Can Construction Disputes Be Resolved Using Baseball Arbitration?

Baseball arbitration sounds a little uncommon to you? Well, this term has been derived from professional baseball and is used to implement a procedure to resolve a dispute. Baseball arbitration helps in cutting down the costs associated with arbitration and also speeding up the process of dispute resolution. This arbitration is likely to benefit the construction industry as its inclusion and implementation would solve the construction disputes. The details below are not theoretical but based on a few practical experiences of what happens when the concepts of baseball arbitration are applied to construction disputes. Read on to have a general overview of baseball arbitration and the benefits, drawbacks, and limitations.

An Overview OF Baseball Arbitration

Baseball arbitration was introduced as a substitute for free agency that got players involved in professional baseball. In lieu of free agency, teams and players could make a request for salary arbitration involving a panel having not more than three members. The involved parties would provide evidence that would support the salary amount they made a request for.

A number of factors such as player performance, the team record, fan base, previous compensation, comparative salaries, as well as physical or mental flaws. Both the parties would proceed with their submission of the exact salary they suggest is apt. The process till evidence submission is more or less the same in baseball and standard arbitration. However, strict stipulations are imposed on the panel, thus limiting their ability to award a decision during baseball arbitration.

The panel has the ability to either accept the salary proposed by the player or accept the salary proposed by the team. The panel doesn’t have the power to split the figure or award a figure that’s different from that proposed by the team or player. The panel’s award will be considered final. No explanation will be issued thereafter.

Benefits In Case Of Construction Disputes

The approach of baseball arbitration is considered to be quite useful as far as the construction industry is concerned. The all-or-nothing approach that this arbitration is known for compels the involved parties to do a practical assessment of the damages as claimed. Since the parties are bound to go through the claim amounts in detail, it’s pretty normal for wise parties to consider the pros and cons of claiming a certain sum.

Rephrasing it in simple words, the approach of baseball arbitration would reward the parties for looking into the disputes with reasonability. On the other hand, this approach tends to penalize the parties for being unreasonable. Aside from that, it also wards off any bogus or inflated claim, if there is one. Inflated claims are quite common in construction arbitration in today’s times. Another benefit of this all-or-nothing approach is that it also removes any kind of concern regarding splitting the amount since the panel of arbitrators is authorized to award the sum requested by the party that prevails over the other at the end.

Baseball arbitration is also known to encourage the decision-makers of both parties to have a detailed look at the claim in the early stages. It often happens that the decision-makers don’t have the requisite information about the risks and benefits of the claim until the dispute is well past its initiation and the parties in question have already suffered substantial losses.

Limitations And Drawbacks

Though baseball arbitration is applied to both the Major League Baseball and the construction industry, there is a difference between the characters of the disputes. In construction disputes, a number of entities, other than the parties involved in arbitration, can put their own claims forward. Claims that are pass-through often pose problems since the presenting party participating in the arbitration might not be potent enough to modify or reduce the claim.

The attorneys too might have to face certain hurdles. To have the awarding decision in its own favor, a party has to furnish a more reasonable and practical claim than its opponent. Considering the claim’s nature, attorneys would have to inform their clients that the risk associated with producing an unsupported claim sum would affect the reward, albeit in a negative way.

Recommendations

Baseball arbitration is apt for the construction industry when two parties are directly involved and there is no involvement of any third party. As far as owners are concerned, baseball arbitration might prove to be cumbersome. But they might be in an advantageous position if the arbitration is with a designer or a team of designers, instead of general contractors as subcontractor claims can prove to be a hurdle. Overall fairness must always be encouraged and maintained.

The selective inclusion of baseball arbitration can be beneficial for the construction industry. In disputes involving two parties, the all-or-nothing approach drives the participating parties to put reasonable offers on the table.