We consider in this article whether the use of Standing Dispute Boards could bring merits in and be adopted by the UK construction industry, and, if so, would this require amending the legislation in force.
What are standing Dispute Boards?
Dispute Boards in construction are bodies created by contract and composed of independent and impartial persons1. In their standing mode, they are intended to operate from the outset and throughout the whole period of the contract, ‘not only to resolve disputes but also, if at all possible, to prevent them from happening’2. They become part of the project administration3, and help the parties avoid or overcome any disagreements or disputes that arise during the implementation of the contract4. They are a relatively new concept of dispute avoidance and resolution in major construction contracts, with a recognized pioneer experience being 40 years ago on the Eisenhower Memorial Tunnel project in the USA5. This was developed in order to address the deleterious effect of claims, disputes, and litigation upon the efficiency of the construction process, leading to rapidly escalating costs6.
Since then, recourse to Dispute Boards appears highly popular in the USA, with several thousand projects recorded using those7. As the success of this process became more apparent, it greatly expanded in North America as well as throughout the world8, in particular with its use under FIDIC forms of Contract and by some International Financing Institutions9.
At the time Dispute Boards started to develop internationally, England and Wales introduced statutory adjudication of construction disputes through the Housing Grants, Construction and Regeneration Act (HGCRA) 1996, later amended by the Local Democracy, Economic Development and Construction Act (LDEDCA) 2009, with the underlying Parliament intention to introduce a ‘speedy mechanism for settling disputes in construction contracts on a provisional interim basis’, as put forward by (as he then was) Justice Dyson in Macob Civil Engineering Ltd v Morrison Construction Ltd10, who further commented in 201111 that
…There was a public interest in claimants obtaining a swift decision from an
adjudicator that was binding until the dispute could be finally resolved.
Dispute Boards and England and Wales statutory adjudication appear to share similar foundations: combatting the negative time and cost effect of protracted and unresolved disputes. But have they addressed this issue in similar terms, and if so to what extent? Do Dispute Boards bring additional benefits to statutory adjudication and should they be adopted in England and Wales, at least on major projects? And if so, would this require amending the legislation currently in force?
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(1) Chern (2015), 4.
(2) Bunni (2005), 599.
(3) Chern (n 1), 4.
(4) International Chamber of Commerce , Dispute Board Rules (2015), 2.
(5) Dispute Review Board Foundation, DRBF Practices and Procedures Manual, ch 1.1.
(6) DRBF (n 5), ch 1.1.
(7) Mastin (2013).
(8) DRBF (n 5) ch 1.1.
(9) Gould (2011).
(10) [1999] B.L.R. 93 (TCC) [14].
(11) Dyson (2011), 14.