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.
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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