Big construction projects always involve a large number of people and organizations – the owner or owners, the construction manager, an engineer or engineers, architect(s) or contractor(s), subcontractors, suppliers, and insurance companies, to name just a few. If the project is to succeed, all these stakeholders must work well together in a complex symphony. Their interrelationship means that any dispute in one relationship – between the contractor and a subcontractor, for example – will affect many other relationships, such as that between the owner and the contractor or the contractor and other subcontractors. And because large-scale projects always involve large sums of money and any dispute can be costly in time as well as dollars, avoiding disputes or resolving them promptly is paramount. So it’s no surprise that the construction industry is one of the major users of dispute resolution methods, including innovative tools.
The articles featured in this issue of Dispute Resolution Magazine usefully highlight these innovative ideas – including demonstrating their potential applicability to other industries and areas. The first such article outlines one such method called dispute review boards. The authors of that piece, Albert Bates and Zachary Torres-Fowler, attorneys at Troutman Pepper, explain how these panels of three independent individuals, all with expertise and understanding of the projects in question, are appointed by the parties at the start of a project to resolve ongoing disputes quickly and efficiently without resorting to litigation or arbitration. This resource, the authors note, provides a quick, economical, and less confrontational way of resolving disputes, which can allow the parties to retain relationships for future business opportunities.
Construction disputes often involve complex technical issues, and experts who can help a judge or arbitrator understand the intricacies of a dispute are an integral part of construction dispute resolution. In recent years, the industry has turned to a process called hot-tubbing, in which experts provide concurrent evidence in a conversational format rather than the traditional question-and-answer arrangement. Richard Flake, a construction arbitrator based in Houston, introduces us to this new tool in his article, and Toshi Dezaki and Sena Gbedemah, both senior managing directors at the consulting firm Ankura, examine how hot-tubbing works in practice in their article.
The issue’s final article, by Lionel M. Schooler, a senior partner with Jackson Walker in Houston who is also a member of Dispute Resolution Magazine’s editorial board, discusses a recent Supreme Court decision that has an impact upon international construction arbitrations. Although the scope of this decision is broader than the construction industry, the ruling has immense impact upon it, as a large number of construction disputes in the United States involve international parties.
As the old saying goes, necessity is the mother of invention. The construction industry, with all its complex relationships and high-stakes projects, has provided fertile ground for innovation in dispute resolution. Whatever your specialty and interests, we think you’ll find much to learn here.
– The Dispute Resolution Magazine editorial board