Arbitration In Construction Matters And Beyond

A 2019 ARCADIS Global Construction report determined that 30% of construction projects end in dispute. Any construction claims professional or construction attorney would argue that number is low.

With the prevalence of construction claims on projects of all sizes, the parties frequently find themselves in the middle of uncharted territory—arbitration.

Arbitration has been intertwined with construction disputes for more than a century. The first American Institute of Architects (AIA) form contract, released in 1888, required arbitration as the dispute resolution procedure.

Arbitration remains a feature of most construction contracts, including the AIA 2017 version and non-form agreements used by contractors and subcontractors.

For a time, construction arbitration had fallen out of favor, and it was thought to be of limited usefulness. However, with the ever-growing backlog caused by court shutdowns, reticent jurors, and a constant stream of new matters despite the pandemic, parties and courts are turning to both binding and non-binding arbitration to help resolve the always-complicated disagreements that arise over construction projects.