Authored by attorney Brett Saunders
Think about the last major construction project you or your company was involved in. Chances are, that project was being performed under a contract that contained an arbitration clause. These clauses require disputes to be resolved through binding arbitration, instead of traditional litigation, and are extremely common in the construction industry. Almost all of these clauses require the arbitration to be performed under the Construction Industry Rules of the American Arbitration Association (AAA). The AAA is one of the largest and most well-known arbitration organizations in the United States, and these rules are intended to address various issues that arise during construction disputes.
The Construction Industry Rules were recently revised on July 1, 2015. The new changes primarily focus on fleshing out the preliminary steps taken before the arbitration hearing takes place and provide a more structured and detailed arbitration process. For example, now the initial hearing between the parties and the arbitrator is much more thorough. Under the new rules, the AAA has provided a checklist of 20 items that may be addressed during the preliminary hearing.
Another revision to the Construction Industry Rules allows for emergency relief and an expedited appointment of an arbitrator. Parties to any construction contract entered into after June 30, 2015 may apply for emergency interim relief before an arbitrator that will be appointed within 24 hours of the AAA’s receipt of the request. A party may request this relief by notifying the AAA and the other necessary parties to the arbitration. The AAA will then quickly appoint an emergency arbitrator to address the emergency issue. Finally, the selected arbitrator now has more power to enforce the Construction Industry Rules in each dispute by issuing orders to parties that refuse to comply with the Rules.
Because construction contracts often require disputes to be governed by the Construction Industry Rules it is important for all parties in the construction industry to be familiar with them, including any changes that have taken place. A copy of the Construction Industry Rules of the American Arbitration Association, including the most recent revisions, can be found on the AAA’s website.