Dispute Boards

Andrew,

Are DRB’s common place in the UK construction industry?

I notice most of the DRBF particpants are from the US.

Who usually makes up the DRB? Is it a collection of claims consultants and industry professionals?

If so, this is a good method of proactively managing disputes but does this practice not reduce the amount of claims work available, thus redifining the role of the claims consultant?

Oliver,

Not a great take up of DB’s in the UK although one is being used for the Olympics. Much bigger uptake abroad but the UK has adjudication which may explain the lack of them.

Usually it is industry professionals who make up the BD, often a three man panel - a good mixture of experience in quantum, time and law makes for a good DB. Lawyers may be appointed, but it is more normal for industry professionals who are well versed in one or more of the aforementioned skills.

A lawyer is useful on international contracts where the DB may be made up of people from different countries who may not be familiar with the local law.

Experience shows they are a very good way of managing disputes, their first aim is to help avoid disputes - many DB members are proud if at the end of a project they can say not a single dispute was referred to the board.

Do you think they will catch on though...

Usually the cost is split 50/50 between client and contractor.
I imagine the rates for the people on the DB are similar to that of consultants for arbitration/litigation purposes.

Does it not lead to extra expense for both?

On occasion they will save by not paying legal costs for large claims but, is the cost of DB’s longterm worth the amount that is saved during rare disputes?

Is it not comparable to when shops try to sell you a 2 year extended warranty for your TV?

Hi,

The rates are set by the Board itself. And it is divided between the parties as they see appropriate.

Usually, the issues are solved faster because they are experienced professionals that are selected by both parties because of their expert knowledge in the problem area.

Best,

Samer

I read that the DRB is normally paid around 0.05% of the contract sum.
I was interested to know how this compared to the cost of consultation during delay claims.

Dear Oliver,

The fees depend on the problem that they are solving. If there is not problem, there is no fee paid to the Board.

Usually you will select the seasoned professionals with previous knowledge in the problem area. The fee will be higher than the regular consultant fee.

Best,

Samer