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DRBs and the DRA

Fast and economic dispute resolution for large projects

What is a DRB?

A Dispute Review Board (DRB) is a panel created at the start of a project and empowered to make rapid decisions on any dispute that may arise during the project.  The operating rules of the DRB specify whether its decisions are binding, temporarily binding, or non-binding.  Decisions can be limited to factual (as opposed to legal) issues or can cover the full range of issues.

If the decision is temporarily binding, it is so for a definite period of time (for example, until performance of the contract has been completed), but it can be challenged and reversed in subsequent binding proceedings (such as arbitration).

How does a DRB work?

The key feature of a DRB is that its members are active throughout the project and are not chosen after the dispute has arisen or, worse, after the project has been completed.  DRB's make regular inspections of the work in progress and hold regular meetings with the project teams.  The majority of issues brought to the attention of a DRB are technical, thus the members should have a technical background.  Additionally, members need to be well versed in contract administration and confident in their ability to understand and interpret contractual provisions.

Benefits of a DRB

Use of a DRB allows work on large, lengthy projects to continue without their getting bogged down in litigation.  DRB members are familiar with the work and can observe problems as they arise.  This avoids the need to collect evidence months or years after the work took place.  Furthermore, problems surface early and usually don't fester.  When a DRB is in place, parties usually work hard to resolve potential disputes themselves.  Damaging and costly "duels of egos" are avoided.

Do DRBs work in practice?

DRBs have been used in the construction industry around the world for many years, with good success rates.  Among the examples worth mentioning are the DRB for the Channel Tunnel, which successfully resolved most of the disputes submitted to it, and the DRB for the new Hong Kong Airport Project (whose results have not yet been published).

What is a DRA?

The Dispute Resolution Adviser (DRA) is an individual empowered to decide which dispute resolution technique should be used to resolve any particular dispute.  The DRA can apply formal or informal facilitated negotiation, mediation, or accelerated or normal arbitration procedures in order to facilitate settlement.

How does a DRA work?

The DRA is appointed at the beginning of the project, visits the site regularly, and assists the parties to facilitate settlement of any disagreements or disputes that may have arisen since the previous visit.  The DRA decides which dispute resolution process to apply to each situation (that is, mediation, arbitration, or whatever).

Benefits of a DRA

Each dispute is resolved by the dispute resolution process which is most likely to provide an efficient and effective resolution of the conflict.   By efficient we mean a process that is fast and inexpensive.  By effective we mean a process that results in an outcome that reflects the parties' legitimate business interests.

Do DRAs work in practice?

Use of the DRA is a recent innovation in the Hong Kong construction industry.  Early experiences are favorable.

DRBs and DRAs are based on two key ideas: (1) disputes can be resolved more efficiently and more effectively by people who are familiar with the project from its inception, rather than by people who first learn about the project only after a dispute has arisen; and (2) no one dispute resolution process is optimal, so efficiency and effectiveness will be maximized if different types of disputes are resolved by different processes.