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Arbitration in construction disputes

When disputes arise in commercial matters, one way of resolving them without resorting to litigation is arbitration. Construction agreements commonly include an arbitration clause in the contract in order to save time and money when disputes arise.

An arbitration clause is legally binding in England and Wales through operation of the Arbitration Act 1996. There are many different ways for a construction contract to incorporate the arbitration procedures. The contract has the option of including all of the major arbitration terms (such as how many arbitrators, how long each side has to respond etc.). This is not commonly done because of the amount of detail that would need to go into the contract.

A second method is to leave all the terms up to legislation. The Arbitration Act includes many sections which detail the terms of arbitration if the contract is silent on them. In a way it is there to catch any areas which are not covered by the original agreement. A third method, which is also the most common, consists of including a reference to an existing document (published by a third party) which fleshes out all the terms of the arbitration agreement.

In contract for construction, arbitration clauses usually refer to industry-specific arbitration terms and conditions. If you are involved in a construction dispute, it is important that you see if your contract mentions arbitration. Construction cases can be complex and often require expert testimony. Arbitration, when properly handled, can avoid unnecessary costs and complications.   

If you would like to obtain legal advice on construction, arbitration or dispute resolution, Caven can put you in touch with a local construction solicitor free of charge. So, if you have any questions or would like our help in finding local construction solicitors please call us on 0800 1777 167 or complete the web-form above.

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