Florida Arbitration Program for Construction Defect Claims Commences

December 23, 2009

A new arbitration program in Florida specifically designed to resolve inter-insurer disputes over construction defect claims commenced with its recently conducted first hearing.

The new program is a joint project undertaken by Arbitration Forums Inc. (AF) and the Construction Defects Claim Managers Association (CDCMA).

This new service addresses the insurers concerns that a program tailored to the needs of construction defect disputes should include both the right process and the right people, according to W. Russ Smith, president and CEO of Tampa-based AF.
As permitted under the program’s rules, two companies had representatives at the first hearing to assure that the arbitrators had the proper understanding of issues in dispute and their supporting evidence.

The new construction defects program requires arbitrators to be highly knowledgeable of general liability and construction defect claims, general insurance coverage, and applicable case law as well as possess a working knowledge of construction practices and nomenclature.

These arbitrators also must have a thorough understanding of the triggers of insurance coverage, exhaustion theories, and allocation methods as well as the ability to analyze and apply contractual risk transfer clauses.

Moreover, arbitrators of construction defect cases must be neutral, open minded and impartial and capable of writing clear, concise and well-reasoned decisions, Smith said.

Source: Arbitration Forums Inc.

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