In a recently available client convention I was asked, 'What exactly is arbitration, anyway'? In the context of a construction claim or in seeking to avoid a construction claim, there are many substantial benefits that arbitration can provide instead of litigation. In today's challenging business environment being conscious of the different options available will make an important impact on your business. Briefly reported, arbitration is a private, informal process by which all parties agree, in writing, to submit their dispute to at least one or more impartial persons authorized to solve the controversy by making a final and binding award. [i] Why is this process distinctive is the power, with some advance consideration, to modify and tailor the dispute resolution process to suit your company's needs.CUSTOMIZATION - Customization permits you to tailor the dispute resolution process by stating the area of arbitration, the amount of arbitrators and even the specific technical requirements of the arbitrator( s) to best suit the dynamics of your state. This can be specially essential in the construction area where you are unlikely to be appointed a judge that has any specific technical knowledge or appreciation of construction. In arbitration, you can obtain an arbitrator with the degree of design admiration you feel appropriate. As stated by Michael Marra, Vice President Construction Division American Arbitration Association, 'There's no concern regarding the arbitration procedure that a good [contract arbitration] clause cannot resolve. People do not often recognize they can customize the process with their particular task needs.'COST SAVINGS - Being a process meant to be less conventional than litigation, the complete case preparation and data exchange can be efficient saving both lawyer and clients' time and resources. Further, it's often possible with an whole dispute brought prior to the arbitrator in a reading and perhaps without the necessity for court reporters and charges. This can be an achievement seldom present in litigation. There is, but, some discussion in the field whether arbitration is less expensive than litigation. Arbitration for bigger and more complex claims might not develop the cost-savings present in less complicated claims.TIME FRAME - When considering taking an action to the Supreme Court for litigation, it's essential to keep in mind the time frame when the issue can expect to become determined. According to a new litigation processing from my office, the time between when a subject is assigned an index number to solution is roughly couple of years and 6 months, or 914 days.[ii] This really is significantly greater than the predicted time frame in an equivalent arbitration claim. Depending on a recently available administrative study by the American Arbitration Association for circumstances beneath the American Arbitration Association Commercial Arbitration Rules, with claims between $500,000.00 and $75,000.00, the average state was solved within 297 days of processing. [iii]LESS FORMAL - It's reasonable to say that most people do not error Supreme Court for the Hilton. In fact, many customers have a whole lot of stress or anxiety concerning the considered having their dispute presented in open court. In the context of an arbitration, however, the reading could be executed in either your attorney's meeting room, or in just about any other appropriate site, making the procedure dramatically less stressful.RECOVERY OF FEES AND COSTS - Where precisely stated and agreed to in writing, the arbitrator might be free to award the repayment of all fees and expenses associated with bringing forth the state to either party, including all processing and attorneys fees. This is a good example of how some advance planning and consideration with your attorney can make the next state more to your organizations' gain. Although arbitration may not be available for each and every question or conflict [iv], where available, its numerous possible benefits ensure it is well worth consideration.i The Amer. Arb. Assoc. Guide to Drafting Alternate Dispute Resolution Clauses for Construction Contracts, rev'd Oct 1, 2009 at pg 4ii This is a preliminary estimated time designated by the judge. Specific justices and event particulars can vary this estimate.iii Study of Amer. Arb. Assoc. cases used under the Amer. Arb. Assoc. Commercial Arbitration Rules honored in 2003.iv Pursuant to N.Y.G.B.L Section 399-c, obligatory arbitration provisions in construction contracts for residential home improvement are void.
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