The following are excerpts from the presentation of William K. Slate II, president and CEO of the American Arbitration Association, at the International Congress of Private Dispute Resolution in Arbitration and Mediation in the Socio-Economic Context of the 21st century. The conference was held on Nov. 26, 2001, in Recife, Brazil.
The complexity of the construction industry cannot be overstated. No other field brings together people and entities of varying skills and professions including contractors, subcontractors, builders, engineers, architects, and other laborers who all interact—either directly or indirectly—with the owner. Because virtually every construction project depends on the participation of many people at varying stages, it is easy to envision how conflicts can arise.
Construction business professionals for some time have taken advantage of the benefits of ADR in creative ways. Arbitration has been a part of the American Institute of Architects’ (AIA) standard forms since the turn of the century. Once the American Arbitration Association was established in 1926, the AIA forms were revised to allow parties to arbitrate under the Association’s Commercial Arbitration Rules. The construction industry seemed to favor administered arbitration to the ad hoc approach as more effective and, soon after, it concluded that it would be better served if all cases were handled under AAA auspices and according to specialized industry rules.