Arbitration v. Litigation-Which is More Effective?

 

Last week I arbitrated a case over Zoom.  The hearing lasted one hour.  The Claimant, a construction company, was owed high five figures.  They did not have an attorney’s fee clause in their contract.

The Respondent never answered the arbitration demand and did not appear.

The Claimant presented his damages and told me the history of the project.  I awarded him the full value of his claim plus interest and costs because they were provided for in his contract.

What if this had gone to litigation? 

He would have filed a lawsuit and paid for service on the defendant. 

He would have had to wait twenty days for him to file an answer.

He would have to file a request for default.

He would have to file a motion for default judgment.

Even if the claim were for a “sum certain,” the court would probably require a hearing on damages.

He will have to appear at the hearing and testify as to his damages.  If the court is busy that day, he may have to wait around for hours.

He will have to wait for a judgment.

He will have to ask for an execution.

To be fair, the Claimant will have to ask the court to confirm the arbitration award in order to obtain a judgment, but that is usually decided on the papers.

If you were owed money, what would you choose?

Parties should include arbitration clauses in their construction contracts because it allows them to have more control over the dispute resolution process.  When disputes arise, they should carefully consider the qualifications of potential arbitrators making their choice.  Choosing an arbitrator with specialized knowledge in the construction industry can help ensure that the dispute resolution process is efficient, effective, and fair.

Contact me to arbitrate or mediate your residential construction dispute.  Andrea Goldman agoldman@goldmanlg.com or 617-953-3760.