by Quenda Behler
I advise clients to stick to arbitration for two reasons: The
judge and jury may not have the expertise to understand the
dispute, and litigation takes more time.
A contractor once said to me, "You're always pushing
arbitration. I listened to you and instead of suing, I went to
arbitration. It cost me thousands of dollars and took months to
get a decision. What kind of crummy advice was that?"
I admit it: In recent years arbitration has become more like a
regular lawsuit and less like mediation. Today the process is
quite complicated and includes many of the trappings of
litigation — lawyers, expert witnesses, discovery,
competing motions, and so forth.
Even so, writing an arbitration clause into your contract is
still better than falling back on the standard legal process of
a lawsuit, where you hire your lawyer and the other guy hires
his lawyer, and then they fight it out in court in front of a
But think about it: What's so wrong about going to court?
People may whine about abusive lawsuits and innocent losers,
yet in most cases justice eventually prevails. In fact, our
courts are so fair that it was almost inevitable that
arbitration would become more like a regular lawsuit.
Take the discovery process, which didn't used to be common in
arbitration but is beginning to be so. Discovery takes place
before trial: It's when the lawyer for one side wants to read
the business records of the guy on the other side. Naturally
the other guy's lawyer attempts to limit access.
Is it fair to go waltzing through your opponent's business
records looking for proof against him? Of course it is. This
isn't some sports game — it's about who's right and
who's wrong. Often a significant amount of money is involved;
sometimes the outcome determines whether someone stays in
For example, you won't have records showing how the architect
came to give you the wrong electrical specs. But the architect
probably will. If you sue him because he was wrong —
or worse yet, if someone sues you because he was wrong
— you'll probably need his records to prove your case.
And that will be true whether the matter is handled through
arbitration or litigation.
So if I think this country's judicial system is the fairest in
the world, why do I advise people to stick to arbitration? For
two reasons: The judge and jury may not have the necessary
expertise to understand the dispute, and litigation takes more
Let's start with expertise. The construction industry requires
a lot of knowledge and experience. When you go into
arbitration, the parties — you and your opponent
— get to choose the arbitrator. The process will go
faster if you pick one who's familiar with the industry,
because he or she will already understand things like building
codes and who is responsible for what on the job site.
But if you're in litigation in front of a judge and a jury,
you'll spend many hours and huge amounts of money putting
experts on the witness stand to explain what an electrical
subcontractor does and what a building inspector looks at
during an electrical wiring inspection and the like. Maybe the
judge and jury will understand your expert testimony; maybe
they won't. You could be talking to people who have never seen
what is under a cover plate.
In addition to all that, by the time you get to the real issue
of what kind of electrical service the architect should have
specified, the jury members have been listening to expert
witnesses for so long their eyes have glazed over and they're
Speed and Flexibility
Then there's the question of time. The guy whose comment
inspired this tirade was complaining because his arbitration
process took almost seven months. Believe me, when it comes to
litigation, that's nothing.
Sure, a very complicated case can take a long time even in
arbitration, but that same case would almost certainly take
longer in litigation. Arbitrators have the power to frame
issues, direct cases, and limit pointless activity in a way
that judges do not. Throw in the appeals process that's
available in litigation, and we could be talking about spending
years on a case that in arbitration could have been wrapped up
in a few months.
Furthermore, when it comes to taking evidence, arbitration is
less structured and more open to innovation. I've even heard of
witness examinations conducted by telephone. I was astounded,
but I suppose such an approach is better than serving a witness
with a subpoena that requires sitting in a courtroom and
waiting an indefinite amount of time to be called. You'd
certainly wind up with a friendlier witness.
An arbitrator also can put limits on witnesses that a judge
never could. He can require a witness to summarize, or he can
put a witness on a clock. That would never happen in a regular
courtroom — or if it did, the next stop would be the
Here's another big advantage: Arbitrators can ask questions
— freely — and as many as they want. If
there's something they like to see brought into evidence, or
something they'd like the lawyers to explain further, they can
just ask. Of course, there's a process that allows judges and
juries to ask questions, too, but it's ponderous, complicated,
and inefficient, so mostly they don't do it.
Making a Choice
For all of these reasons, I stand by my original "crummy"
advice and strongly recommend including an arbitration clause
in building contracts. I like to write the clause so that my
client, whoever that is, can choose between arbitration and
For example, a simple clause of this kind could read,
"Disputes may be resolved by arbitration, if the contractor
demands arbitration, by giving written notice of intent to
arbitrate to the property owner no less than 60 days after the
dispute arises." This doesn't mean that the contractor must
arbitrate the dispute, only that he can if he chooses to.
But if arbitration is so great, you might reasonably ask, why
would anyone in the building industry ever choose to litigate?
And the answer is that in certain circumstances litigation
Here's my advice about which legal avenue to pursue: If it's a
question of fact, go for arbitration. If it's merely a matter
of collecting money — and there's no issue about
whether that money is actually owed — choose
Quenda Behler Story has practiced and taught law for more
than 25 years.