In my recommendation to use arbitration instead of mediation, I said there were a couple of qualifications in regards to it. One of these qualifications is the selection of your arbitration panel – especially when the construction dispute is large enough to warrant having a three member panel of arbitrators.
The first criteria I recommend would be using a Panel of Neutrals. A Panel of Neutrals consists of three individuals that do not have an interest or conflict with the parties in the dispute. They will work impartially to determine the outcome of the arbitration.
The next one is controversial, but should not be that way. Remember, you are engaged in resolving a construction dispute. Your judge and jury will be the three people that are conducting the hearing. Your dispute likely involves basic problems with construction practices, procedures, actions, etc. with both parties only then running to the contract to see what they are “really obligated” to do. You need to rely on construction experience along with legal knowledge. To resolve a construction dispute, you should have a panel of arbitrators that has at least one, and even better, two construction professionals. These two people should then have the benefit of having the third member of the panel as an attorney for legal considerations. Remember, your dispute likely started with a construction related problem, not a legal problem!
All too often the participants rely upon their attorney to select other attorneys as the arbitrators. Keep in mind, the attorney knows construction law. They know legal procedures – that’s their job. They may or may not know construction practices and procedures. Sure they know written notice is contractually required, but not always done on construction projects. However, do they know the problems associated with revising PFD’s, P&ID’s and 1-Line Diagrams during the project? Do they know how each of the parties can misrepresent progress on construction schedules? Do they know about pre-operational testing and startup? What about Debottlenecking?
This is where the construction professionals cut through the baloney and resolve disputes. They know details of construction practices and procedures. This is why the use of construction professionals on construction arbitration panels will provide the best decision on construction disputes.
