In the realm of business,
construction disputes are a common event. Considering the nature, size and complexity of any
given project, it is understandable how disputes can arise.
The modern construction project involves many integral parts, which requires
the orchestration of engineers, construction site managers, materials,
suppliers, tools, equipment, and subcontractors.
For the business owner, if a construction dispute is not resolved promptly,
it is a lot like a Hollywood film production where the star has failed
to show up on set.
It quickly become expensive because employees and materials cost the business
money. A construction dispute siphons profits.
In addition to the obvious costs for workers and supplies, you have litigation
costs, such as expert witnesses and court fees, which can be significant.
Then there are the unsuspicious costs, such as lost productivity, lost
business opportunities, damage to business relationships, loss of referrals, etc.
Construction litigation in the United States reached an annual cost of
roughly $5 billion in 2003, according to the American Bar Association.
Since that time, the construction industry has made strides towards resolving
disputes more cost-effectively and efficiently. However, despite this
progress, many experts agree that there is still room for improvement.
Alternative Dispute Resolution (ADR)
The construction industry uses several different methods of Alternative
Dispute Resolution (ADR), with the most common being:
Step negotiation, which is a process whereby the parties try to directly negotiate a resolution
to the dispute.
A Dispute Review Board, consisting of three neutral experts monitor the site for any possible
issues. If the parties request it, the board will conduct an informal
hearing, and shall issue an opinion that the parties may use to negotiate further.
Mediation is a process where an impartial third party, the mediator, assists the
parties in reaching a settlement or resolution.
Arbitration is where the parties present their case before the arbitrator, who decides
on a specific remedy or award.
We hope this gives you a basic picture of how construction disputes are
resolved. If you are presently dealing with such an issue, we encourage
you to contact Rifkind Patrick LLC to meet with one of our Chicago construction lawyers.
With over 40 years of collective experience, we are prepared to help you
resolve your dispute as swiftly and cost-effectively as possible.
Call today to schedule your consultation!