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Though a success story, DRBs have been involved in litigation. This article looks at some lessons to be learned from these cases.
Dispute review boards (DRBs) are a specialized form of alternative dispute resolution (ADR) developed for the construction industry. Tens of billions of dollars worth of construction have been completed in the United States on projects employing DRBs, most of that construction for public projects. For more than two decades, advocates of DRBs have touted the process as a unique form of ADR with an unmatched record of assisting projects in reaching completion with no litigation over construction claims.
The small but growing number of cases involving DRBs, however, demonstrates that the DRB process is not immune from conflict. If DRBs are to be a valuable ADR tool, users of the process should be aware of lessons that can be gleaned from the available body of case law. The lessons highlighted in this article can help prevent unpleasant surprises and increase the likelihood that the DRB process will be successful in avoiding disputes or resolving them without litigation or arbitration.
Nature of the DRB Process
Understanding the typical DRB process provides important context for the lessons from the courts. The typical DRB is composed of three industry experts, usually engineers or architects, experienced with the type of construction involved in the project. Ordinarily, the owner and the general contractor (GC) each appoint one DRB member and the first two members select the third member. Regardless of who appoints a DRB member, the owner and the GC must approve all members of a DRB. Each member is obligated to be neutral and impartial.
DRBs are established by contract between the owner and the GC. Model DRB provisions are available from the Dispute Resolution Board Foundation (DRBF) and the American Arbitration Association (AAA).1 In general, these provisions specify that the DRB is to be constituted at the outset of the project and that the parties must submit disputes to the DRB before proceeding to litigation or arbitration. On large projects, the DRB agreement often calls for the DRB members to receive project documents, make periodic site visits, attend project meetings with the owner and contractor, conduct informal hearings on disputes that are submitted to...