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News Release from: Darbys Solicitors | Subject: Dispute Boards for the 2012 Olympics
Edited by the Buildingtalk Editorial
Team on 24 April 2007
Dispute Boards for the 2012 Olympics
Sean Hazell, Partner, Dispute Resolution Team, Darbys Solicitors, looks at Dispute Boards, a welcome addition to the contracts for the 2012 Olympics.
The UK construction industry is worth over GBP92.65 billion to the UK economy annually and employs over 1.92 million people By the very nature of the projects it is involved in the work is complex and often fraught with complexities
This article was originally published on Buildingtalk on 13 Jun 2003 at 8.00am (UK)
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It will be a huge challenge to procure and deliver the Olympic related projects on time and within budget.
The increase in construction work will also inevitably mean more disputes and there will be a need to facilitate a speedy and cost effective resolution to disputes, avoiding cases going to the technology and construction court.
Wisely, the Olympic Delivery Authority is aiming to avoid the costly lessons learnt on other large scale projects and recently announced that Dispute Boards will be included as part of all contracts which it will issue in connection with the Games.
Through the introduction of Dispute Boards the industry has a mechanism to solve disputes before they escalate into costly problems.
They provide an on-site framework for resolving disputes in a more informal and effective manner than would be the case in court or, indeed, through another lengthy form of mediation.
Dispute boards have three main elements and functions:.
* Firstly, the parties involved in the disputes have a substantial degree of ownership of them, deciding who should sit on the Board etc.
On this issue, they would be well advised to use trusted independent professionals who can objectively facilitate negotiations.
* Secondly, all members of the Board should be familiar with the project from the outset and should frequently keep themselves updated as to developments onsite with regular site meetings and updating notes from the various parties involved.
They should more or less act as flying mediators.
* Thirdly, in terms of the decision process, the parties involved in the dispute could agree that the Board will, when asked to intervene, merely give a recommendation to the parties.
This will not be binding on them; for this to work it will require a large degree of trust between the parties and members of the Board.
They may, alternatively, go one step further and authorise the Board to give a decision that will be binding on the parties until a judge or arbitrator overturns it.
* Finally, the establishment and utilisation of a Board will incur expense that is considerably less than would normally be incurred in contested court proceedings or arbitration.
In an industry that is well accustomed to high stakes litigation, the actions of one party in proposing the appointment of an outside mediator (such as a Dispute Board) instead of aggressively pursuing the matter in court could be interpreted by some as a sign of weakness.
However the guidance issued by the Department of Constitutional Affairs, DCA, should dispel such myths.
This states that in no uncertain terms "the courts take the view that litigation should be a last resort and that claims should not be issued prematurely when a settlement is still actively being explored".
A company should only go to court if it has failed to solve the dispute in some other way.
The Court is likely to be unkind to a construction company who goes to court without trying to do so.
And this should surely be deterrent enough to any construction company operating in a commercially harsh environment, with low margins and high risks.
Construction companies hoping to be Olympic winners can get into pole position now by exploring and understanding the role Dispute Boards can have in the contracts they obtain and undertake.
The Boards provide a real opportunity for the industry to amend its ways and deliver projects that are low on litigation but high on excellent examples of partnership, providing a win win situation for all involved.
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