by Girard R. Visconti
Construction matters should be mediated and/or arbitrated. The mediation/arbitration process has worked successfully throughout Rhode Island, Massachusetts, Connecticut and the United States.
The advantages of arbitration are accelerated hearings, reduced costs, informality, expertise and privacy. Opponents argue that there is favoritism with arbitrators; hearings are protracted; and provisions of contractual rights, case law and statutes are disregarded.
The mediation/arbitration process results in a reduction of trials in our court system, limited use of discovery, lower legal fees, informality of hearings, and timely decisions.
The mediation process, prior to an arbitration, is successful. The parties select a mediator, mediation memos are prepared and a date is established. The mediator allows both parties to give an opening statement of their positions, frame the issues, and conferences with each party to discuss the “good and bad points of a case.” After meeting with each party respectively, the mediator attempts to come to a common ground for settlement. My position is that a mediator should be forthcoming and inform the parties individually of their strengths and weaknesses of a case, since all matters in the mediation are confidential and cannot be disclosed thereafter without the consent of the parties. Because mediation is non-binding, both parties have nothing to lose except for costs and time.
Arbitration is binding, and the same advantages of mediation go along with arbitration. The basic difference is that arbitration is binding, subject to state statutes which allow confirmation, modification and vacating of arbitration awards, which is extremely limited.
There is no question that arbitration and/or mediation is the way to go, versus litigation. The parties should be cautioned of the risk of arbitration, which is a binding resolution of a dispute. Courts have on numerous occasions held that states have a strong public policy in favor of the finality of arbitration awards – to preserve the integrity and efficiency of arbitration proceedings, judicial review of arbitration awards is extremely limited. Parties who have contractually agreed to accept arbitration as binding are not allowed to circumvent an award by coming to the courts and arguing that the arbitrators misconstrued the contract or misapplied the law.”
Arbitrations can be extremely useful to the resolution of disputes. However, caution should be taken when submitting a matter to an arbitrator. There is a different standard than submitting the matter to a court of competent jurisdiction. It is a very difficult road to vacate an arbitration award, knowing that an arbitrator could disregard the terms of a contract, statute or case law. Therefore, it is important to consider whether or not arbitration should be utilized, and perhaps to limit the role of the arbitrator in ruling on various issues. More importantly, the selection of an arbitrator is crucial.
There are many “seasoned arbitrators” who are extremely fair, and of course, there are retired members of our judiciary who should be utilized as arbitrators since they have the depth and experience of deciding cases on legal principals.
Girard R. Visconti, Esq. is at Savage Law Partners, LLP.