Disputes Review Boards | Avoid Claims and Litigation

John is a Charter Member of the Disputes Resolution Board Foundation and has been active in the mediation of major issues for complex infrastructure and underground construction projects for several decades.

Planning, design and construction of major, urban infrastructure and underground projects has become increasingly more complex and conflictual. Owners and their engineers are reacting with detailed contract specifications, attempting to reallocate risk and sometimes define “means and methods” – which are best left to the contractor. Contractors, in defense, react with exceptions to the terms and conditions and prepare for claims and litigation.

Disputes, claims and litigation therefore become more likely as parties to the contracts use legalistic maneuvering in an attempt to limit cost, deal with schedule issues and control risk for imperfectly structured contracts.

Complex contracts increase the opportunity for disputes, claims and litigation. But, neither owners nor contractors want litigation. Consequently, most contracts have provisions for resolution of disputes by some other means – such as negotiation, mediation or arbitration.

Control is reduced, risks increase, schedule slips and costs rise dramatically as the parties move from dispute to claim and then through negotiation, mediation, arbitration and finally to litigation, as illustrated in the chart.

There is a better way – which can prevent projects moving from dispute to litigation. Alliancing, Partnering and pre-construction team “alignment” methods, together with the use of Dispute Review Boards, can create better working relationships, deal with issues early and resolve differences when it is relatively easy – thus reducing the possibility of claims and litigation. See “Partnering and Team Building.”

Dispute Review Boards (DRBs) are one measure, used to resolve disputes quickly so that they do not lead to claims and litigation. John Reilly is a Charter member of the Disputes Review Board Foundation and recommends use of early conflict avoidance and resolution techniques – such as partnering and dispute resolution – in all complex infrastructure and underground projects.

Specifics. DRBs can help projects avoid some disputes which would otherwise lead to claims and litigation. DRBs usually consist of three senior professionals, experienced in management, construction and contracting, selected jointly by the owner and the contractor. They regularly review project progress and details of construction and are kept informed of issues and potential problems.

Specifics. may occur on any contract between the owner, or the owners representatives, and the contractor. These disagreements may eventually lead to disputes which are referred by either party to the DRB for review, analysis and recommendation.

Specifics. of disagreements, followed by a wise recommendation by an impartial DRB, has the potential to resolve issues and disputes quickly, to maintain good communications and working relationships and to “clear the air” – all of which help both owner and contractor meet cost, schedule and quality goals.

Part of management DRBs are a management resource and should be used in conjunction with other management processes as described in Management Systems, Contractual Systems, Partnering, Teambuilding and Risk Reduction.

A caution The DRB process is not fully accepted by some owners and some have modified the selection process for DRB members. There is some discussion about this in the industry and the specifics of a particular project and contractual environment need to be carefully considered. The experience of some owners should be reviewed when decisions are being made on the make-up and use of DRBs.

For specifics about Dispute Resolution – or if you have a project that would benefit from this work – please Contact John at the address below.