Disputes in construction are inevitable. Delays, defects, payment disagreements, and scope changes can all lead to broken contracts and finger-pointing. When those issues escalate beyond negotiation, parties are faced with a critical choice: pursue arbitration or take the matter to court. While both options offer a legal path to resolution, they differ in time, cost, procedure, and privacy.
Choosing the right forum isn’t just a legal decision—it’s a strategic one. Contractors, owners, and developers need to weigh the complexity of the case, the desired outcome, and how much control they want over the process. Each method offers advantages and trade-offs. Understanding the distinctions can help you select the route that best protects your interests, especially with guidance from a seasoned Houston construction claim and disputes attorney.
Understanding Arbitration in Construction Disputes
Arbitration is a private dispute resolution process where a neutral third party (the arbitrator) makes a binding decision after hearing both sides. The process resembles a trial in some ways but is typically faster and less formal. Parties often choose arbitration when they want to avoid drawn-out litigation and prefer a more streamlined process.
Many construction contracts in Texas include arbitration clauses, meaning both sides have already agreed to this method in advance. This pre-selection can eliminate forum shopping and reduce unpredictability. However, it also limits your ability to opt for litigation later, even if it turns out that a court process might have been more favorable.
The Traditional Route: Litigation in Civil Court
Litigation involves filing a lawsuit in court and proceeding through pleadings, discovery, motion practice, and ultimately, trial. It offers full access to legal procedures, including depositions, subpoenas, and appeals. For disputes involving complex fact patterns or high-dollar claims, the court system can provide a more robust structure for resolution.
However, litigation is often slower and more expensive than arbitration. Courts are overloaded, procedural requirements can delay hearings for months, and legal costs can escalate quickly. Still, if your dispute hinges on legal precedent or you need the ability to appeal, litigation may offer advantages that arbitration cannot match.
Time and Cost: Which Method Moves Faster?
Arbitration is generally quicker than litigation. Most arbitration cases are resolved in months, while court proceedings can take years, especially if there are appeals. Arbitration also avoids many of the procedural delays and continuances common in court.
In terms of cost, arbitration can be a double-edged sword. While it often results in lower attorney fees due to faster resolution, the parties must pay for the arbitrator’s time and administrative fees. These costs can be substantial, especially in large disputes, and are not a factor in court cases where judges are publicly funded.
Confidentiality and Public Record
One of arbitration’s biggest advantages is privacy. Hearings are confidential, and outcomes are not part of the public record. This can be important for businesses that want to protect proprietary information or avoid negative publicity tied to construction problems.
Litigation, by contrast, is a matter of public record. Court documents, filings, and judgments are accessible to anyone. While this transparency promotes accountability, it also means sensitive business issues may become part of the legal record, which can have reputational consequences.
The Role of the Decision-Maker
In arbitration, the arbitrator is typically an expert in construction law or even a retired judge. This can be a benefit, as complex technical details are more likely to be understood and weighted appropriately. However, the arbitrator’s decision is almost always final, with very limited grounds for appeal.
In litigation, judges oversee proceedings, and juries may be involved in deciding factual issues. While this opens the door for broader perspectives, it also introduces variability. A jury unfamiliar with construction practices may misinterpret technical testimony, and judicial rulings may be subject to appeal, prolonging the process.
Discovery and Evidence Rules
Discovery—the process of gathering evidence—is far more limited in arbitration. Parties may agree to restrict the number of depositions, document requests, or expert reports. This keeps costs down and expedites resolution, but can also prevent a party from fully developing their case.
Litigation allows for extensive discovery, giving both sides the tools to uncover every relevant detail. While this is a benefit in complex disputes, it also drives up expenses and may drag out the case. Parties must decide whether comprehensive discovery is a necessity or a burden in their situation.
Enforceability of Awards and Judgments
Both arbitration awards and court judgments are enforceable under Texas law. However, arbitration decisions are more difficult to overturn. Unless there is clear evidence of fraud, bias, or misconduct, arbitration outcomes stand as final.
Litigation offers more pathways for appeal or review. If the trial court makes an error of law, the losing party can often seek reversal or modification from a higher court. This layer of oversight can be a safety net for parties concerned about procedural fairness or unexpected outcomes.
Which Option Is Right for You?
The best dispute resolution method depends on your priorities. Arbitration is faster, private, and often more efficient—but comes with higher upfront costs and little room for appeal. Litigation is slower and more public but offers procedural depth and multiple opportunities for review.
Before choosing a path, review your contract. If an arbitration clause is present, you may be bound to that forum unless both parties agree otherwise. And whether you’re heading into arbitration or litigation, having experienced legal counsel is key to navigating either process effectively.