REALWorld Law


Alternative Dispute Resolution Procedure (ADR)

Is it common for construction disputes to be referred to ADR – such as adjudication, determination by an expert, mediation or conciliation? Is a form of ADR required by law, perhaps as a mandatory first step in the dispute resolution procedure?

United States

United States

Disputes generally are resolved by litigation unless the parties mutually agree upon an alternative method to resolve the dispute, which might include mediation, arbitration, or a combination of methods. However, even if a party commences litigation, a judge may require the parties to enter into mediation in an attempt to resolve the dispute without further litigation. In such case, the parties would return to court and pursue resolution of the dispute via litigation only if the mediation is unsuccessful and the parties fail to reach a consensus. While not altogether uncommon, such requirement by a judge for mediation as a condition precedent to further litigation in court is the exception rather than the rule. It likely is more often used in family court than in resolving construction disputes, although each state has varying requirements.

A recent trend in some US states is to require a form of mandatory ADR as part of a state’s construction law reform, but these requirements generally relate to disputes involving residential/condominium construction. Otherwise, there generally has been no mandatory alternative dispute resolution method required by law as a first step in the dispute resolution procedure. Parties mutually may agree to submit to mediation prior to arbitration or litigation, but this has been voluntary on the part of the parties, not a legal requirement. However, the AIA construction contracts (see industry forms of agreement), without revision, provide for mandatory mediation as a prerequisite to engaging in binding dispute resolution, such as litigation or binding arbitration.