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California Contractors: Protecting assets from lawsuits

“Time is of the Essence” Provisions in Contracts: What Does it Mean?

Construction law in California | attorneys / lawyers in Sacramento

Construction Litigation, Arbitration and Mediation

It is generally better to resolve disputes long before it becomes necessary to enlist the help of an attorney to pursue or defend claims. This is true regardless of the area of law. In the area of construction, the contract between the parties often determines whether the claim will be resolved through litigation, arbitration or mediation.

At Porter Law Group, we understand not only the legal issues surrounding construction disputes, but how various situations frequently play out in the real world. Whether in litigation, arbitration or mediation, we use our skill and experience to pursue favorable results for our construction clients.

Differences between litigation, arbitration
and mediation

If you are a viewer of TV courtroom dramas, you are familiar with the litigation process. To commence a litigation, a lawsuit is filed in the County or Federal Court. Depositions and other forms of “discovery” are made to determine the relevant facts and access the relevant documents. Various motions to the judge may be made, and eventually the case is scheduled for a courtroom trial. Along the way, efforts are made to settle the case before trial. These settlement efforts are either imposed by the court or initiated by the litigants or their attorneys. Most of these efforts take the form of a nonbinding or “judicial” arbitration or mediation or a “settlement conference,” which is similar to mediation. Most litigations settle before they reach their trial date. If the case does not settle, then it is tried before a judge or jury.

Arbitration is similar to litigation, except that instead of having a “trial,” the parties have an “arbitration.” Instead of a judge or jury, there is an “arbitrator” or a panel of arbitrators. Most key events take place in the conference room of the arbitrator, who is often a retired judge or senior attorney who is also sometimes particularly knowledgeable in the area of law at the heart of the dispute. Sometimes arbitration is required by the terms of the contract that binds the parties. Other times the parties mutually agree to use arbitration instead of going to court.

The rules under which arbitration is conducted are sometimes determined by prior agreement, and sometimes determined by the forum selected. For example, the widely used American Arbitration Association has published sets of rules for conducting arbitration. The cost of the arbitrator and arbitration is often split between the parties. Sometimes, the party who wins the arbitration receives an arbitration decision which requires the losing party to reimburse the winning party for what they paid for the arbitration and arbitrator. Arbitration decisions are often sent to the court so the judge can give court approval to the decision as if it had been originally decided by a judge or jury. In fact, it is usually more difficult to appeal an arbitration decision than one originally made by a judge or jury. Arbitration is often less expensive than litigation, although this is not always the case.

Mediation is different from either litigation or arbitration. With mediation, the parties appear before a neutral learned third person or sometimes a panel of such persons who have been given the title of “mediator.” Through a series of discussions and negotiations known as “mediation,” an effort is made to resolve the differences between the parties, usually through compromise. Sometimes mediation is used during the litigation or arbitration process to try to resolve disputes and avoid the further time and expense of continuing litigation or arbitration. If mediation is not successful, the litigation or arbitration process continues. Mediation is generally nonbinding. The parties usually share the cost of the mediator equally. Mediation is usually less expensive than either litigation or arbitration. Where the parties are reasonable people and a good mediator is used, it can be an excellent and cost-effective mode of dispute resolution. Where either party is unaware of the law, or the facts, or is emotionally unsuited to compromise, mediation is often unsuccessful.