Most building contract documents allow for disputes between parties to be resolved by adjudication and or arbitration. This should however be a last resort as the best way to resolve a dispute is a compromise by both parties.
Any formal dispute resolution is expensive and therefore should be a last resort. It is pointless for both parties to dig their heels in and not to compromise in any dispute. Arbitration costs will exceed R 10 000 per day and that does not include the use of legal counsel or specialists testifying for either party. It would be very unwise to resort to arbitration should the monetary value of the dispute be less than R 100 000. In disputes for small amounts mediation is an option if the parties cannot resolve the dispute themselves.
The Association has recently been asked to appoint an arbitrator in a dispute when the signed contract value of the entire contract is less than R 30 000. We cannot emphasis enough how much this is going to result in a lot of unhappiness on both parties once the arbitrator’s determination is received and the costs have to be paid.
Please think very carefully of the financial aspect of any dispute resolution and remember in most cases a bit of compromise is a lot cheaper in the long term.