A Note on Dispute Boards - Construction Claims and Responses: Effective Writing and Presentation - page 180

presence of a board that is able to provide relatively-quick decisions pre-
vents the submission of spurious claims and unreasonable determinations
and reduces posturing by both parties. On projects having dispute boards,
an impressive 98% of disputes are resolved at dispute-board level.
Additionally, of the 2% of disputes where one of the parties did not accept
the board's decision and proceeded to arbitration, almost all of the arbitra-
tions supported the dispute board's decisions. FIDIC, for example, allows
a party to proceed to arbitration if it does not agree with the board's deci-
sion but, given these statistics, such a party would have to give very
serious consideration as to whether to accept the board's decision on the
matter or to proceed to arbitration in the hope that a new panel of experts
would arrive at a different decision. All this, of course, has an added
advantage that the parties can concentrate on construction issues rather
than on claims and disputes, with the obvious benefi t that this brings to
the project.
According to the Dispute Resolution Board Foundation, the cost of
employing dispute boards is between 0.05% of the construction cost on
dispute-free projects and 0.25% for more diffi cult projects and it must be
remembered that these costs are shared equally between the parties. I
would suggest that if it were possible to insure against disputes at such
costs, the parties would be rushing to their insurance brokers, especially
if these costs are compared to typical costs of arbitration or court proceed-
ings. Additionally, if the Contractor has comfort in the knowledge that his
claims will be dealt with fairly and reasonably and that any disputes will
be decided in an impartial and timely manner, it would be reasonable to
assume that he would consider that such a situation would remove a
certain amount of risk for which he would otherwise need to include within
his price. From this, it is also reasonable to assume that projects with
dispute-board provisions would result in potentially lower bids.
Another signifi cant advantage available to the project through the use
of dispute boards is that in addition to referring disputes to the board, the
parties can ask the board to provide an opinion on a matter. If one consid-
ers that disputes are often caused by differences in the interpretation of
the Contract, an opinion on the correct interpretation by the board could
very well head off a potential claim or, alternatively, provide enough con-
fi dence in the potential merits of a claim situation to gainfully pursue the
matter. As it was once put to the delegates at a Dispute Resolution Board
Foundation seminar which I attended: if three grey-haired father fi gures,
who are experts in their individual fi elds of construction, advise the parties
that, in their opinion and having carefully considered the matter in ques-
tion, the outcome of an arbitration would be this or that, most people would
accept it as being good advice. I can certainly think of several instances
in my career, before I became a grey-haired father fi gure myself, where I
would have welcomed such advice.
The advantages of dispute boards have been recognised by many
institutions internationally and their usage is becoming more widespread
through all parts of the world, with signifi cant usage in the USA, where,
probably unsurprisingly, given the USA's penchant for litigation, dispute