4 Arbitration Trends Impacting Construction Companies

These factors are reshaping construction arbitration. Here's what contractors need to know.

JD Supra law firm

June 28, 2024

2 Min Read
Alamy

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.

Related:5 Benefits of Arbitration For Construction Disputes

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.

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