What is Alternative Dispute Resolution in Construction

Construction projects run into problems all the time so it is important that you review all aspects of your agreement to avoid any surprises in the future. Alternative dispute resolution contract clauses are a great way of dealing with problems that arise during a construction project. If your contract is drafted well, it will protect you if there any sudden unanticipated issues that arise and will provide guidelines on how any such disputes should be resolved. Handling disputes without having a dispute resolution clause in your contract can be quite challenging.

How dispute resolution clauses work?

When drafting a construction contract your representative should include an alternative dispute resolution clause in the agreement. The clause will determine how disputes that arise at the work site should be handled. These clauses attempt to resolve the matter either with an alternative solution, mediation or an in-house process instead of taking the matter to court directly. Both parties need to be in agreement when a dispute resolution clause is added to a construction contract. Usually with the addition of this clause both parties are required to waive their litigation rights to resolve the construction dispute in court. 

Having a dispute resolution clause in agreements is a standard practise for construction documents. People who have been in the construction industry for awhile now are aware of what it means to accept an alternative dispute resolution clause. Most people find alternative dispute resolution clauses to be better at resolving these matters instead of traditional litigation. 

Benefits of dispute resolution clauses

Within ADR clause you can ensure that there is no uncertainty due to the dispute. By including an ADR clause in your construction documents, you can not only save time but also money that would have otherwise been spent on settling the matter in court. The following are some other benefits of including an alternative dispute resolution clause in your contract.

Private

If the dispute needs to be resolved in court the litigation and court proceedings will be public and anyone will be able to bear witness to it. If the matter is resolved through mediation and arbitration your personal business would not be out there for all the world to see. There are times when the parties involved prefer to keep the matter private and resolve it on their own instead of making it public.

Fast

If instead of taking the matter to court if you use ADR methods to resolve a dispute it will be a much faster process. When a dispute is being resolved through mediation and arbitration, the third party can step in to avoid or smooth out any procedural hiccups. The presence of a neutral third party in the mediation or arbitration process also ensures that both parties are getting personalized attention. The process also speeds up because of this extra attention.

Disputes are quite common at construction worksite; they can be the result of heated discussions about simple matters. If tools are missing or a 966G front end wheel loader broke down due to someone’s oversight, the ensuing arguments might turn into disputes. But having ADR clauses in the documents will ensure that they are resolved quickly.