The reason why formal litigation in green construction is relatively rare.
Green, or more precisely, sustainable construction, has for a number of years accounted for an increasing amount of the construction market both in terms of project starts and money invested.
One would think this increase would have resulted in a comparable increase in lawsuits related to green building. This has not been the case.
Stuart Kaplow, in an article in Green Building Law Update, notes that disputes arising from green construction practices are increasing dramatically. “In absolute numbers there are more green building claims this year than last and more last year than the year before. And the dollar amount of these claims is increasing … Make no mistake claims are being paid including profits being disgorged by designers, construction companies, and materialmen.”
According to Mr. Kaplow, the dichotomy between the number of claims filed and the number of lawsuits results from the fact that a disproportionate number of the contracts for green construction require arbitration.
Why do parties to green building contracts prefer arbitration? Mr. Kaplow provides one answer.
“Arbitration can be useful in some matters of green building for a variety of reasons including that experienced green building arbitrators may be better suited to rule on complex construction disputes rather than layperson judges and juries, and that arbitration is a faster and more cost effective dispute resolution process.”
Mr. Kaplow closes his article with the following advice—
There are sometimes valid legal reasons to litigate rather than arbitrate. That’s a discussion for your company and its attorneys. If an arbitration clause is included in your contract, examine it carefully. Boilerplate clause may not specify what is best for your company.
Arbitration is Why There is So Little Litigation in Green Building, Stuart Kaplow, Green Building Law Update, Nov. 5, 2017.