Single Standing Neutral. In smaller projects, a single individual Standing Neutral can be a substitute for the three-person DRB, and function in exactly the same manner as the classic DRB. Project Neutral. A single Standing Neutral called a Project Neutral is one of the dispute resolution options that are recognized in the ConsensusDOCS contract forms that were released in Those forms call for a tiered approach to dispute prevention and resolution that starts with direct discussions between the parties at various levels within specified time frames; if the problem is not resolved at that level, the parties can choose to refer it to either a previously-selected single Project Neutral or a DRB.
If the parties do not choose to use a Project Neutral or DRB the dispute goes to mediation, and then if mediation fails, to a binding dispute resolution process such as arbitration or litigation. Instead of simply continuing to have the architect be the sole authority for making initial decisions, these forms allow the parties to agree to designate a truly independent neutral third-party "Initial Decision Maker" IDM in the contract if they do not wish the architect to serve in that capacity.
If an independent IDM is named in the contract, that person is the person who will, within 10 days make an initial decision on all claims other than a few specifically delineated exceptions, such as aesthetic effect. The initial decision is binding upon the parties subject to either party initiating mediation within a specified time frame , and, if that fails, arbitration or litigation.
Standing Arbitrator. A variant of the standing neutral process, useful in a situation where it is important to achieve early decisions that are binding, is to give the neutral the power to render binding decisions, thus acting as an arbitrator.
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Because this process shifts control of the dispute to the arbitrator, it has the disadvantage of taking away the ability of the parties to cooperatively work out their own mutual resolution of the dispute. Also, parties faced with the prospect of a binding decision are usually represented by lawyers, tending to add expense, cause delay, and escalate adversarial attitudes.
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Standing Mediator. Another variant of the standing neutral process is the designation by the parties of a mediator at the commencement of the relationship to assist the parties in negotiations to resolve disputes. Also, since parties involved in mediation are likely to seek the assistance of lawyers, this can add expense and cause delay. Where are DRBs Used? DRBs are used on construction projects all over the world and their use is growing. Once the province of the underground construction industry, DRBs are now found on all types of construction projects.
In the United States, a number of state highway departments use DRBs on all of their substantial projects.
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Transit authorities in several major cities specify some form of DRB, and DRBs can be found on significant construction projects such as heavy civil, wastewater, medical, and manufacturing plants, as well as airport, power plant, sports complexes and office building construction, among others. Single Standing Neutrals are beginning to be used on a number of smaller projects.
Abbreviated case studies of DRBs can be found at www. DRB Success Statistics The DRB is generally recognized as one of the most efficient and effective means of preventing and resolving claims and disputes on a construction project. Supporters of the DRB process point to its near perfect track record of avoiding litigation or arbitration on projects where it is used. They resolved of the disputes and the only one that actually proceeded to litigation and was eventually settled.
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DRB provisions will address:. A host of sample contract forms are available at www.
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However, one must exercise great care in using form agreements and terms that may not be suitable for particular projects. Seek the advice of skilled counsel in drafting DRB agreements and provisions given the complexity and idiosyncratic nature of construction projects and the long-term consequences of contractual agreements. Once a dispute erupts, selection processes may be more contentious.
Stipanowich on ADR in Construction | Business Conflict Blog
Consequently, parties should seriously consider mechanisms in the project contract that propel member selection in a timely fashion. Mechanisms that have been used include:. Inform Project Personnel for Buy-In It is also useful to alert project and field personnel about the existence of the DRB agreement and how the DRB operates, to both educate them and get their buy-in to the process when disputes arise. The three-party agreement will be appended to and made a part of the contract documents.
Selecting DRB Members Impartiality and Lack of Conflicts of Interest Selection procedures must assure appointment of a DRB that is completely impartial to provide credibility to their recommendations and party respect and confidence in reports. The success of the DRB process on any given project will turn in large part on the credibility of the Board Members.
The importance of a thorough and complete qualification and selection process cannot be overstated. Given the continuing evolution of law regarding disclosure and conflicts of interest in the ADR field, it behooves DRB members, because they are functioning as third-party neutrals, to be scrupulous regarding disclosures of conflicts of interest or potential conflicts. Disclosures assure party acceptance of recommendations, and are even more critical if DRB recommendations are admissible in any later adjudication proceedings. See p.
Construction Conflict Management and Resolution
Generally, the best approach is to err on the side of complete disclosure to allow parties to assess whether any potential conflicts are trivial or significant enough to bar selection of the proposed member. Expertise of DRB Members In addition to complete neutrality, and an absence of any conflicts of interest, it is vitally important that DRB members have significant experience and expertise in the type of construction at issue.
Members should also be experienced in the interpretation and application of construction contracts and the resolution of construction disputes. LiMa Solutions was founded on the simple concept that complex construction claims can be resolved most effectively once the core facts of the case are accessible to all parties. While unconventional, this open approach saves all parties time and money by closing cases quicker.
Also launching this week is LiMaSolutions. Follow the conversation at www. Professional development and learning enhancement:. Sol Voron has been working with the Construction sector for over 20 years providing consultation, assessment facilitation and training services associated with NSW government and private sector construction initiatives. This includes the facilitation of Cooperative contracting based GC21 project start up workshops, conducting GC21 project evaluation and monitoring meetings, facilitating value management studies and risk management workshops for school, hospital, community centre, civil works and dam safety upgrade projects.