Avoiding Lengthy and Costly Litigation by Negotiating Alternative Dispute Resolution Methods

by Kris R. Nielsen, Nielsen-Wurster Group Inc, New York, NY, USA,
Patricia D. Galloway, Nielsen-Wurster Group Inc, New York, NY, USA,



Document Type: Proceeding Paper

Part of: Negotiation and Contract Management

Abstract:

A 'hot issue' in the construction industry today is the negative aspects perceived from wide arbitration use over the last 15 years. Although hearings usually begin sooner than litigation, they are often extended over periods longer than a court trial. Many of the decisions and awards are being 'split down the middle' instead of reflecting entitlement. The costs of proceeding in an arbitration are becoming enormous. Extensive upper management time is being diverted from running the business to handling arbitration matters. An alternative dispute resolution process can be negotiated to meet the disadvantages of the current Arbitration/Litigation options. Such an alternative involves negotiating a contract dispute resolution clause similar to arbitration and the recently in vogue 'mini-trials'. The alternative must be less costly and less time consuming. If an alternative dispute resolution process is to be employed there are a significant number of points to be included in the resultant contract language. The success of the alternative is founded on the definition of the resolution scope, method and procedures. Each of these is discussed in the paper.

Subject Headings: Arbitration | Dispute resolution | Construction methods | Contracts and subcontracts | Construction industry | Negotiation | Litigation

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