Answer to Question 1
The advantages of using arbitration over litigation are the following:
a) The amount of time required for arbitration is minimal compared to litigation.
b) Arbitration proceedings could commence as soon as both parties are ready to
present their evidence and the arbitrators have reviewed the construction
contract and documents.
c) Arbitration is also less expensive than litigation since lawyers are not required
and members of firms may present their own evidence. Instead of paying for
attorneys, the disputants pay the arbitrators by the hour to review the
construction documents and to conduct the arbitration proceedings.
d) They are private proceedings, unlike court cases that are part of the public
record. Having private proceedings helps preserve the reputation of a firm since
others will not know about the disputes and how they are settled by the
arbitration panels.
e) The location, time, and the arbitrators are all selected by the disputing parties not
the court system. This allows arbitration proceedings to be conducted at
construction job sites where the arbitrators could physically review the items
under dispute.
f) The rules of evidence that are used in the court system, which require someone
to refer to something before it is allowed to be entered as evidence, do not apply
and anyone or anything could be presented as evidence. This allows all types of
construction documentation to be presented in any format.
g) Discovery could also be included in arbitration proceedings if it is stipulated in the
arbitration clause in the construction contract.
h) The proceedings do not follow precedent law, which is required in court
proceedings; therefore, each case is evaluated on its own merits not on how
previous cases were settled by the courts. This allows for more equitable
settlements since disputes are not evaluated based on previous case law
disputes that may or may not be similar to the current dispute. Not having to
follow precedent law allows cases to focus on technical issues rather than legal
issues.
i) After arbitration proceedings are complete the arbitrators have thirty days to
provide their decisions and the amount of awards. Settlement awards are based
on actual losses and there are no awards for damages unless punitive damages
are awarded because a claim was unrealistic or they would have been awarded
if the dispute had been settled in a court of law.
Answer to Question 2
B
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