Dispute resolution boards (DRBs)—sometimes also referred to as dispute review boards—have been shown to significantly reduce claims and disputes on construction projects, resulting in greater cost savings for all of the stakeholders.
A DRB is a panel of impartial, specifically-trained professionals formed at the beginning of a project that encourages resolution of disputes at the job level by identifying and discussing issues before they become disputes. If needed, the DRB can hold informal or formal hearings that provide advisory opinions to help parties resolve disputes. (The written recommendations that result from formal hearings are non-binding, but are admissible later in arbitration or litigation.) For larger projects, DRBs typically consist of three members, but only one “dispute resolution advisor” may be used on smaller projects.
According to the Dispute Resolution Board Foundation, projects that have used DRBs were found to be 58% “dispute free”—meaning that no DRB hearing was required—and 98.7% of projects were completed without the need for subsequent dispute resolution methods, such as mediation, arbitration, or litigation. These success rates resulted in cost savings for the projects and the parties by reducing legal and expert fees. Bids for construction are also reduced by ensuring less costly dispute resolution.
The University of Washington started using DRBs in 1993 and has not been to litigation or arbitration on more than 60 major projects in the 23 years since they started mandating use of DRBs.
Design professionals benefit when projects employ a DRB due to the reduction in end-of-project claims. In the past 10 years, more than 25% of claim payments made on behalf of design professionals in the Schinnerer program were the result of claims for delays and extras. Since 66% of claims against design professionals came from the project owner or contractor, early resolution of claims on these projects would greatly reduce the frequency and severity of claims against design professionals.
Design professionals can influence and encourage the use of DRBs by including a requirement in the specifications that all disputes must be submitted to a DRB. The DRB agreement is then signed by the project owner, contractor, and DRB member(s), and the costs shared equally by the owner and contractor. The DRB is organized when work begins, before there are any disputes. The DRB is kept abreast of job developments by periodically reviewing relevant documentation and regularly visiting the site so that they are ready to convene promptly when either party refers a dispute to the DRB.
If you want to learn more about DRBs, visit the Dispute Resolution Board Foundation or stream or download the recorded Schinnerer webinar on this topic at (access limited to current policyholders and brokers).