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ABA Dispute Resolution SectionWomen in Dispute Resolution
December 2014
Dispute Boards: An Introduction
Deborah Bovarnick MastinLaw Office of Deborah Mastin, PA
Miami, FL
Stuff Happens – How do your clients…
• manage unplanned events during the performance of their projects?
• mitigate the impact of unplanned events in real time at the project level?
• Contractual structure for dispute avoidance and mitigation using independent panel of impartial professionals in real time
• Begins at the inception of project and operates continuously during performance
• Can transform into dispute resolution (like arbitration), if dispute avoidance fails
• A/K/A Dispute Review Board, Dispute Resolution Board, Dispute Avoidance Board, DRB
What is a Dispute Board?
Why have a Dispute Board?
• Mitigates impacts of activities not yet performed for the best interest of the project
• Disputes don’t aggregate or compound
• Validates decisions to compromise
• Process cost dramatically lower
What Makes A Panel Effective?
• People– Trust and respect for Panel
• Process– Professional, problem-solving,
confidential
People: Selection Criteria for Panel
• Appropriate professional experience• Ethics – Disclose prior relationships with parties– Preclude new relationships during
project
• Available, interested, neutral, unbiased
• Trained in Dispute Board practices• Mediators and arbitrators• Industry professionals and lawyers
Process: Creating the Dispute Board
• Specification within owner-contractor Agreement – Establish procedures
• Engagement agreement between each Panel member, owner and contractor (“3-Party Agreement”)– Establish fees, release of liability
Process: Objectives of Specification
• Dispute avoidance
• Dispute mitigation
• Facilitation & communication
• Not technical advisors or mediators
• Dispute resolution
Process: Training the Project Team to Succeed
• At first meeting establish expectations of panel operations
• Regular site visit facilitation meetings– monitor progress of project– dispute prevention and mitigation– builds confidence and trust– Ex parte and caucus prohibited
Process: Regular Periodic Meetings
• Confidential facilitation - the real value
• Monthly meetings typical = prerequisite to claims
• Review schedule and discuss potential disruptions
• Explore in detail the “Why?” behind the numbers
• Invite all stakeholders
Process: Informal Guidance
Before costs incurred
Limited presentations
Early “quick read”
Oral guidance offered by Panel
de novo “formal” hearing if not accepted
Process: Formal Proceedings
• Inquisitorial
• Presentations by parties not sworn
• Results in non-binding or binding written report
• Admissible or Inadmissible?
Who is Using Dispute Boards?
• 1970-2010 over 2200 projects > $150B USA
• Infrastructure, tunnels, bridges, roads, dams, airports, seaports, public transit, hospitals, universities, Panama Canal
• World Bank, FIDIC, ConsensusDocs • Real estate development, IP, IT, Pharma
• Complex commercial “too big to fail”
Since 1993 UW used Dispute Boards • In more than 40 contracts • Dispute Board cost < $50K each• Total project value > $4 Billion• only 2 formal hearings in 20 years
University of Washington Experience:
My First 2 Dispute Boards
• Arsht Performing Arts Center, Miami, Florida
• Miami International Airport North Terminal Development Project
Arsht Performing Arts Center, Miami
Miami International Airport North
Bring Value to Your Client
• Looks forward, not backward
• Opportunity to modify future actions
• Low cost with high effectiveness
• Subsequent mediation & arbitration options preserved
Reference Material
• Dispute Review Board Foundation: www.drb.org
• ConsensusDocs: www.consensusdocs.org• American Arbitration Association: www.adr.org• International Chamber of Commerce:
www.iccwbo.org• International Institute of Conflict Prevention
and Resolution: www.cpradr.org • Construction ADR, ABA Forum on the Construction
Industry
