Due to the high cost of litigation and its tendency to drag on, contractors are showing an increased interest in using arbitration to resolve disputes, especially those involving smaller settlements. Arbitration is a private proceeding in which parties present their cases to an arbitrator or a panel of arbitrators—impartial third-persons picked and paid by the parties to resolve the dispute. For a contractor, being able to choose the arbitrator can be a big advantage, especially if the arbitrator has expertise in construction—something that most judges lack.

Arbitration is conducted much like a trial, except that arbitrators are not bound by the formal rules of law. For instance, evidence that may be excluded in a trial based on a rule of law could be admissible in an arbitration. If you decide to arbitrate, you can improve your chances of winning by being an effective witness. Here are some basic rules to follow when it's time for you to present your case.