Until the 1970s, the construction industry tended to settle disputes the old-fashioned way—in court. Reliance on litigation began to erode in the 1970s when court dockets became backlogged with a growing number of cases, and the cost of litigation increased dramatically. In the 1980s, the U.S. Supreme Court issued a series of pro-arbitration rulings that encouraged commercial parties to allow for the arbitration of disputes in their agreements. The construction industry has been in the vanguard of many types of alternative dispute options over the years—arbitration, mediation, partnering, and dispute review boards among them.

 

 

Litigation remains the benchmark for resolving conflict in the construction industry. It is still considered the most powerful option, though not used as broadly as in the past. One contractor felt that “The percentage of routine construction projects going to litigation is more like one in 20 today. With major construction projects, it’s more like one in eight to 10, nothing like the one in three of a decade ago.”