Class Arbitration and the Construction Dispute: Analysis of Current Jurisprudence and Practical Tips for the Construction Practitioner

Abstract

Construction contracts rarely focus on the potential risk that if there are multiple parties involved, engineers, other design professionals, and contractors may face class arbitration if disputes arise. Class-action arbitration or “class arbitration” presents unique challenges not present in traditional arbitration. This paper introduces some of the risks potentially facing engineers, other design professionals, and contractors, as well as key topics involving class arbitration and the availability of the class action in the context of a construction contract with an arbitration clause. Intrinsic to this discussion is an understanding of the pros and cons of opting for class arbitration and the current state of the law. Recent developments will impact class arbitration in the construction industry, and this paper offers suggestions as to how parties may utilize the developing arbitration law to their advantage and draft agreements that both accomplish the goals of the parties and withstand judicial scrutiny.