Federation of Integrated Conflict Management

Standing Neutral

“The mere act of appointing a standing neutral is like a magic bullet for reducing or even eliminating disputes between parties to a contract”.

A standing neutral is a trusted, independent expert adviser (or a panel of three advisers) chosen by contracting parties to help resolve any disputes that arise between them during the contractual relationship.

This is typically used in the context of a business relationship where long-term cooperation is paramount, such as projects undertaken in the construction and oil industries. It is seen as a first response technique, designed to prevent any problems from escalating into adversarial disputes.

Contracting parties who have arranged for a standing neutral are incentivized to concentrate on fixing the problem rather than fixing the blame. They use their mutual knowledge to reach a solution between themselves, instead of relinquishing control to the neutral.