If you are in the unfortunate position of facing a dispute during the course of a construction project, you may find yourself needing to engage with a Dispute Board.
A Dispute Board is a standing group that usually consists of three impartial and independent people.
These people will be selected by the contracting parties and should be aware of the goals and objectives of the project.
The aim of their implementation is to prevent a dispute from arising or to find a resolution in the event of a dispute.
While it is potentially reassuring to know that someone may aid you in times of crisis, the question remains as to how effective Dispute Boards actually are when it comes to the construction industry.
A recent survey, published by King’s College London, aimed to establish the effectiveness of Dispute Boards and it is worth breaking down what they found.
Ad hoc vs standing Dispute Boards
While it may be tempting to utilises Dispute Boards on an ad hoc basis, this may potentially leave you in a position that leaves your clients and investors unhappy.
75 per cent of funders prefer standing Dispute Boards due to the time saved in having to establish them.
While individuals and funders can rest assured that the majority of Dispute Boards with which they engage are standing, entities reported that nearly 60 per cent of the Dispute Boards they utilised were ad hoc despite 72 per cent saying they preferred standing Dispute Boards.
It may be time for entities to consider following the initiative displayed in other parts of the sector and ensure standing Dispute Boards are established.
This will allow them to keep up with the changes and challenges that often occur during construction projects and reduce the risk of missing crucial deadlines.
Do Dispute Boards work?
Not every Dispute Board decisions is binding and this may cause some hesitancy around engaging with the process at all.
In fact, only 30 per cent of individuals indicated that Dispute Boards issued binding decisions.
Yet even when Dispute Boards issue recommendations instead of binding decisions, individuals still report adhering to the verdict ‘most of the time.’
Most individuals, entities, and funders find Dispute Boards useful for avoiding disputes entirely and when disputes do arise, the length of time Dispute Boards take to resolve the issue was satisfactory.
This would indicate a strong degree of effectiveness most likely attributable to the independent nature of Dispute Boards.
Dispute Boards were found to be successful in the goal of remaining impartial and unbiased as over 80 per cent of individuals stated that they very rarely felt that a Dispute Board chair was biased.
Learning how to effectively engage and work with Dispute Boards to reduce the lengthy hassle of dispute processes may help boost confidence and ensure construction projects run efficiently.
Get in touch with our team today for further guidance on how to navigate all aspects of construction law.