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Dispute Resolution Board Foundation
Fostering common-sense dispute resolution worldwide
Dispute Resolution
Boards
An Alternative to
Arbitration and
Litigation
Copyright 2007 Dispute Resolution
Board Foundation
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The DRB Foundation
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Nonprofit corporation
Formed in 1996
Created to promote the use of DRBs
around the world
Over 600 members from more than
thirty countries
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Board Foundation
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The DRB Foundation
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Goals
 Education
 Public awareness
 Networking
 Historical database
 Member & training directories
 Newsletter, specifications & other
publications
 International presence
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Board Foundation
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Development of DRBs
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History
How do DRBs fit with other dispute
resolution processes?
Keys to successful conflict resolution
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Board Foundation
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What is a DRB?
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3 reviewers
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experienced
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respected
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impartial
Organized before construction begins
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Board Foundation
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What is a DRB?
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Provided with contract documents
Becomes familiar with
 project
 participants
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Board Foundation
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What is a DRB?
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Meets on regular site visits
 with employer representatives
 with contractor representatives
Encourages resolution of disputes at job
level
Holds hearings
 makes recommendations
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Board Foundation
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How a DRB is Organized
Employer actions:
 Evaluates applicability of DRB to this
project
 Decides to use DRB
 Includes DRB specifications and 3-party
agreement in bidding documents
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How a DRB is Organized
After contract award:
 Each party nominates one DRB
member
 Parties approve other’s nominee
 First two members
 review contract documents
 select third member
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How a DRB is Organized
Third member approved and receives
contract documents
 DRB is formally convened
 3-party agreement is signed
 Organizational meetings are held
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DRB Responsibilities
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Periodic site-visits
Keep abreast of project activities and
developments
Encourage resolution of disputes by
parties
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DRB Responsibilities
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When a dispute is referred
 conduct hearing
 complete timely deliberations
 prepare a recommendation
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Board Foundation
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Costs of DRBs
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Direct costs
 $1000 to $2000 per day per member
 Travel time and expenses
Indirect costs
 Employee time in preparing for and
participating in DRB meetings
Considerably less than 0.5% of final
contract price
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Board Foundation
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Nine Elements of a Successful DRB
All 3 members are:
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Neutral
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Subject to approval of both parties
All 3 members sign a 3-party
agreement obligating them to serve
both parties equally and fairly
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Board Foundation
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Nine Elements of a Successful DRB
3.
4.
The fees and expenses of the DRB
members are shared equally by the
parties
The DRB is organized when the work
begins, BEFORE there are any disputes
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Board Foundation
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Nine Elements of a Successful DRB
5.
6.
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The DRB keeps abreast of job
developments by:
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relevant documentation
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regular site visits
Either party can refer a dispute
An informal but comprehensive
hearing is convened promptly
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Board Foundation
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Nine Elements of a Successful DRB
8.
The written recommendations of the
DRB are non-binding but admissible
as evidence later in
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arbitration
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litigation
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to extent permitted by law
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Nine Elements of a Successful DRB
9.
The DRB members are absolved from
any personal or professional liability
arising from their DRB activities
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Board Foundation
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Perceived Barriers to DRBs
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DRBs do not add value
 DRB cost advantages include
potentially lower bids, better
communication on the job site,
resolution of issues at job site level
and fewer end-of-project claims,
lower total contact completion cost
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Perceived Barriers to DRBs
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DRBs impose their own concepts of
fairness and equity
 Standard three-party agreement
requires the DRB to comply with
applicable laws and contract
provisions. Standard three-party
agreement requires the DRB to
comply with applicable laws and
contract provisions
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Perceived Barriers to DRBs
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DRBs may promote claims
 Has not occurred because contractor's
do not want to suffer loss of
credibility by submitting nonmeritorious claims
Lack of qualification or presence of bias
 Parties must only accept Board
members who are totally neutral and
impartial
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Perceived Barriers to DRBs
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Lack of qualification or presence of bias
 Parties must only accept Board
members who are totally neutral and
impartial
Promotion of acrimony & posturing
 Properly conducted, the DRB process
prevents or reduces acrimony
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Perceived Barriers to DRBs
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Lack of legal procedures & standards
 Extensive documentation and readily
available contemporaneous witnesses
minimize factual disputes
 Probing questions from experienced
Board members
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Application to Types of Construction
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Underground
Heavy highway
Buildings
Ports
Public projects
Dams
Power plants
Private projects
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Cost $avings and Other Benefits
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Dispute prevention benefits
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Dispute resolution benefits
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Cost savings statistics
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Dispute Prevention Benefits
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Tends to promote bilateral agreement
Facilitates positive relations
Facilitates open communications
Facilitates trust and cooperation
Minimizes aggregation of claims
Minimizes posturing
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Dispute Prevention Benefits
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Encourages identification, evaluation
and dealing with claims in a prompt,
business-like manner
Focuses on early identification and
analysis, and prompt resolution
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Dispute Resolution Benefits
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High resolution rate
Provides an impartial forum
Provides informal and rational basis for
resolution (political cover)
Parties are normally predisposed to DRB
proceedings
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Dispute Resolution Benefits
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Reduces transactional costs
 legal fees
 consulting fees
Reduces lost productivity time
Better informed decisions
Lower bids because of lower bid risk
premium
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DRBF Statistical Database
1988 thru September, 2004
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Total # projects
1237
Total value
$US89.7 billion
Recommendations issued
1418
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Acceptance rate
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Board Foundation
97.79%
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Dispute Resolution Board Foundation
Fostering common-sense dispute resolution worldwide
Questions?
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Board Foundation
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Dispute Resolution Board Foundation
Fostering common-sense dispute resolution worldwide
Dispute Resolution Board Foundation
19550 International Blvd. So. Suite 314
Seattle, WA 98188
1-206-878-3336
USA(toll free) 1-888-523-5208
E-mail: [email protected]
Website: www.drb.org
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Board Foundation
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