It has been a troubled road establishing these mechanisms within the law because of two main reasons. First there is a lot of money involved, often with powerful players and highly paid legal teams. Secondly, by their very nature, these problems arise from hugely complicated projects. If not handled quickly the disputes can become protracted, leading to complete breakdown.
More than anything it takes a willingness on both parties to want to resolve any disputes as quickly as possible in order for it to be accomplished. However if all else fails at the end of the day there is litigation – but really only as a last resort.
Before we get stuck into the nitty gritty, for those of you who are in a hurry, here are several resources that you will find helpful:
- Stewart Patterson, Barrister, Mediator, Arbitrator Probably the best professional option
- Design Buildings Construction Disputes A look at the complex world of Construction Disputes
- Architect Design Build seeing more about the legal framework of contractor relationships
- A Handy Layman’s Guide To Construction Disputes It is what it says!
Common Construction Disputes
Construction disputes between customers, contractors and construction companies are a common occurrence. These discrepancies usually occur because of unsatisfactory work, delays in accomplishing the work, and payments that are disputed. These types of conflicts consume a good deal of money and time, and in many instances the costs of pursuing these altercations is excessive.
Construction contracts will usually have language that specifies how disputes are to be handled. The usual terminology states that some means like mediation or arbitration is to be the preferred method of settling conflicts, as opposed to going to court to solve the problem.
An exception to using an out of court method of resolving construction disputes would be a mechanic’s lien, which does require a court to take action to enforce the lien. A mechanic’s lien is a tool that a contractor will use to guarantee payment for their services and materials.
The mechanic’s lien holds the property until the lien is paid once the required work is performed. If the lien is not paid, then the contractor can go to court to have the lien enforced. If the lien is still not paid, then the court can place a judgment that will require that the property be sold to satisfy the lien, and pay the contractor for his work.
Most of the construction contracts will state that any disputes that might arise be settled by arbitration. Courts in general will also require that arbitration of the construction dispute be the first step of resolution. The arbitration process is similar to a trial, yet is less formal. The arbitrators are people who probably have knowledge of construction, or are attorneys who are familiar with the field. The arbitrators take on the role of a judge, and they will hear the case and then make a final decision depending upon the presented evidence.
Many construction contracts have a binding arbitration clause in the contract. If a person signs such a contract without removing the binding arbitration clause, then they are in agreement with using that method of settling any dispute. The courts will back that up since it was agreed to in a legal contract, unless there was some other legal situation that was violated in the process.
Another process of resolving construction disputes is mediation. Construction Contracts do not often require mediation in the language of the contract. Mediation is not at all similar to arbitration, in that it is really not like a trial. In a mediation setting, an effort is made to bring the parties to a mutually agreeable place in the dispute, where they can settle on equal terms. The mediator does not make a decision in regard to who is right or wrong, but an attempt is made simply to bring the parties to agreement.
Regardless of the method that is used to resolve disputes in construction situations, the entire process can be very complex and expensive. In order to protect the interest of the parties, they should have legal representation. To enter into any of the three venues, arbitration, mediation, or a court proceeding without a barrister would not be wise.