Expert Dispute Review Boards (DRB)

EXPERT DISPUTE REVIEW BOARDS (DRB)

Overview

Dispute Review Boards (DRB) typically are comprised of one or three experts whose role is to manage conflicts and disputes arising in long term, and large projects. DRB's can be a useful optional extra to the Project Planner. Usually, the DRB is established after the contract agreement date, or as soon as the project contractual work begins.

There are two basic responsibilities of the DRB Board: -

1. To be familiar with the project during execution, or construction. The process starts with the Board reviewing the project's plans and specifications, including periodic visits to the project site, where the Board member(s) view the work-in-process, meet with the owner(s) and contractors' on-site representatives and reviews progress, the work, and any potential issues to be flagged. The Board's role is useful in nipping-in-the-bud and preventing potential disputes from arising through normalising and formalising the contracting parties speaking and communicating clearly using a protocol with objectivity to state their positions in relation to the contract, the completion date and their individial responsibilities. The Board's role can be invaluable in dispute resolution because disputes can be solved before they escalate and threaten the life of the project..
   
   
2. The Board conducts hearings on any referred disputes at a meeting that is usually held on the project. The owner(s) and the contractors' representatives have firsthand-knowledge of the dispute issue(s) and there is an agreed process to give them the opportunity to present their case factually, present any relevant documentation reasons supporting their position. The formal recording of the arbitration including lawyer/solicitors being present is rare. Following the arbitration hearing the Board issues a written decision setting forth its investigation and gives an opinion. If a party or both parties reject the recommendation, then issue proceeds to a second stage of arbitration resolution under the terms of the agreement.

DRB's were first set up in the United States approximately 30 years ago and have to date been used on over some 900 projects, mainly they are used in public infrastructure construction. DRB's success rate is accredited as being 99%.

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DRB selection procedures

It is normal for the owner and the contractors to each nominate a member to the Board after each contracting party approves the other party's nominated person. Next, the two Board members must nominate a third member who must be approved by both the owner and the contractor. The parties can select the third member form the Expert Panel of Phoenix Legal arbitrators or accredited mediators.

The Board selection criteria includes 'experience' and "neutrality". Experience includes the technical and professional experience required to be able to solve potential conflict and to be able to facilitate positive outcomes, including experience with contract document, rise and fall, and variations etc.

Normally the guidelines require a fast board selection process that can be administered by Phoenix Legal, who provides the owner and the contractor with the names and background information on potential Board member candidates before the process is up and running. Any party's objections with reasons can submitted in writing, as a pre-hearing statement. At a Board sitting the claiming party can make its case on factual documentation as it sees the dispute. The responding party is then heard. The sequence is flexible and can be repeated until the issues have been fully aired before the Board. The Board can ask questions during the presentations or reserve questions until the presentations have been completed.

Usually the authorised owner's and contractor's representatives are required to attend the hearing. Usually, solicitors, lawyers and third-party consultants lack firsthand factual knowledge of the dispute. They may participate after giving sufficient prior notice, and subject to the Board's discretion.

The Board's written advice and recommendation(s) are normally given some two weeks after the hearing ends, unless otherwise agreed. Normally the Guidelines provide that the Board is not bound by court rules of evidence, or by the burden of proof standards. Notwithstanding, Boards quite often resort to these sources for guidance.

Three-Party Agreement

The Board's 3 members usually agree on the contract means for establishing the rights and responsibilities of the contracting parties and themselves as members of the Board. The board establishes its own work scope and develops its own operating procedures, routines and hearing procedures. The owner and the contractor have responsibilities to the Board are set out in the contract as a 3-Party Agreement. As an example the parties agree to provide the Board with plans and specifications, partial completion reports and other information on the project as sought buy the Board.

Each Board member's role is neutral and this is supported by contractual terms and provisions giving immunity and indemnification to each member. The head contract gives the Board members quasi-judicial immunity for their actions or decisions arising from their Board role in respect of hearings and the making of recommendations in respect to disputes.

Each contracting party normally share equally the fees and expenses in relation to the Board “joint and severally”.

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(*Asia Pacific Expertise for Conflict Resolution Institute of APEC University (www.apecuniversity.com))