The 2007 AIA Document: Changes in Formal Dispute Resolution
May 2009
For decades, the American Institute of Architects
(AIA) family of documents has required that disputes be resolved by arbitration.
A revision made to the AIA family of documents issued in 2007 is that the AIA
has now moved to a process that puts more responsibility on the parties for
selecting the dispute resolution method to be used.
by Kenneth
A. Slavens
Husch Blackwell
Sanders LLP
The provisions in the AIA documents requiring the resolution of disputes
by arbitration was frequently claimed to be a trap for the unwary. Others involved
in the construction process have complained that arbitration was becoming the
equivalent of litigation with the same associated expenses, resulting from discovery
costs, expert fees, and attorney fees, as well as time delays before final resolution.
The Change Away from Automatic Arbitration
The AIA documents no longer require resolution by arbitration. The new A201-2007
implements a "check box system" by which the parties will be offered options
as to the choice of the dispute resolution process: arbitration, litigation,
or some other party-fashioned option. So, at the time of contract, the parties
must choose which dispute processes they will agree to use in the event a dispute
arises.
Parties and practitioners must keep in mind that, assuming the parties do
not make another choice, the default dispute resolution process under A201-2007
is litigation—not arbitration. Those who have used the AIA documents for years
may have become accustomed to the default selection of arbitration as the dispute
resolution process. The instructions provided by the AIA make clear that the
AIA does not mean to imply that by allowing litigation to become the default
option, it believes litigation is the preference. The choice now must be made
by the parties.
Even in the event the parties, either consciously or simply by failure to
make a choice, end up "defaulted" into litigation, the parties can always agree
after execution of the contract or when the dispute arises to submit their disputes
to arbitration. And, if the parties choose to arbitrate their disputes, the
default selection for the arbitration forum remains the American Arbitration
Association. Of course, the parties may agree otherwise in their contract.
The Dispute Resolution Rules at the Time of Contract Apply
Another issue related to the dispute resolution process that the AIA tried
to address by its recent changes relates to the rules applicable to the arbitration
or the mediation. Previous editions of the AIA documents provided that the rules
applicable to the mediation or arbitration would be the rules in place at the
time the dispute resolution process is instituted. However, the AIA felt that
there was an inherent problem because the rules which govern the various organizations,
such as the American Arbitration Association, that administer arbitrations or
mediations are known to change with the passage of time.
As a result, the AIA has now made it clear that the rules which will apply
to a dispute resolution procedure are the rules in effect at the time the parties
enter into the agreement as opposed to those that may be in effect at the time
the dispute resolution process is instituted. The change was made so that the
parties would know exactly what the dispute resolution rules will be at the
time the selection of the dispute resolution process is made and administrating
body is selected.
Regardless of whether the parties select litigation or arbitration, or some
other means by which the dispute resolution process is delegated to some third
party, AIA A201-2007 still provides that mediation is a condition precedent
to arbitration, litigation, or any other dispute resolution process.
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