The interplay between binding arbitration and mechanic's lien rights has always created tension. Arbitration is a creature of contract. The parties to a construction contract mutually agree to resolve their disputes through binding arbitration in accordance with stipulated procedures. As a contractual right, however, the right to arbitrate can be waived through conduct inconsistent with the intent to resolve disputes through arbitration. This creates a conflict with mechanic's liens.

Lien rights are created by statute. They provide a judicial remedy. A mechanic's lien can be foreclosed only through a suit in a court of law. Isn't the assertion of a mechanic's lien inconsistent with, and a waiver of, the right to submit disputes to binding arbitration?

In one recent case, a contractor was allowed to file and perfect a mechanic's lien, preserving those rights, while simultaneously enforcing its arbitration rights. A Florida court ruled that while the underlying dispute - the amount owed the contractor - was to be determined through arbitration, the timely filed mechanic's lien could be used to secure the payment of any eventual arbitration award.

Other cases this week address a contractor's right to sue design professionals for delay damages and the ability of multiple claimants to reach a contractor's licensing bond. A federal appeals court said state law in Vermont was unclear on a contractor's right to recover delay damages from A/Es that were allegedly slow in providing and correcting design documents. And, a Washington court said a contractor's registration bond proceeds had to be divided pro rata between two claimants.