Construction disputes are not going away any time soon, so every contractor will eventually be faced with the prospect of deciding whether to go to court to get paid for its work. Litigation in the court system has been the traditional collection method for contractors, but the length and costs of litigation mean that recovering might take years and absorb a chunk of your recovery, and the backlog in the court system has led courts to encourage litigants to seek alternatives to litigation – other means of getting paid.
Mediation and arbitration are viable alternative methods of resolving construction disputes, and the Nassau County Bar Association Alternative Dispute Resolution, or ADR, program offers both services from qualified neutrals at competitive prices.
Mediation is useful because it dispenses with the time-consuming, costly discovery practice and trial that are required in litigation. In mediation, the parties mutually select an impartial person from a pool of approved mediators with special training and, with the aid of the mediator, attempt to negotiate a binding agreement to resolve their differences. Rather than issuing a binding decision regarding who is right or wrong, a mediator facilitates communication and provides an impartial viewpoint to assist the parties in coming to their own resolution, so that the parties have flexibility in determining a mutually agreeable outcome.
Arbitration, meanwhile, has the benefit of a shorter process much like mediation, but like litigation it involves a neutral third-party hearing each side’s case and issuing a binding decision in much the same manner as a judge. The procedure is streamlined, which saves costs, and the arbitrator’s decision, or award, can be enforced like a court’s judgment. Thus, arbitration is a good alternative for parties who want the benefit of a judgment on the merits of their cases without going to the time and expense of litigation.
Traditionally, organizations such as the American Arbitration Association (the AAA) have dominated the provision of mediation and arbitration services, but the AAA’s administrative fees for an arbitration can run in the thousands of dollars (for example, $3,000 for a $75,000-$150,000 claim), plus the hourly fees for the arbitrator. The Nassau County Bar Association’s fees, on the other hand, consist of a $500 administrative fee for each case, plus a set $300 per hour charge for the arbitrator or mediator. The Nassau County Bar Association panel of mediators and arbitrators consists of attorneys with a minimum of 10 years’ experience, qualified by a Judiciary Committee of the Nassau County Bar Association itself. The parties select their mediator or arbitrator, so they even have the opportunity to choose someone with knowledge of construction law and the unique issues it presents.
The bottom line for contractors is getting paid in the quickest and least expensive manner, so the Nassau County Bar Association ADR services are worth considering. You can learn more about the benefits of mediation and arbitration by consulting with a construction law attorney, and you can learn more about the ADR programs offered by the Nassau County Bar Association by visiting its web site, www.nassaubar.org, or by calling (516) 747-4070 or emailing [email protected].
John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: [email protected] or (631) 608-1346.
This is a general information article about Long Island construction employment and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer who has experience with Long Island construction law for advice on a particular circumstance.
1] Information retrieved from https://www.adr.org/aaa/ShowPDF?doc=ADRSTAGE2031504