There has been an ongoing discussion on another forum we?re involved with on how to settle disputes. In case you didn?t already know, disputes happen in construction. But if you own your own construction-related business, I?ll bet you knew that already. The question is, how can you take control of the dispute resolution process to keep the damage to minimum?
First and foremost, all work is done with a written agreement. You have to have a contract, and anything that you include in your contract needs to be checked by your attorney before you use it.
You need language in your agreement that covers disputes, and outline how complaints are handled.? Typically doing this will ensure that a small dispute does not become a much larger issue then it needs to be.
For several years, I have been doing dispute resolution and there is one lesson I have learned.? If you do not handle disputes effectively, and in a timely manner, it will blow up in your face.
In my opinion, forget about mediation. Mediation assumes that both sides are willing to talk and get the problem resolved. That?s seldom the case. I recommend a clause that specifies binding arbitration with a non-attorney arbitrator. Why a non-attorney? In my experience, attorneys focus on keeping the clock ticking. Guess who pays that bill?
On average, when I?ve served as an expert witness, arbitrations with attorney arbitrators take at least three days to do. When I do arbitrations myself (and I am a BBB certified arbitrator for construction disputes) I get them done in 3 hours.
Most attorneys will want you to use an attorney to arbitrate your case. Yes, as a rule, attorneys have arbitration experience, but they seldom know or understand construction. That?s a problem. Find an experienced non-attorney arbitrator who knows construction and you will get a fair shake every time.
Do your homework and get the language in your agreements that you need to keep your disputes short and quickly resolved. This is one case where an ounce of prevention is worth tons of cure.
Sign up for Michael Stone?s free monthly newsletter to get information and tips to strengthen your construction-related business. Michael is a popular industry speaker as well as an author of two books; ?Markup & Profit; A Contractor?s Guide? and ?Profitable Sales, A Contractor?s Guide?. You can visit his website, follow him on Twitter and like his page on Facebook for more great advice and tips.
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