Of late, there have been quite a few doubts that have been raised regarding construction arbitration even though it is considered relatively faster as well as cheaper than litigating. The problem is that panels set up to arbitrate tend to be heavily biased towards the construction industry and so normal citizens will not have their constitutional rights protected as they would not get a chance to go through a jury trial.
Avoidance Is The Best Option
Obviously, the best course of action would be to avoid construction arbitration by not getting involved in a dispute in the first place, even despite your construction contract having a clause dealing with arbitration to settle disputes when they arise. In essence, the arbitration is a kind of mini trial in which both parties present their case along with evidence and witnesses in front of an arbitrator selected by either party.
Though construction arbitration is meant to be both speedy as well as cost-effective, there are a number of factors that need consideration before deciding on this course of action ahead of litigation. Some of these factors include arbitration clause, conditions precedent, contract based claim time requirements, mechanics lien, placement of arbitration clause in all contracts, and process, cost, arbitrator and time involved.
The decision to arbitrate or litigate will generally depend on how big is your project and in case of big and complex projects, then arbitration will take a back seat to litigation because the latter will be more cost-effective and also advantageous since it will allow for conducting detailed pre-trial discovery as well as dispositions.
The bottom line is that arbitration that was meant to allow construction experts to settle disputes in a cost effective manner, has not lived up to such expectations and is now virtually the same as litigation.