Construction arbitration has evolved significantly over the years. As the industry continues to evolve, so too do the trends and practices within construction arbitration. This article looks at some of the emerging trends that are changing the landscape of construction arbitration and their implications for parties involved in construction disputes.
Increased Use of Technology
One notable trend in construction arbitration is the increased use of technology to streamline proceedings and enhance efficiency. From virtual hearings and electronic document management to online arbitration platforms, technology is revolutionizing the way construction disputes are resolved. Long gone are the days of hauling bankers boxes full of daily reports, printing color copies of aerial site photos, or bringing 30 binders of paper exhibits to a final hearing. Arbitrators are becoming accustomed to electronic exhibits and being able to access and search exhibits. This makes the deliberation and award-writing phases more streamlined, particularly if the exhibits are well-labeled, and lengthy exhibits, such as contracts or specifications, are searchable. Technology has made preliminary and final hearings easier to schedule. Virtual hearings, in particular, have become more prevalent, allowing parties and arbitrators to participate remotely, thereby reducing costs, and eliminating geographical barriers. The use of technology not only accelerates the arbitration process but also improves accessibility and transparency while lowering costs.
Emphasis on Efficiency and Cost-Effectiveness:
In today’s competitive construction industry, parties are increasingly focused on resolving disputes in a timely and cost-effective manner. As a result, there is a growing emphasis on efficiency in construction arbitration proceedings. Arbitrators and parties are employing various strategies to streamline the arbitration process, such as shortening deadlines, limiting discovery, using witness statements, adopting expedited procedures for smaller claims, and using case management techniques to control costs. We are also seeing arbitration clauses with interim dispute management tools that allow the parties to have claims heard while the project continues to move forward, or provide for expedited processing of particular claims, such as payment claims, without prejudicing the parties’ rights to bringing additional claims later. Furthermore, the use of technology, as mentioned earlier, plays a significant role in enhancing efficiency and reducing the overall cost of arbitration.
Rise of Delay and Cost Overrun Claims
Another notable trend in construction arbitrations today is the increasing prevalence of delay and cost overrun claims. Delays can occur due to various reasons, including design changes, weather conditions, labor disputes, or unforeseen site conditions. Arbitrating delay claims requires a thorough analysis of the project schedule, causation, and the impact of delays on project completion. Cost overrun claims require the examination of job cost records, including increased labor costs, material and equipment costs, overhead, and loss of efficiency or productivity. Expert analysis is typically required to pursue and defend against delay and cost overrun claims, thus resolving delay disputes can be time-consuming and expensive, adding to the overall cost of the project.
Focus on Expert Evidence and Technical Complexity:
Construction disputes frequently involve technical issues that require expert evidence to resolve. Whether it’s assessing defective workmanship, determining the standard of care, or quantifying damages, arbitrators often rely on expert witnesses to provide specialized knowledge and opinions. However, coordinating expert evidence can be challenging, especially when experts have conflicting opinions or when technical issues are highly complex and contentious. Construction arbitrations are becoming increasingly expert-dependent, particularly given the applicable codes and vast nature of claims, which on any given construction project can range from water intrusion or structural failures to geotechnical issues or sequencing and critical path impacts. By understanding and addressing the technical issues proactively, parties can navigate construction arbitration proceedings more effectively and achieve timely and cost-efficient resolutions to their disputes.
Construction arbitration is evolving in response to technological advancements, the growing need for efficiencies in resolving disputes, and the complex technical nature of construction projects. The increased use of technology, emphasis on efficiency and cost-effectiveness, rise of delay and cost overrun claims, and the focus on expert evidence and technical complexity, are reshaping the landscape of construction arbitration. By staying abreast of these trends, parties can navigate construction arbitration proceedings more effectively and achieve successful outcomes in resolving their disputes.
