At Minnesota Construction Law Services, we know that there is no one-size-fits-all approach to law –– and certainly not when it comes to construction arbitration. Other firms will pitch cookie-cutter solutions, but having worked as both construction industry professionals and then as lawyers solely representing contractors, we know the cookie-cutter method is the wrong approach. Combine the tools in our toolbox with our experience, and the team at MNCLS has what it takes to build a levy for our contractor clients — and get the arbitration project done right.
Inherently, arbitration can be advantageous for one party but disadvantageous for another. For example, many contracts have arbitration clauses that stack the legal odds in favor of the company offering the contract — putting the downstream party at a significant disadvantage. Typically, the “downstream party” is you: the contractor or subcontractor. With that in mind, while arbitration may not be our first choice for dispute resolution for our contractor clients, there are certainly instances where arbitration can be a useful tool.
Arbitration can be a viable option in a few select instances, such as:
When You’re on a Tight Schedule
In recent years, arbitration has become an increasingly complex process. Still, arbitration and mediation offer greater economy of time than litigation while also providing improved flexibility due to reduced legal requirements and fewer moving parts. With Minnesota courts shut down for north of a year due to COVID-19 resulting in a large backlog of cases, litigation can take upwards of two years from start to finish — making arbitration a more appealing option now than ever before. Arbitration can also be a more cost-effective measure than litigation, assuming the parties have received the proper coaching and preparation like the kind Minnesota Construction Law Services offers to our clients.
When Privacy is Key
One significant advantage of arbitration over litigation is that arbitration takes place in a private forum, and information found in the discovery or evidence process cannot be brought into the public eye. Construction professionals that want to keep deeply private information — like financials, employee information, and business practices — out of the eyes of the public can take full advantage of the privacy that the arbitration process provides.
When You Want a Level Playing Field
Arbitration is an alternative to litigation — taking place in a private court with an agreed-upon arbitrator in some cases. While litigation has a reputation for being a costly and lengthy process, arbitration comes with high initial costs and can easily become just as expensive as litigation. Minnesota Construction Law Services always recommends the best path for our clients, and we know the ins and outs of both your case and your business. Together, we can find a holistic solution which provides the greatest benefit to you and your business.
When Both Parties are Committed to a Resolution
Let’s not bury the lede — an arbitration does conclude with a legally-binding judgment. As opposed to mediation, one party cannot withdraw from the arbitration process if the other remains. For this reason, arbitration can be an effective tool in the event that both parties can cooperate to resolve a dispute. While arbitration can be a far less drawn-out process than litigation, it can still be every bit as contentious.
When You Want to Avoid an Appeal
The judgment of an arbitrator is legally-binding — and in almost every instance, the decision cannot be appealed. While the lack of an appeals process can speed up a resolution, it also means that arbitration should only be considered if a builder is willing to accept a potentially unfavorable outcome. With all of that said, the arbitration process is appealing to many construction companies who want the legal process to move quickly.
How to Know When the Situation is Right for Arbitration
There are countless other variables which influence whether arbitration is the right process for a business. While we have offered a few situations when arbitration might be the right choice to settle a dispute, it is vital to know exactly which dispute resolution process is the right fit prior to pursuing a resolution. In situations where arbitration is the best course of action, Minnesota Construction Law Services thoroughly researches and prepares our clients to ensure the best outcome — with as little disruption to business — possible. We should note: there are very few cases where a binding arbitration clause in your contract is a good idea; it leaves the team at MNCLS few options to guide you on next steps.
If you still have questions about whether arbitration is the right process for settling your construction dispute, know you’re not alone. The professionals at Minnesota Construction Law Services are your business partners first and lawyers second — and can help you navigate the arbitration process in a way that few others can.