Dispute boards & IDR

Dispute avoidance and resolution in one

A Dispute Board or Independent Dispute Resolver, (IDR), may be composed of a single person or a panel of normally three or five experienced and impartial industry professionals. The Board is usually appointed before construction begins and meets on the site periodically, for example every three months. Dispute Board members are provided with the contract documents, become familiar with the project procedures, the parties and are kept abreast of progress and developments.

In the first instance the Dispute Board encourages the resolution of claims at site level. The members of the Dispute Board will help the parties head off disagreements before they escalate into a formal dispute but they can not decide an issue unless it is officially referred to them as a dispute.

When an issue cannot be resolved by the parties, it is the Dispute Boards job to review and decide the issue. The Board review includes a hearing at which each party will be given the opportunity to put its case and answer questions. As the Dispute Boards members will have the benefit of knowing what is going on during the contract the parties do not have to produce lengthy submissions as there is no need to explain the surrounding circumstances in detail. Hearings are often held on site and maybe relatively informal.

In arriving at a recommendation, the Board members consider the relevant contract documents, correspondence, other documentation, applicable law and the particular circumstances of the dispute.

The Board issues a written recommendation for the resolution of the dispute. This recommendation may be non binding or temporarily binding depending on the contract provisions. A Board that issues a non binding decision is usually known as a Dispute Review Board and one that issues a temporarily binding decision, a Dispute Adjudication Board.

The written decision normally includes an explanation of the Board’s evaluation of the facts, contract provisions and the reasoning behind its conclusion. Acceptance by the parties if the decision is non binding is facilitated by the parties confidence in the Board members technical expertise, first-hand understanding of the project, legal knowledge and practical judgment.

Dispute Boards are unique in that they have a role to play in dispute avoidance as well as dispute resolution. Evidence shows that they are very effective in reducing the number of disputes as the site personnel engage in less gamesmanship knowing that the Board is overlooking their every move. Claims are resolved in a less acrimonious atmosphere and during the currency of the project.