Utilizing the NC Collaborative Law Act in construction industry disputes

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By Sheldon L. Schenck

Special to North Carolina Construction News

This article is a follow-up to the article published in August, 2020 titled Collaborative Law – A New Tool for Dispute Resolution in the Construction Industry. That article outlined the North Carolina General Assembly’s recent adoption of the Uniform Collaborative Law Act, which became effective on Oct. 1, 2020. As the previous article explained, the construction industry has for many years sought the most cost-effective and efficient tools for dispute resolution.

The Uniform Collaborative Law Act provides North Carolina construction participants with a third option for resolving disputes: arbitration, litigation, and now, collaboration. 

With its roots in family law, Collaborative Law is a non-adversarial dispute resolution process with promising success in other areas of the law. It has been described as a “structured, voluntary and non-adversarial approach to resolving disputes based upon cooperation between the parties, teamwork, full disclosure, honesty, integrity, respect, civility, and parity of costs.”  Collaborative Law: It’s Here and The Consensusdocs are, too, Construction Law Journal, Texas Construction Law Section Feb. 1, 2016. 

Collaborative Law’s focus on cost-effective and cooperative resolution to maintain good, working relationships between the parties leaves no shortage for application in the construction industry. Construction participants who prefer to approach disputes with these philosophies in mind can now begin to incorporate the collaborative process into their dispute-resolution toolbox. Industry professionals can accomplish this prior to a dispute arising by including in your construction or design contracts a provision requiring collaborative participation in the event of a dispute, similar to provisions that mandate the use of a dispute resolution board or some form of mediation upon the occurrence of a dispute. Collaborative Law may also be incorporated into other trade group contracts, including purchase orders, insurance, surety, or homeowners’ association agreements. 

It is not required that the participants have previously agreed to use Collaborative Law to proceed with the collaborative process. In fact, with the Collaborative Law Act having been recently enacted, it will be more likely for some time that the contract governing a dispute is devoid of any language concerning the use of the collaborative process. In such a case, it is appropriate to speak with your attorney about your option of proceeding with Collaborative Law as an alternative to litigation should a dispute become imminent.  

As discussed in the previous article, it is not uncommon for owner, designer, contractor, and subcontractor relationships to exist for years and move from project to project. When disputes arise, the collaborative process provides the opportunity to preserve these relationships that might otherwise be tarnished in the face of litigation or arbitration.  

Overall benefits of using Collaborative Law in the construction industry include:

  • Prompt, flexible, cost-effective dispute resolution compared to litigation and arbitration
  • Increased likelihood of preserving relationships
  • Complete privacy and confidentiality of the proceedings
  • Assurance that the attorneys involved will not exacerbate conflict for their own gain
  • Opportunity for clients to learn and improve their communication, negotiation, and problem-solving skills
  • Control over the outcome lying in the hands of the parties themselves, i.e., there is no judge, jury, or arbitrator dictating the end result. 
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Sheldon L. Schenck

For a list of attorneys already trained in Collaborative Law, to take Collaborative Law training, to join the NCCCLA, and for more information on the collaborative process, please visit www.nccivilcollaborativelaw.org

Ms. Sheldon L. Schenck is an associate at Conner Gwyn Schenck in Raleigh, phone (919) 789-9242 or email sschenck@cgspllc.com.

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