FICM Construction Dispute Review Boards and Construction Settlement Panels Save You Time, Money, and Headaches.

It is virtually impossible to complete a large construction project (Project) without having any disputes develop between the Parties. Dispute Review Boards (DRB) can provide the processes and mechanisms to not only help to settle these disputes but also can provide a method to prevent the dispute from ever happening.

FICM Neutrals are best-in-class experts with a solid track record of neutrality and knack of resolving disputes in construction projects. Construction project owners find us their first choice for constituting a DRB for their projects. The following content below describes the working of CRB’s and their role. Please feel free to contact us for more information.

DRB – Constitution, Role and Responsibility.

Dispute Review Boards are made up of typically one or three experts who can assist in the management of conflicts and disputes in longer term and large projects. Typically, the DRB is established shortly after execution of the contract documents, as performance of work on the project begins.

A DRB has two basic responsibilities. The first is to become familiar with the project during construction. This process begins with the Board’s review of the plans and
specifications, followed by periodic visits to the project.

During these visits, in addition to viewing the work in progress, the DRB members meet with the owner’s and contractor’s staff at the job site to discuss the progress of the work, as well as potential issues on the horizon. These activities on the part of the DRB play a useful role in preventing disputes from arising because the parties are encouraged to clearly and objectively state their positions. They also provide the DRB with valuable background information should it need to hear a dispute.

The DRB’s second major responsibility is conducting hearings on any disputes referred to it. At a hearing, which usually is held at the construction site, owner and contractor representatives who have first-hand knowledge of the issues, are given the opportunity to present facts, documents, and the rationale in support of their respective positions. Formal recording of the hearing and participation by lawyers are both relatively rare.

Following the hearing the DRB issues a written recommendation or a decision, setting forth its analysis and opinion. If one or both parties elect to reject the recommendation, the issue proceeds to the next stage of dispute resolution under the terms of their agreement.

DRB Panel and Selection Procedures

Usually DRB Guidelines provide for the owner and the contractor to each nominate a member to the Panel. Each must approve the other’s nominee. Then the two part-appointed members of the DRB nominate the third member, who must also be approved by both the owner and the contractor. Unless the parties otherwise agree, the DRB members can be selected from the MCN’s lists of graded neutrals. The principal criteria for selecting the members of a DRB are experience and neutrality. Experience includes having the technical and professional background necessary to understand the disciplines involved in the construction contract. It includes experience with interpreting contract documents and resolving disputes.

Typical Guidelines for DRB’s call for a rapid selection process that can be administered by MCN. MCN will provide the owner and the contractor with the names and background information on potential DRB candidates once the process is set in motion. Each party’s contentions and supporting arguments are usually submitted in writing in a pre-hearing statement of position. Thus, at a DRB hearing the claiming party makes a presentation of the facts as it sees them, providing relevant exhibits and documents. This is followed by the presentation of the responding party. This sequence may be repeated several times until the issues have been fully to the DRB. The Panel may ask questions during the presentations or reserve questions until the presentations have been completed.

An authorised representative of each party is usually required at any hearing hearing. Lawyers and third-party consultants who lack firsthand factual knowledge of the dispute may usually participate only with prior notice, subject to the discretion of the DRB. The DRB’s written recommendation is due two weeks after the conclusion of the hearing, unless the parties otherwise agree. The Guidelines usually provide that the DRB is not bound by judicial forum rules of evidence or by the prevailing burden of proof standards, even though in practice DRBs frequently look to these sources for guidance.

Three-Party Agreement

A Three-Party Agreement is the usual contractual mechanism establishing the rights and responsibilities of the contracting parties and the members of the DRB. It details the “scope of work” for the Panel, which may develop its own routine operating and hearing procedures. The owner and contractor have responsibilities to the DRB, which are also set forth in the Three-Party Agreement. For example, the parties to provide the Panel with plans and specifications, periodic reports and other information about the project. The neutral role of DRB members is supported by provisions on immunity and indemnification. The contract gives DRB members quasi-judicial immunity for their actions or decisions associated with the hearing and making recommendations in respect to disputes.

Obligations with respect to compensation and expenses are contained in the Three-Party Agreement. The owner and contractor share equally the fees and expenses ( this could be changed to “joint and several liability” if required) of the Panel.