Dispute Resolution Processes - Design-Build for Water and Wastewater Projects - page 297

• Have a well-defined change order process that enables issues to be raised and
resolved in a timely manner
• Develop a procedure within the DB team for resolving design-related issues
• Involve and regularly inform third-party stakeholders on issues that affect them
DISPUTE RESOLUTION ALTERNATIVES
When disputes occur, the parties can use both binding and nonbinding dispute resolution
processes. Most parties prefer to use nonbinding resolution options first. Then, if they are
not able to reach an acceptable outcome, binding processes can be used.
Nonbinding Dispute Resolution Processes
Nonbinding dispute processes are often called alternative dispute resolution (ADR) pro-
cesses. ADR processes are relatively informal and sometimes use a neutral party to assist
the parties in accomplishing their goal of settling the dispute (WDBC 2010). The ADR
processes most commonly used for DB projects are shown in Table 24-1.
There are a variety of benefits to using nonbinding ADR processes, including the
following:
• The nonbinding nature of the process lets the parties present their positions in a
simplified, cost-effective manner, frequently without lawyers.
• The parties decide how to resolve the case, as opposed to letting someone else
decide the case for them.
• These processes do not consume the time of key personnel.
• If a neutral third party is used, he/she can provide an objective evaluation of the
strengths and weaknesses of each party's position and help promote a resolution.
• These processes allow for flexible and creative solutions, which might or might
not involve a monetary solution.
Nonbinding ADR is not appropriate for every situation, however, and parties should
consider the following questions before embarking on such a process:
1. Are all parties really interested in settling?
2. Can the parties accept the objectivity of the neutral's evaluations?
3. Are the parties willing to disclose sufficient facts to get the dispute settled?
4. Do the parties need more information to assess their positions for settlement?
Binding Dispute Resolution Processes
A binding dispute resolution process is one where a neutral, such as a judge, jury, or arbi-
trator, makes a decision that is final and binding on the parties, subject only to some rights
of the losing party to appeal. Although the parties could make one of the nonbinding
ADR processes final and binding, this decision is contrary to the voluntary nature of these
processes and the fact that they are all intended to facilitate settlement. Given this, there
are essentially two binding dispute resolution processes that are used in the construction
industry: arbitration and litigation.