In many construction contracts, the parties involved, including the property owner, the general contractor and subcontractors, will agree to submit any legal disputes they have to arbitration.
The idea behind their doing so is to cut down on the costs of filing suit every time someone involved in a big construction project disagrees with another party's decisions. Moreover, arbitration also allows the parties to come to a decision relatively quickly so that the construction project can stay on track.
Because arbitration is a common practice in the world of construction and because construction law is itself a complicated area of the law, the American Arbitration Association has put together special rules that govern arbitrations involving construction disputes.
These rules offer those in the construction industry options and overall flexibility when it comes to ironing out legal problems that will inevitably arise in the middle of a project.
While detailed questions about these rules should be referred to an experienced attorney, contractors, property owners, and others can and should have some general knowledge about the arbitration process.
Basically, arbitration only takes place when both sides agree to the process. Instead of involving a courtroom and lots of litigation, arbitration is meant to be a relatively simple process in which disputes get resolved on their merits and with fewer formalities.
Still, a neutral third party, which can include a panel of retired judges, experts in the construction field and the like, will ultimately hear evidence from both sides and then decide the case. Most of the time, an arbitrator's decision cannot be appealed or reviewed further.