PREVENTION IS BETTER THAN A CURE: USE OF DISPUTE BOARDS ON THE RISE

Construction projects are traditionally bedevilled by disputes. The multitude of parties, the large scale of the workforce, the complexity of technical specifications, and the exposure to risks outside the control of the parties (such as weather induced delay), are all factors contributing to disputes in major projects. A ‘zero-sum’ approach is structurally enshrined in many construction contracts, as owners gain from lowest-cost completion and contractors seek to maximise revenue and profits. In this context, Dispute Boards (DBs) and their several sub-species have proven to be a useful and cost-effective method not only for resolving live disputes as they arise, but more importantly, for avoiding them altogether.

The Dispute Board concept

With their roots in the United States’ construction industry, DBs consist of a panel of neutral third-party experts that is assembled at the commencement of a project. The panel has a general mandate to assist the parties in resolving and avoiding disputes that may occur throughout the course of the project. The panel will usually consist of three members, although for smaller projects, a single expert can be used to reduce costs. For construction projects, the board members should have the relevant experience in navigating the various technical or legal issues that tend to arise. It is common, and advisable, that DBs draw upon the skills of both lawyers and experienced industry professionals to deliver the most satisfactory results.

Apr-Jun 2014 issue

Clayton Utz