It’s no secret that residential construction disputes are stressful. From the owner’s perspective, a residential construction dispute is when further work or repairs need to be completed and paid for by the party responsible for using faulty materials or encountered issues with the design, construction, or renovation process. Where things get more complicated, however, is when there are multiple responsible parties. For example, your dispute may include strata councils, architects, engineers, warranty providers, contractors, etc. Although there are many different types of disputes that arise from various scenarios, below you’ll find more information and general guidelines towards how you can address yours.

Residential construction disputes can be solved in many ways depending on various factors. Essentially, there are four main approaches to handling a residential construction dispute:

  • Negotiation
  • Mediation
  • Arbitration
  • Litigation

You can think of these resolution processes as existing on a scale from least formal to most formal, with negotiation being the least formal. 

What is Negotiation?

Negotiation means sitting down with the other party or parties involved. The most important aspect to note when doing this is to focus on interests rather than positions. Ultimately, your goal is to come to an agreement that addresses everyone’s needs more than without negotiating. A more formal version of this process is to have each party represented by a lawyer who negotiates on their behalf. 

What is Mediation?

Mediation means involving an impartial third party to the meeting. The mediator helps settle the issue, but ultimately does not have any decision-making power.

Negotiation and mediation share similar advantages and disadvantages which you can find below.

Advantages

  • May be faster
  • May be less expensive
  • Occurs in private
  • Setting of the meeting can be informal
  • Settlements can be made that are not possible in the courtroom
  • Flexible – all parties have control over the process and outcome
  • Results are confidential

Disadvantages

  • Dependent on all the involved parties cooperating
  • Agreements are not binding unless the involved parties take steps to make them so

What is Arbitration?

Arbitration means involving a neutral and independent third party, like mediation. However, there are two key differences. Firstly, arbitrators are adjudicators which means that they are able to make binding decisions. Conversely, mediators have no decision-making power and simply assist in negotiating a resolution. Secondly, arbitrators focus on rights rather than interests. Essentially, when all the involved parties agree to arbitrate, they also agree to accept the decision of the arbitrator as final and legally enforceable. Thus, the arbitrator’s decision is very difficult to appeal and the parties cannot bring the same dispute to the courts.

Advantages

  • May be faster
  • May be less expensive
  • Flexible – all parties have more control over the process when compared to litigation
  • Occurs in private
  • Setting of the meeting can be informal
  • Not dependent on the parties cooperating
  • Decisions are usually binding

Disadvantages

  • Decisions usually cannot be appealed

What is Litigation?

Litigation means resolving disputes in court. It is also based on rights. Therefore, you have a cause of action against a person or group of people if you believe your rights have been infringed upon by them. Conversely, the other party or parties will be responsible for disproving your claims.

Advantages

  • Not dependent on the parties cooperating
  • Certainty – a final decision will be made and enforced by the court
  • Disclosure – the process ensures that all relevant information will be disclosed and evidence will be tested for accuracy

Disadvantages

  • May be more costly
  • May be more time consuming
  • Occurs in public
  • Results are not confidential
  • Not flexible – all parties have little to no control over the process or outcome

Therefore, when deciding how to handle or approach your residential construction dispute, you will need to consider the advantages and disadvantages of each option. You must also understand the complete details of your dispute. At Sodagar & Co., we understand that this decision may be incredibly difficult, but we have the experience necessary to resolve any legal issues that arise from the construction and infrastructure industry. Ultimately, our goal is to help you prepare for the dispute resolution by ensuring that you understand the step-by-step process.

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