Dispute board

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A dispute board, dispute review board (DRB) or dispute adjudication board (DAB) is a forum for dispute resolution, typically comprising three independent and impartial persons selected by the contracting parties. The significant difference between Dispute Review Boards and most other Alternate Dispute Review techniques (and possibly the reason why or Dispute Review Boards have had such success in recent years) is that the Dispute Review Board is appointed at the commencement of a project before any disputes arise and, by undertaking regular visits to the site, is actively involved throughout the project (and possibly any agreed period thereafter). [1]

Contents

A Dispute Board becomes a part of the project administration and thereby can influence, during the contract period, the performance of the contracting parties. It has 'real-time' value. The idea behind a standing Dispute Resolution Board is that it may be called upon early in the evolution of any dispute which cannot be resolved by the parties and be asked to publish decisions or recommendations on how the matters in issue should be settled. It is usual (but not compulsory) that an opportunity remains for the matter to be referred to arbitration or to the courts if the Dispute Review Board's decision does not find acceptance by the parties. Thus a Dispute Resolution Board may be likened to the United Kingdom's adjudication process, either under statutory-compliant contracts or under the regime established by statute itself . What a Dispute Review Board does that United Kingdom statutory adjudication does not do is to provide a regular and continuing forum for discussion of difficult or contentious matters, to identify ways forward by acting in an informal capacity and to create valuable opportunities for the parties to avoid disputes by keeping proactive communication alive. Another aspect, which is less often discussed, is that by establishing a Dispute Board from the inception of the project the Dispute Board members become part of the project team and are thought of in a different fashion and because of their "hands on" approach can be trusted to be fair and impartial and their advice respected and taken more readily than would a third party or stranger to the project.

The terms Dispute Board or Dispute Review Board are generic terms and include (a) the Dispute Review Board (DRB) which is a device that originated in the USA and provides non-binding recommendations); (b) the Dispute Adjudication Board (DAB) which is a device emerging from the earlier USA model, but which provides a decision that has interim-binding force); and (c) the Combined Dispute Board (CDB), which is a hybrid of Dispute Review Boards and Dispute Adjudication Boards which was created by the International Chamber of Commerce in 2004. Various other terms have been used such as Dispute Settlement Panel, Dispute Mediation Board, Dispute Avoidance Panel and Dispute Conciliation Panel. Fundamentally these different varieties of Dispute Review devices are the same, each providing early adjudication based on the contractual bargain between the parties.

A Dispute Review Board is a creature of contract; the parties establish and empower a Dispute Review Board with jurisdiction to hear and advise on the resolution of disputes. Within the United Kingdom it is entirely possible for the contracting parties to establish a Dispute Review Board to adjudicate construction contract disputes within the statutory requirement for adjudication . As yet, there are no statutory requirements for Dispute Review Boards to be established to adjudicate disputes under construction contracts.

While the origins of Dispute Review Boards are found in the construction industry, their ambit is far wider than construction and Dispute Review Boards are now found in the financial services industry, the maritime industry, long-term concession projects, operational and maintenance contracts. The scope for Dispute Review Boards has been described as substantial. [2] The emergence of the International Chamber of Commerce as an active supporter of Dispute Boards, [3] as well as the Dispute Board Federation and the Dispute Resolution Board Foundation, makes it highly probable that dispute boards will be established in a range of industries that, until now, have not used adjudication to any great extent.

Cost savings

Some studies have shown that the cost of a Dispute Board will result in even the most strenuous dispute being resolved and with an almost 99% success rate of dispute resolution without the need for either costly litigation or arbitration the savings are enormous. [4] The reason this is significant is because the construction industry has a reputation for disputes and conflict. Anecdotal evidence from Australia, for example, indicates that 50% of all legal cost associated with construction is expended in connection with disputes. In almost 10% of projects, between 8% and 10% of the total project cost was legal cost. Not surprisingly, these projects have a high incidence of disputes. This expenditure, which globally represents an enormous sum each year, does not begin to take into account the hidden costs of disputes; the damage to reputations and commercial relationships, the cost of time spent by executive personnel, and the cost of lost opportunities. The situation is aggravated by the increased use of joint ventures both in consulting and in contracting. Such organisations are less autonomous and perhaps less able to negotiate settlements of their contractual problems.

ICC Rules

The International Chamber of Commerce recommends inclusion of a dispute review board clause in a major contract and provides a set of rules which can be used to ensure boards can operate in a predictable manner in avoiding or resolving disagreements. [5]

Related Research Articles

Arbitration, in the context of the law of the United States, is a form of alternative dispute resolution. Specifically, arbitration is an alternative to litigation through which the parties to a dispute agree to submit their respective evidence and legal arguments to a neutral third party for resolution. In practice arbitration is generally used as a substitute for litigation, particularly when the judicial process is perceived as too slow, expensive or biased. In some contexts, an arbitrator may be described as an umpire.

Mediation is a structured, interactive process where an impartial third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. All participants in mediation are encouraged to actively participate in the process. Mediation is a "party-centered" process in that it is focused primarily upon the needs, rights, and interests of the parties. The mediator uses a wide variety of techniques to guide the process in a constructive direction and to help the parties find their optimal solution. A mediator is facilitative in that she/he manages the interaction between parties and facilitates open communication. Mediation is also evaluative in that the mediator analyzes issues and relevant norms ("reality-testing"), while refraining from providing prescriptive advice to the parties.

Adjudication is the legal process by which an arbiter or judge reviews evidence and argumentation, including legal reasoning set forth by opposing parties or litigants, to come to a decision which determines rights and obligations between the parties involved.

International Chamber of Commerce Business organization

The International Chamber of Commerce is the largest, most representative business organization in the world. Its over 45 million members in over 100 countries have interests spanning every sector of private enterprise.

Online dispute resolution (ODR) is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties. It primarily involves negotiation, mediation or arbitration, or a combination of all three. In this respect it is often seen as being the online equivalent of alternative dispute resolution (ADR). However, ODR can also augment these traditional means of resolving disputes by applying innovative techniques and online technologies to the process.

Federal Mediation and Conciliation Service (United States) Independent agency central to labor dispute resolution

The Federal Mediation and Conciliation Service (FMCS), founded in 1947, is an independent agency of the United States government, and the nation's largest public agency for dispute resolution and conflict management, providing mediation services and related conflict prevention and resolution services in the private, public, and federal sectors. FMCS is tasked with mediating labor disputes around the country; it provides training and relationship development programs for management and unions as part of its role in promoting labor-management peace and cooperation. The Agency also provides mediation, conflict prevention, and conflict management services outside the labor context for federal agencies and the programs they operate. The FMCS headquarters is located in Washington, D.C. with other offices across the country.

The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors and States. ICSID is part of and funded by the World Bank Group, headquartered in Washington, D.C., in the United States. It is an autonomous, multilateral specialized institution to encourage international flow of investment and mitigate non-commercial risks by a treaty drafted by the International Bank for Reconstruction and Development's executive directors and signed by member countries. As of May 2016, 153 contracting member states agreed to enforce and uphold arbitral awards in accordance with the ICSID Convention.

Federal Arbitration Act United States legal statute

The United States Arbitration Act, more commonly referred to as the Federal Arbitration Act or FAA, is an act of Congress that provides for judicial facilitation of private dispute resolution through arbitration. It applies in both state courts and federal courts, as was held in Southland Corp. v. Keating. It applies in all contracts, except contracts of seamen, railroad employees, or any other class of workers involved in foreign or interstate commerce, and it is predicated on an exercise of the Commerce Clause powers granted to Congress in the U.S. Constitution.

Trial Coming together of parties to a dispute, to present information in a tribunal

In law, a trial is a coming together of parties to a dispute, to present information in a tribunal, a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. The tribunal, which may occur before a judge, jury, or other designated trier of fact, aims to achieve a resolution to their dispute.

International arbitration is arbitration between companies or individuals in different states, usually by including a provision for future disputes in a contract.

Arbitration Method of dispute resolution

Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the judiciary courts. The dispute will be decided by one or more persons, which renders the 'arbitration award'. An arbitration decision or award is legally binding on both sides and enforceable in the courts, unless all parties stipulate that the arbitration process and decision are non-binding.

Arbitral tribunal Panel convened to resolve a dispute by way of arbitration

An arbitral tribunal or arbitration tribunal, also arbitration commission, arbitration committee or arbitration council is a panel of unbiased adjudicators which is convened and sits to resolve a dispute by way of arbitration. The tribunal may consist of a sole arbitrator, or there may be two or more arbitrators, which might include a chairperson or an umpire. Members selected to serve on an arbitration panel are typically professionals with expertise in both law and in friendly dispute resolution (mediation). Some scholars have suggested that the ideal composition of an arbitration commission should include at least also one professional in the field of the disputed situation, in cases that involve questions of asset or damages valuation for instance an economist.

Construction law is a branch of law that deals with matters relating to building construction, engineering, and related fields. It is in essence an amalgam of contract law, commercial law, planning law, employment law and tort. Construction law covers a wide range of legal issues including contract, negligence, bonds and bonding, guarantees and sureties, liens and other security interests, tendering, construction claims, and related consultancy contracts. Construction law affects many participants in the construction industry, including financial institutions, surveyors, quantity surveyors, architects, builders, engineers, construction workers, and planners.

Alternative dispute resolution (ADR), or external dispute resolution (EDR), typically denotes a wide range of dispute resolution processes and techniques that parties can use to settle disputes, with the help of a third party. They are used for disagreeing parties who cannot come to an agreement short of litigation. However, ADR is also increasingly being adopted as a tool to help settle disputes alongside the court system itself.

Ombudsmen in Australia are independent agencies who assist when a dispute arises between individuals and industry bodies or government agencies. Government ombudsman services are free to the public, like many other ombudsman and dispute resolution services, and are a means of resolving disputes outside of the court systems. Australia has an ombudsman assigned for each state; as well as an ombudsman for the Commonwealth of Australia. As laws differ between states just one process, or policy, cannot be used across the Commonwealth. All government bodies are within the jurisdiction of the ombudsman.

The New Engineering Contract (NEC), or NEC Engineering and Construction Contract, is a formalised system created by the UK Institution of Civil Engineers that guides the drafting of documents on civil engineering, construction and maintenance projects for the purpose of obtaining tenders, awarding and administering contracts. As such they legally define the responsibilities and duties of Employers and Contractors in the Works Information. The contract consists of two key parts: the Contract Data part one and Contract Data part two. Several approaches are included making it a family of options. The NEC contract is widely used in both the UK and Hong Kong. There have been attempts, largely unsuccessful, at introducing the NEC contract into both Australia and New Zealand from at least 1994 - despite some unfounded claims to the contrary as off 2022 this form of contract remains relatively obscure within both countries.

United States v. Utah Construction & Mining Company, 384 U.S. 394 (1966), is a United States Supreme Court case in which the Court held that "(w)hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose." Utah Construction established a two-part test to determine whether res judicata effect should be given to an administrative determination. First, the agency proceeding must be examined to determine whether the agency was "acting in a judicial capacity" and whether the parties had "an adequate opportunity to litigate" the issues before the agency. Second, the general rules of res judicata must be applied to the case. Not all administrative adjudications, and not all judicial determinations, are entitled to res judicata effect. For the principles of res judicata to apply, administrative determinations, like court judgments, must be valid, final and on the merits.

The Nova Scotia Human Rights Commission was established in Nova Scotia, Canada in 1967 to administer the Nova Scotia Human Rights Act. The Nova Scotia Human Rights Commission is the first commission in Canada to engage a restorative dispute resolution process.

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), is a United States Supreme Court decision concerning arbitration of antitrust claims. The Court heard the case on appeal from the United States Court of Appeals for the First Circuit, which had ruled that the arbitration clause in a Puerto Rican car dealer's franchise agreement was broad enough to reach its antitrust claim. By a 5–3 margin it upheld the lower court, requiring that the dealer arbitrate its claim before a panel in Tokyo, as stipulated in the contract.

Charles C. Adams Jr. American diplomat

Charles C. Adams Jr. is the former United States Ambassador to Finland.

References

  1. "Chern on Dispute Boards", third edition - Informa Law from Routledge, 2015 (www.routledge.com/books/details/9781138781733/)
  2. Gould, J. (2015), An Overview of the CIArb Dispute Board Rules, paper given on 1 July 2015 at the 7th Annual IBC Construction Law: Contracts and Disputes conference in London, Fenwick Elliott, accessed 23 December 2020
  3. International Chamber of Commerce, Dispute Boards, accessed 23 December 2020
  4. The Dispute Board Federation (Geneva) International Survey, 2008
  5. International Chamber of Commernce, Dispute Board Rules, in force as of 1 October 2015, accessed 23 December 2020