In British Columbia, construction conflicts can be complex, involving multiple parties and issues. Arbitration offers parties an alternative to traditional litigation, providing a more flexible and private means of resolving disputes.
In British Columbia, the Arbitration Act, SBC 2020, c 2, governs the arbitration process. Much like in court, parties in arbitration present their case to an impartial third party, known as an arbitrator, who will consider the relevant facts and applicable law to make an award that is legally binding and enforceable.
Unlike in court, parties in arbitration have the flexibility to choose their arbitrator, decide on procedural rules, and tailor the process to suit the specific needs of their dispute. For example, in choosing an arbitrator, parties may consider an arbitrator’s specialized knowledge or background in construction, the arbitrator’s availability to hear the evidence and make an award , and the arbitrator’s fees. They also allow for speedier resolution of disputes than proceeding in court, which can have lengthy and uncertain wait times for hearing dates and decisions.
While arbitration may be more efficient and flexible, parties should be aware that it may not be less expensive than traditional litigation, particularly if the process becomes prolonged. The less formal nature of arbitration may lead to concerns about the thoroughness and fairness of the process, particularly in more complex disputes. Like court, parties must prepare to advance their case in arbitration by presenting comprehensive and organized written and oral evidence and arguments to the arbitrator in support of their case.
However, the potential cost awards in arbitration are greater than in a court proceeding. In arbitration, the unsuccessful party is typically responsible for the successful party’s (reasonable) actual legal fees and expenses, and the arbitrator’s fees, in addition to its own legal fees and expenses. This is welcomed by the successful party, but can lead to an expensive outcome for the unsuccessful party.
Arbitration decisions are usually final with limited avenues for appeal. While this may give the parties certainty to move on from the dispute, it may also leave parties dissatisfied with the outcome, with little to no recourse to have the decision reconsidered.
An experienced construction and arbitration lawyer can protect your interests by ensuring appropriate arbitrator candidates, procedural rules, and processes that make sense for your case. We will work with you to tailor arbitration procedures to your unique dispute and to present your case effectively before the arbitrator.
Arbitration is a useful tool for parties to privately, and more quickly, resolve their construction disputes through a tailored process. Your lawyer’s specialized skills and expertise will be instrumental in guiding you throughout the process.
To resolve a dispute using arbitration, there must be an agreement to use this process, that is usually set out in the contract between the parties. If you are negotiating a new construction contract, this is the time to consider whether you would prefer to resolve any dispute by arbitration or through the court process. Contact us to discuss how to incorporate this process into your contract.
If you are facing a construction dispute we encourage you to contact us to learn more about your options.
Article by: Stephanie Hu
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