a resolution to the conflict is achieved much more quickly than could happen through litigation.

Two Excellent Options

Both mediation and arbitration are excellent options for resolving a construction dispute. The simple fact that you’re bringing someone in whose only interest is helping to facilitate a resolution can help all parties see the situation much more rationally. If you need help resolving any type of construction conflict, please contact the Law Office of Ray Garcia. We have years of experience acting as arbitrators and mediators through all types of conflicts, and we would be honored to help you through your current situation.