Dispute Resolution Boards (DRB) have been around since the 1980s under many different names, including Dispute Review Boards, Dispute Boards, and Dispute Adjudication Boards. DRBs are a real-time process that is unique to the construction industry. They avoid many of the trappings of litigation by eliminating discovery, cross examination, rules of evidence, direct participation by lawyers, and decisions by non-experts. They have both a dispute resolution and dispute avoidance function.
The Dispute Review Board Foundation (DRBF) is the premier body for education, procedures, and critical thought relating to DRBs. However, the DRBF does not administer DRBs. Typically, DRBs are administered by the owner. That may work when all runs well but may not when the parties are at odds.
The American Arbitration Association and the International Centre for Dispute Resolution (AAA-ICDR) have developed new rules and procedures for the administration of DRBs. In doing so, AAA-ICDR focused on the dispute avoidance aspects of the process, thus, the name Dispute Avoidance and Resolution Boards (DARB).
AAA-ICDR’s function in the DARB process is very similar to what it does in arbitrations. It establishes and enforces the DARB rules, provides a roster of neutrals, assists in the selection of Board members, makes decisions regarding disqualification or replacement of Board members, implements the schedule, handles billing and commercial issues, and performs other administrative functions. For this it charges $75 per hour of time billed by the Board Chair.
Selection of DARB Members
One of the most important attributes of a DRB/DARB is the composition of the Board. For the Board to be effective, Board members must be neutral experts in construction who both parties trust and respect. To achieve this objective, the starting point for selection of Board members under the AAA-ICDR Rules is a mutual effort to agree on all three Board members using the AAA-ICDR roster. Since selection occurs at the start of the construction project, when the parties are in the honeymoon stage, the parties typically can agree on the Board members. If the parties can’t agree, the rules require that the Board be composed of one member nominated by the owner and approved by the contractor, one member nominated by the contractor and approved by the owner, and a third member nominated by the first two members and approved by both the owner and the contractor. The key is that both parties must approve all DARB members. Finally, if the parties reach a stalemate in the selection process, the AAA-ICDR selects the members without the submission of additional
Challenges to a Board member’s continued service is determined by the AAA-ICDR. In addition, when vacancies arise due to disqualification, resignation, inability to continue, or other reason, the AAA-ICDR may declare the office vacant. The Board member will be replaced using the same procedures as specified for the original memberThe replacement process is important because Board members are appointed for the life of the project, not just individual disputes.
Periodic Site Visits
The primary characteristic that distinguishes DRBs/DARBs from other forms of construction ADR is that, regardless of whether there are any disputes, the Board meets with the parties at the jobsite periodically, typically four times a year, to discuss the status of the work, schedule, payment and other commercial issues, and potential disputes. The Board and parties then visit the worksite to observe the status of construction and potential areas of
These periodic site visits have a major dispute avoidance function. The regular, informal, and calm discussion of potential disputes, normally will spur the parties to work on resolving their disputes before the next meeting. Seldom do the parties want to show up at the next meeting with the Board without having made progress on resolution of the disputes. In addition, the opportunity to build a relationship with the jobsite personnel and observe the work on the periodic site visits puts the Board in a much better position to decide disputes if any are presented to them.