Consistency and Reliability of Construction Arbitration Decisions: Empirical Study

Abstract

While construction arbitration is analyzed in a plethora of information, there is a paucity of hard data about the consistency and reliability of the construction arbitration decision. The assumption that an industry familiar adjudicator will provide a reliable and consistent decision in comparison with the expectation of the industry as a whole has not been tested. This paper presents the results of a study on the reliability and consistency of construction arbitration through the examination of a variety of arbitrators’ decisions on the same construction dispute scenario. Data was collected from attorneys, owners, owner representatives, contractors, and subcontractors. Compilation of the survey results finds little consistency in the arbitrator’s awards, but with much thoughtful care in award consideration. The results suggest that the arbitrator’s industry background does not influence the arbitrator’s award. There is also no significant award bias due to the arbitrator’s education level or years spent in construction business. The results also indicate that previous arbitration experience does not predict the award outcome. This paper concludes that construction arbitration is wholly unpredictable. However, the result will be a well-reasoned and unbiased decision.