December 14, 2021

Use of Dispute Review Boards in the Construction Process

By Sarah B. Biser, Esq. Construction Practice Co-Chair, Fox Rothschild LLP.

  Dispute Review Boards: Overview

Problems, disagreements and claims arise in most large and complex construction projects regardless of the project delivery method. These disputes can and do delay and significantly increase the cost of the project. Dispute Review Boards, also known as Dispute Resolution Board, Dispute Board, Dispute Avoidance Board or DRB, are often found in large construction projects to assist the parties to minimize, resolve or avoid disputes and mitigate adverse impacts to projects. To date, over $270 billion worth of construction projects have used the dispute review board process to avoid numerous disputes and achieve significant savings.[1]

 Unlike mediation and arbitration, a DRB is convened at the very beginning of the project and conducts regular meetings and visits at the project site throughout, allowing the DRB to discuss, observe and monitor construction, progress and potential disputes. At these meetings, DRB members become familiar with many of the facts and acquaint themselves with the job site personnel. If a dispute is submitted to them, the panelists have a great deal of knowledge about the circumstances of the problem to aid them in reaching their recommendations or conclusions. DRBs also encourage open and honest communications among or between the parties during the project, which in turn, encourages avoidance or resolution of disputes before they become formal claims. In short, the DRP process involves real-time discussion of the dispute with highly qualified people who know the particular project from day one and can provide recommendations on how to resolve disputes.

When a dispute cannot be resolved by the parties through negotiation, either party may submit the dispute to the DRB for a formal non-binding recommendation.[2]Project personnel for each party present their side of the dispute to the DRB in an informal setting usually without lawyers. If the parties don’t accept the DRB’s decision, the matter can be referred to arbitration for a binding and conclusive resolution.

Reasons to Implement a DRB:[3]

Owners implement DRBs: (i) to avoid claims, particularly massive claims at the end of jobs asserting difficulties from the early project stages, (ii) to minimize impacts on the project schedule due to unforeseen conditions or unanticipated late changes in the scope of the work, and (iii) to maintain predictability over the use of available funds.

The use of a DRB also helps to attract and increase competition because some international infrastructure contractors are hesitant to bid on a project that does not have a DRB. Public owners must ensure that the DRB is within the boundaries of best construction practices and that it would be a prudent expenditure of public dollars. The following are some DRB attributes that are attractive to owners:

  • Effect Future Behavior: DRBs offer the opportunity to impact future behavior on a project, and do so by evaluating past behavior.
  • Elicit Cooperation: DRBs can convert into arbitration panels, making them more effective than traditional partnering programs in eliciting cooperation among the parties and resolving the disputes.
  • All Stakeholders Can Participate: Indirect parties to the construction contract (i.e., subcontractors, tenants, and lenders) can participate, which enables consensus to be reached with all interested parties in a single forum.
  • Validation of Owners’ Decision: When oversight by elected officials, administrative supervisors, auditors, outside funding agencies and Boards is involved, a DRB provides independent, neutral, and competent validation of decisions by the owner’s staff to pay for extra work during the project.
  • Projects Are More Collegial: Projects with DRBs have a jobsite ambiance that less adversarial than traditional projects.
  • No Surprise Claims: Job conditions are discussed regularly, and a Contractor’s failure to raise a significant job condition at DRB meetings can lead to a waiver or abandonment of claims arising from prior impacts it failed to disclose to the owner.

How to Form a DRB

A DRB is formed by contract between the owner and the contractor. This means that there is no statute governing the formation or dispute board proceedings. The dispute board agreement should include provisions that discuss the following:qualifications of DRB members;

(i) ethics requirements (neutrality);

(ii) selection process for DRB members;

(iii) timing of selection of DRB members;

(iv) payment of DRB members;

(v) timing of site visits;

(vi) method of referral of disputes to the DRB;

(vii) prehearing submissions;

(viii) hearing procedures;

(ix) DRB recommendations;

(x) admissibility of DRB recommendations in future proceedings;

(xi) informal or advisory opinions; and

(xii) clarification and reconsideration.

Both the Dispute Resolution Board Foundation (www.drb.org), and ConsensusDocs (https://www.consensusdocs.org/) have sample provisions.[4] The Project Finance and Development Committee of the ABA, Business Law Section will be publishing its own sample provisions in the near future. A discussion of appropriate provisions to be agreed upon by the parties and the agreement to be executed among the DRB members and the parties is beyond the scope of this article.

Types of Dispute Boards:

Generally, there are three types of dispute boards:Dispute Adjudication Boards: which issue binding decision that must be complied within a certain time frame.

(i) Dispute Review Boards: which issue recommendation that are not binding on the parties.

(ii) Combined/hybrid Dispute Boards: which may issue recommendations or binding decisions.

(iii) Composition of the DRB Panel

Typical DRB panels have three members, although smaller projects (costing less than $10 million) may have a single panelist. There are different ways to select a panel:

(1) the parties meet and jointly agree on all three members;

(2) each party nominates a board member and the two board members then nominate a third member, subject to both parties’ approval. The third member typically serves as chair and all three members become neutral upon appointment; and/or

(3) each party proposes a list of three to five members. Each party selects from the other party’s list, and the two DRB members then select the chair subject to approval by both parties.

Panelists must be sufficiently experienced in the type of work required by the contract so that they bring value to the table as trusted mentors and technical resources for the project team They should also possess the interest, training and temperament to facilitate a project with humor and calm professionalism. Prospective panelists should commit to be available to convene on the schedule that the project demands.

The DRB works well only when the parties trust the panel. It is critical that panelists maintain impartiality and neutrality. Ex parte communications or any type are strictly prohibited. Similarly, unlike mediation, private caucuses with a single party are prohibited.

DRB members must be objective, impartial, neutral and without conflicts of interest. Prior to selection, prospective panelists disclose past and current relationships that could give rise to a perceived conflicts of interest, or indicate a lack of neutrality. These disclosures must be updated on a regular basis if there is any change.

DRB Meetings

  DRBs are characterized by regular meetings and site visits — four times a year, or at some other agreed-upon interval.

During the meetings, the DRB and parties discuss the progress of the work since the last meeting, difficulties encountered, schedule status, and potential claims and disputes. These conversations are often deemed confidential settlement negotiations to encourage an open exchange of information. At regular periodic meetings attended by affected stakeholders, a DRB may be asked to offer informal oral “advisory” opinions.

The DRB can meet job site personnel in an informal, non-adversarial setting when there are no disputes, assisting them in evaluating the subsequent presentations to the DRB by the parties. And with all due respect to our readers, the DRB often hears about the disputes before the attorneys have the chance to frame the claims and coach the witnesses.

The presence of the DRB often encourages settlement and resolution of disputes even before they are presented to the board. The objective is to discuss potential claims in a non-adversarial manner to facilitate negotiation and resolution. Without regular meetings and site visits[5], the DRB risks becoming a nonbinding arbitration panel.

The DRB’s written recommendations may be binding or non-binding. The trend in the USA is for them to be non-binding. The contract may provide that written DRB recommendations are admissible as reports of jointly selected experts, or that the recommendations are inadmissible in subsequent arbitration or litigation. There is a preference for non-binding, admissible recommendations.

Removal or Termination of a DRB Member

 If a party does not trust a DRB member, that party is unlikely to be persuaded by the DRB or that member. However, one party’s dissatisfaction with a DRB would allow that party to change the composition of the DRB just because that party was unhappy with the findings and recommendations of a DRB member or any other reason – leading to abuse of the process.

DRB Hearings

Either party may refer a dispute to the DRB at any time. The parties then submit short, concise position papers and relevant documents.No discovery is permitted, although DRB members have the right to request information necessary for resolution of the dispute.

The hearings are informal and nonadversarial — more like a mediation than an arbitration hearing. Presentations are made by persons involved directly in construction. The witnesses are not sworn. Lawyers typically do not make presentations, except to address legal issues. There is no cross-examination, but the parties can suggest questions to be asked, and DRB members are allowed to ask questions.

Findings and Recommendations

 Written Findings/Recommendations

The DRB does not issue a decision, verdict or award. Instead, it provides written, non-binding findings and recommendations that include an analysis to support its conclusions. DRB findings and recommendations are generally admissible in court or arbitration. This provides a major impetus for the parties to accept them. However, admissible findings and recommendations also may cause the parties to treat the DRB like an arbitration or litigation and seek discovery and other legal protections.

In addition, admission of DRB findings and recommendations may have an undue influence on a court or jury, which are likely to accept them because they come from industry experts selected by the parties before the dispute, despite the fact that they are based on unsworn testimony and hearsay that is not subject to cross-examination or other procedural safeguards.

Oral Recommendations

 We recommend including an informal or advisory DRB process in the DRB specifications, in which the parties typically provide the DRB with concise position papers and documents shortly before a regularly scheduled DRB meeting. Abbreviated oral presentations are made at the meeting. Quantum is usually not addressed unless that is a sticking point. The DRB deliberates and provides an immediate verbal advisory recommendation that does not preclude the parties from subsequently pursuing the dispute through the formal DRB process.

Cost of the DRB

DRB costs depend on the frequency of the meetings and length of the project. Depending on the project, fees ranging from $2,000 to $4,000 per day, per member are common, with costs split among the parties. A DRB holding no formal hearings might cost between $40,000 to $75,000 per year. On smaller projects, half-day meetings may be sufficient, at a lower cost.

Virtual Meetings

Before the COVID-19 pandemic, DRBs nearly always met in person. Now, all parties project are more willing to accept virtual meetings to resolve issues and keep the project on schedule. The basic principles for effective DB proceedings remain the same, despite the logistics. Please refer to the DRBF’s Dispute Board Manualfor guidance on issues involving virtual DB meetings:[6]

Enforceability of Dispute Board Decision

Disputes that are not resolved at the DRB or in mediation typically go to arbitration if the matter is international. When the losing party fails to comply with an arbitral award, the prevailing party may need to seek enforcement under the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards – which has been adopted (currently) by 165 of the 193 United Nations member states. This lack of enforceability is a weak link, however, the benefits and the likelihood of success of DRBs domestically and internationally weigh strongly in favor of using them to avoid and resolve disputes.

Visit Fox Rothschild’s Global Dispute Resolution Insights blog to read an extended version of this article.

Fox Rothschild LLP is home to one of the deepest Construction Practice Groups in the United States. With offices in major construction hubs nationwide, Fox’s experienced team advises on major construction and infrastructure projects, including drafting and negotiating contracts and litigating disputes involving such projects. Harnessing the combined strength of a nationally recognized construction practice and a deep bench of lawyers focused on Federal Government Contracts, we provide business-friendly advice to help our clients complete projects in the United States and internationally. Fox construction law practice is backed by a national firm of 950 attorneys providing a comprehensive suite of legal services from 27 offices coast to coast. For more information, visit foxrothschild.com/construction.

The views expressed in this article are not necessarily those of ConsensusDocs. Readers should not take or refrain from taking any action based on any information without first seeking legal advice


[1]          See the Dispute Review Board Foundation at DRB.

[2]          The parties can decide in advance to make the DRB’s recommendation binding under certain circumstances.

[3]          The Dispute Resolution Board Foundation (www.drb.org) publishes a Dispute Board Manual and a DRBF Document and Learning Library on-line.  The World Bank, which introduced the requirement for DRBs in 1995, continue to endorse the use of DRBs in the execution of the projects it finances.  The American Arbitration Association published its Dispute Resolution Board Guide Specifications on 1 December 2000, which can be incorporated into any contract.

[4]           The DRBF Practices and Procedures contains a set of guide specifications for use in contracts.  The ICC, FIDIC, the World Bank, AAA, and CIArb have also developed their own set of standard dispute board rules.

[5]           In the COVID and post COVID world, parties may consider virtual site visits – depending upon the issue, the nature of the Project, the size of the dispute, and the cost of convening all parties for a site visit.

[6]          “Best Practice Guidelines for Virtual Dispute Board Proceedings,” 5 August 2020, Dispute Review Board Foundation,