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November 9, 2018

Rethinking the Boilerplate: Alternative Dispute Resolution Procedures in Construction Contracts

By Robert Alfert, Jr., Edward R. Philpot

Construction Executive

In an article published on Nov. 2 in Construction Executive, Robert Alfert and Edward Philpot discuss taking full advantage of alternative dispute resolution (ADR). They highlight the importance of understanding each available process and the options for customization before executing a contract.

Unlike litigation, ADR allows parties to define nearly all aspects of their dispute resolution process. “Overall, only ADR allows parties the full right of self-determination over the resolution of disputes, while litigation often exposes business parties to greater risk, costs, delays, and uncertainties,” the attorneys state.

Each of the processes within ADR – mediation, arbitration, dispute review board, or a combination – may be used individually, or in combination with the others. Mediation allows for control over the final settlement and even if no settlement is reached, early mediation adds value. “Although mediation is driven by each party’s willingness to participate, the process is customizable.,” Alfert and Philpot highlight.

“Arbitration offers the most finality and control of ADR,” they explain. In the arbitration process, the decision is in the third party’s hands, and a well-crafted arbitration provision and parties who treat arbitration like arbitration, rather than litigation, will ensure a faster and more cost-sensitive result.

Dispute review boards (DRB) provide the ability to resolve disputes as they arise, versus when parties are already headed to litigation, and offer a middle ground between mediation and arbitration.