What is Construction Arbitration in Missouri?
Oct 24 2024 On Behalf of David M. Duree & Associates, P.C. Construction Law
In Missouri, a construction-related dispute can happen to simple house-flippers or large-scale developers alike. Whether a dispute is about delays, payment issues, or defective work, the parties can avoid a costly and lengthy courtroom battle by going the arbitration route. Let’s take a closer look at construction arbitration: what it is, why it can be an effective way to resolve disputes, and how the process works for builders in the Show-Me State.
What is Construction Arbitration, and Why Do People Choose It?
Arbitration is a type of alternative dispute resolution. Where mediation focuses on negotiating a mutually agreeable settlement, arbitration involves a neutral third party listening to both sides, reviewing the evidence, and issuing a binding or non-binding decision (known as an award.)
There are a few reasons why parties to a dispute may choose arbitration over litigation, such as these:
- Efficiency and cost – Arbitration is generally more streamlined than a courtroom trial, with fewer procedural requirements and faster scheduling. That leads to lower fees and costs and less chance of a delay prolonging the dispute.
- Industry knowledge – Some arbitrators have experience in construction law or the technical aspects of the industry. Their decisions can be more informed than those of a judge or jury that isn’t familiar with construction.
- Confidentiality – Court cases are part of the public record, which can put a business’s sensitive information, financial details, or trade secrets at risk. Arbitration proceedings are private by contrast.
- Not always binding – Arbitration proceedings can be binding or non-binding. If both parties are dissatisfied with the outcome of a non-binding arbitration decision, they can pursue other avenues to resolve the dispute.
How Construction Arbitration Works in Missouri
Sometimes, construction contracts include an agreement to arbitrate. This binding clause requires the parties to the contract to resolve any disputes through arbitration. If a contract has no agreement to arbitrate, the parties can still mutually agree to go through arbitration should a dispute arise.
Both parties have input when selecting an arbitrator and often agree on one with specific expertise related to the dispute. Some contracts designate specific organizations to handle the case. If a court compels arbitration and the parties can’t decide on an arbitrator, it will appoint an arbitrator for the parties.
During an arbitration hearing, both parties present their case just like in a court trial. Procedural rules and rules of evidence are much less formal, making for a flexible process. After reviewing the facts, the arbitrator issues their award in writing.
Missouri Laws Governing Construction Arbitration
The Missouri Uniform Arbitration Act (MUAA) governs how arbitration works in the state, together with the federal United States Arbitration Act of 1925 (9 USC §§ 1-9.) Both laws make arbitration agreements enforceable with some exceptions.
Generally, it is more difficult to appeal an arbitration award than a court verdict. A judge has the power to vacate an arbitration award under very specific grounds, including corruption, fraud, or arbitrator bias or misconduct.
There is a strict time limit to file a motion to vacate, and the court generally cannot reassess the facts or law that the arbitrator applied. If the court confirms the award by denying all pending motions to vacate or modify it, it becomes an enforceable court judgment.
Contact a Construction Arbitration Attorney Serving St. Louis, MO
If you’re considering pursuing or already in the process of arbitration, you deserve an experienced attorney to help you navigate the complex rules and procedures. As a former civil engineer and commercial mechanical subcontractor, David M. Duree understands the complexity of the construction industry as well as the laws that govern it. Since starting his solo practice in 1999, he’s focused on representing builders, franchisors, engineers, and inventors throughout Missouri and Illinois when the threat of litigation strikes. Contact David M. Duree & Associates, P.C. at (618) 628-0186 for an initial consultation.