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Dispute Boards

Dispute Boards. “ Outside the Box ” Conference Straus Institute for Dispute Resolution Pepperdine University April 7, 2011 Bill Baker Kurt Dettman. Dispute Resolution Board Foundation. Nonprofit corporation Formed in 1996 to promote the use of DRBs worldwide

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Dispute Boards

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  1. Dispute Boards “Outside the Box” Conference Straus Institute for Dispute Resolution Pepperdine University April 7, 2011 Bill Baker Kurt Dettman

  2. Dispute Resolution Board Foundation • Nonprofit corporation • Formed in 1996 to promote the use of DRBs worldwide • Over 700 members from more than 59 countries • www.drb.org

  3. What is a DRB? A Dispute Review Board (DRB) is a board of impartial professionals formed at the beginning of the project to follow construction progress, encourage dispute avoidance, and assist in the resolution of disputes for the duration of the project. 5

  4. Low Cost Resolution High Cost Resolution Unassisted Negotiations Structured Negotiations Partnering Facilitation Conciliation Early Neutral Evaluation Joint Experts Expert Determination Less ControlMore Control Dispute Review Board Mediation Mini-Trial Arbitration Litigation Court Special Master Court Settlement Conference Bench Trial Jury Trial ADR Continuum

  5. Application to Types of Construction Public and Private Projects • Airports • Bridges • Buildings • Dams • Energy projects • Highways • Ports • Power plants • Underground • Universities

  6. What is a DRB? • Organized before construction begins • Typically 3 members with one member serving as Chair • Parties ensure that all members of the DRB are • Impartial • Experienced in the work of the contract

  7. How Does a DRB Work? • Each member is provided with copies of the contract documents and regular updates • Each member becomes familiar with the • Project and issues/challenges • Parties to the contract and other participants in the project • Joint meeting during regular site visits

  8. How Does a DRB Work? • Encourages resolution of disputes at job level • Identify and discuss issues before they become disputes • Advisory Opinions can be provided if both parties request • Hold full hearings, if necessary, and provide written recommendations

  9. Recommended Elements for a Successful DRB • All DRB members are: • Impartial • Subject to approval of both parties • DRB and parties sign a 3-party agreement obligating them to serve both parties impartially

  10. Recommended Elements for a Successful DRB • The fees and expenses of the DRB members are shared equally by the parties • The DRB is organized before the work begins, BEFORE there are any disputes

  11. Recommended Elements for a Successful DRB • The DRB keeps abreast of job developments through: • Regular progress updates • Regular site visits and meetings • Either party can refer a dispute to the DRB for a full hearing • An informal but comprehensive hearing is convened promptly

  12. Recommended Elements for a Successful DRB • The written recommendations of the DRB are non-binding, but to the extent permitted by law are admissible in later proceedings • The DRB members are absolved from any personal or professional liability arising from their DRB activities and cannot be called as witnesses

  13. Costs of DRBs • Direct cost ranges from 0.06-0.30% of final construction contract amount, shared equally between the parties • $1000 to $2500 per day per member • Travel time to meetings and expenses • Progress review between DRB meetings • DRB deliberations and report preparation following a full hearing

  14. Cost $avings • Cost savings for the project and the parties: • Reduces transactional costs (legal and consultant fees) • Reduces project resource costs

  15. DRB Take Aways The Presence of a DRB: • Focuses on early identification and evaluation of disputes • Encourages parties to use negotiation and informal procedures • Provides prompt, “real time” resolution by knowledgeable industry professionals • Keeps dispute resolution at the project level

  16. DRB Take Aways The Presence of a DRB also: • Establishes positive relationships • Promotes open communications • Facilitates understanding, trust and cooperation • Reinforces partnering

  17. DRBF Statistical Database 1975 - 2010 Number of completed projects: Over 2,200 Total construction value: Over $200 Billion Resolution Rate: Over 98%

  18. Dispute Resolution Board Foundation 19550 International Blvd., Suite 314Seattle, WA 981881-206-878-3336Toll free (USA only) 1-888-523-5208Fax 1-206-878-3338 Email: home@drb.orgWebsite: www.drb.org

  19. Questions?

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