Welcome to the DisputeBoard.law website. The purpose of the site is to promote the use of dispute boards around the world and explain their advantages.
Construction and Engineering projects are highly complex in terms of technical, logistical, and contractual issues as well as involving numerous interfaces with other interested parties such as employers, consultants, government agencies, banks and other contractors. The consequence is that differences of opinion and different agendas are a fact of life in the construction industry.
The construction industry has adopted various methods of resolving disputes in order to deal efficiently with disputes such as adjudication, dispute boards, mediation, arbitration and expert determination.
Dispute Boards are a truly innovative method of seeking to avoid disputes as they arise, to use the jargon “in real time”. The skill of a Dispute Board is to ensure that the parties to the contract are communicating with each other, addressing the allocation of risks and performance issues such that potential disputes evaporate.
If a dispute becomes necessary the dispute board is on hand, already versed in the project and able to decide any dispute. It is the speed with which the Dispute board reaches its decision that is the true benefit to the parties in this situation. Most parties prefer a quick decision so that they can move on with the project rather than a final determination that will take years to provide.
The Dispute Board’s decision or recommendation can become final and binding upon the parties and even if disputed by a party it is usually a contractual obligation that the parties have undertaken to comply with the decision at least until the end of the project.
The advantages of Dispute Boards are that they aim to preserve the parties’ relationship. Business relationships take many years to develop and require significant input at a senior level. The first casualty of any dispute is trust and the relationship between the parties. Once lost it is usually lost forever and the business consequences of this are enormous.
Good organisations recognise the need to preserve the relationship whilst also ensuring that the parties receive their proper entitlement. The Dispute Board offers the opportunity to achieve this aim.
A Dispute Board can work with the parties to avoid disputes and arbitration, whilst the project achieves an outcome that is acceptable to both parties. Arbitration and litigation are slow, expensive methods of achieving commercial goals and come with the risk that relationships will be shattered. Usually one party is severely weakened as a result of the outcome..
A question often posed is to prove the financial benefit of Dispute Boards. There is some data that having a Dispute Board reduces the incidence of disputes that go to litigation and arbitration and from this it is easy to calculate the saving by using a Dispute Board versus the party cost of arbitration or litigation. However, the real benefit to the parties is the relationship. What is that worth in your organisation?