The following questions are commonly asked about Dispute Review Boards. A full examination of the process, including setting up a Board, selecting members, administering the DRB, and case studies and testimonials are available in the DRBF Practices and Procedures Manual. Click here for access to the Manual.
Does it really work? How effective is it?
DRBs have proved to be exceptionally effective. In North America DRBs have been employed in over 1,200 projects, aggregating some $90 billion in construction cost. Roughly 1,500 DRB recommendations have been issued, and, of these, all but a handful have been adopted by the parties, thereby avoiding costly and time consuming arbitration and litigation.
Does the mere presence of a DRB encourage contractor claims and disputes?
No, the experience has been quite to the contrary. The presence of a DRB has had a prophylactic effect, deterring the assertion of contractor claims and disputes. On construction projects having DRBs, the average number of disputes taken to the Board has been only 1.2 per project. This is considerably less than the average number of disputes taken to court or arbitration on projects without Boards.
How much does a DRB cost? Does it add value?
DRB costs range from 0.05% of final construction contract cost, for relatively dispute-free projects, to a maximum of 0.25% for difficult projects with disputes. Considering only projects that refer disputes to the DRB or that had difficult problems, the cost ranges from 0.04% to 0.26% with an average of 0.15% of final construction contract cost, including an average of four dispute recommendations.
Do DRBs promote acrimony or posturing among the parties?
No. In fact DRBs have proved to reduce acrimony and posturing among the parties. The greatest source of acrimony among the parties to a construction project is festering, long unresolved claims and disputes. This has an escalating effect and makes the resolution of relatively simple issues increasingly more difficult as time progresses. Win or lose, parties find it more productive to resolve issues as they arise, so they can progress the construction without carrying the baggage of unresolved claims and disputes.
Do DRBs interfere with timely completion of the project?
No, they do not. DRB hearings are typically conducted right on the project site. Board members are familiar with the project by virtue of their having attended regular quarterly status meetings and having reviewed monthly progress reports. They were selected in the first instance based upon their experience in construction of similar projects. DRB procedures are informal and simplified in comparison with court or arbitration proceedings. Attorneys are encouraged not to attend hearings and, if they do attend, they are rarely permitted to make presentations or participate in the proceedings. As a result, DRB hearings are short and do not disrupt construction or adversely impact job progress.
What are the types of DRBs?
One type of DRB is recommended by the DRBF. Three members are chosen jointly by the owner and the contractor. The Board members work together as a three member neutral board. Another type of DRB uses a single advisor. Both the contractor and owner agree on a single advisor to work as a neutral party to help resolve construction disputes.
Is there a DRB that would work for smaller projects such as a school, mall, or small building?
Yes, single advisor DRBs may be used on smaller projects under $10 million in costs. Projects that are larger than $10 million in construction costs should use the standard three-member DRB.
Are there statistics on the success rate of projects that have used DRBs?
The DRB Foundation publishes a DRB Database, which is a compilation of statistics on DRB projects reported over the years from our membership. It is Appendix 1A of the Manual and can be downloaded from this site.
Who pays for the DRB?
The owner and contractor each pay 50% of the DRB costs.