Dolan Media Newswires
I have always been an advocate of mediation and arbitration versus litigation, especially in the construction practice of law.
Years ago I was invited to debate construction attorney Max E. Greenberg at a McGraw Hill Forum in New York City. My stand was “Arbitration May Help You Collect Faster.” Greenberg’s counterpoint was “The Disadvantages of Arbitration.”
My arguments as to the advantages of arbitration were accelerated hearings, reduced costs, convenience, formality, expertise and privacy. Greenberg countered with undisclosed favoritism of arbitrators, protracted hearings, the disregard for protective provisions of contractual rights, etc. Our views were published in the “McGraw Hill Construction Business Handbook” in 1978.
Although I have the highest respect for members of the judiciary and the jury system, I’ve always believed that construction matters should be mediated and/or arbitrated.
There is no question that the mediation/arbitration process leads to a reduction of trials in the court system and is beneficial to the parties in that there is very little discovery, hearings can be accelerated, the cost factor is reduced, there is informality, and decisions are timely.
My position is that a mediator should be forthcoming and inform the parties individually of the strengths and weaknesses of their case, since all matters in the mediation are confidential and cannot be disclosed thereafter without the consent of the parties.
A mediator also should be forthcoming with his prediction of the outcome if the matter were to go to trial or arbitration, which is not an easy task and may be the reverse conclusion later on in any proceeding. Because mediation is nonbinding, both parties have nothing to lose except for time and money.
Arbitration has the same advantages of mediation. The basic difference is that arbitration is binding. While there is no question that arbitration and/or mediation is preferable to litigation, the parties should be cautioned that arbitration is a binding resolution of a dispute.
Though arbitrations can be extremely useful to the resolution of disputes, caution should be taken when submitting a matter to an arbitrator. There is a different standard than submitting the matter to a court of competent jurisdiction. It is a very difficult road to vacate an arbitration award, knowing that an arbitrator could disregard the terms of a contract, statute or case law.
Therefore, it is important to consider whether or not arbitration should be used, and perhaps to limit the role of the arbitrator in ruling on various issues. More importantly, the selection of an arbitrator is crucial.
There are many seasoned arbitrators who are extremely fair, and of course there are retired members of the judiciary who should be used as arbitrators since they have the depth and experience of deciding cases on legal principles.
I advise my fellow practioners to seriously consider, however, the advantages and disadvantages of the arbitration system and urging them to pursue mediation where practical, notwithstanding no contractual duty to mediate.
In the construction industry, many owners and general contractors are refraining from the arbitration process because of the risks involved with arbitrators, and many of the general contractors are inserting arbitration clauses with a phrase that arbitration shall be with the general contractor’s sole discretion.
Girard Visconti is the president and founder of Visconti Boren & Campbell Ltd., a firm in Providence, R.I.