How does a pirate solve a dispute (besides walking the plank)? Answer: Arrrrbitration!
The pros and cons of arbitration are discussed in a separate post. This post concerns the waiver of arbitration by progressing too far with litigation. How far is too far? Generally, it’s too far when the party refusing to arbitrate has been harmed (e.g., too much cost incurred) by the litigation.
If you’re sued by someone else, can you demand arbitration? If you’re suing someone else, can you later demand arbitration? The answers depend on:
- Does your construction contract have an arbitration provision?
- How far has the litigation gone before someone demands arbitration?
Even when a defendant waited 22 months after being sued to demand arbitration, the Court found the defendant had not waived its right to arbitration, in part because it had not (for nearly two years) actively involved the plaintiff or the court and so avoided causing too much harm to the other party.
But, don’t wait too long! You’ll save time and money by deciding and acting sooner rather than later whether to arbitrate.
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