Arbitration is a time-honored dispute resolution process, valued for being both faster than litigation, and private. It has long been the dispute resolution process of choice in the construction industry because it typically resolves disputes more quickly than litigation, allowing the construction to continue.

But arbitration may not always be a time- or money-saver. In a case unfolding in New Jersey, a developer of a hotel project was advised by its attorneys, the law firm Connell Foley LLP, to resolve its dispute with a contractor through arbitration. The developer alleges that the arbitration process was both lengthy and costly, and resulted in an unfavorable outcome. So now the developer is suing its lawyers for $40 million, alleging attorney malpractice for guiding the developer into arbitration.

Usually malpractice suits allege bad legal advice. Is the choice of a dispute resolution process legal advice? How does the developer prove that it would’ve been better off in litigation than in arbitration? It’s ironic that the choice to use arbitration has itself spawned more litigation.