“ ALL TOGETHER NOW: INNOVATIVE CONTRACT MANAGEMENT WITH DISPUTE BOARDS ” PRESENTERS: “ ALL TOGETHER NOW: INNOVATIVE CONTRACT MANAGEMENT WITH DISPUTE BOARDS ” PRESENTERS: Adrian Bastianelli, Moderator Peckar & Abramson, P.C.Adrian Bastianelli, Moderator Peckar & Abramson, P.C. Washington, DC Warren Bullock Sebastopol, CAWarren Bullock Sebastopol, CA Doug Holen Santa Fe, NMDoug Holen Santa Fe, NM American Bar Association Forum on the Construction Industry 2012 Fall Meeting

OVERVIEW OF DRB PROCESS ObjectiveObjective Selecting the DRB MembersSelecting the DRB Members Site VisitsSite Visits HearingsHearings RecommendationsRecommendations BenefitsBenefits StatisticsStatistics DRB FoundationDRB Foundation The Washington ExperienceThe Washington Experience

DRAFTING THE CONTRACT Specification provisionsSpecification provisions Three Party AgreementThree Party Agreement DRB proceduresDRB procedures What should be included?What should be included? –Qualifications of DRB members –Ethics requirements (neutrality) –Selection process for DRB members –Timing of selection of DRB members –Payment of DRB members

DRAFTING THE CONTRACT –Timing of regular meetings and site visits –Method of referral of disputes to the DRB –Pre-hearing submissions –Hearing procedures –DRB recommendations –Binding or non-binding –Admissibility of DRB recommendations –Informal or advisory opinions –Clarification and reconsideration

SELECTING THE DRB How do you select the DRB members?How do you select the DRB members? –Party appointed with right of each party to reject member without cause –Mutually selected –Parties designate several and other party selects one from that group Are attorneys allowed to be members of a DRB?Are attorneys allowed to be members of a DRB?

SELECTING THE DRB Can DRB members appointed by a party really be neutral?Can DRB members appointed by a party really be neutral? Are DRB members governed by any ethical standards?Are DRB members governed by any ethical standards? Is a DRB member required to have DRB training?Is a DRB member required to have DRB training? How much do DRB members get paid?How much do DRB members get paid?

REGULAR MEETING AND SITE VISIT How often?How often? What is discussed at the regular meetings?What is discussed at the regular meetings? Why make regular meetings?Why make regular meetings? –Observe the work in the event of a future claim –Observe the people –Develop a relationship of trust with the parties –Force a real time discussion of the issues

REGULAR MEETING AND SITE VISIT Does the DRB become involved in the construction process?Does the DRB become involved in the construction process? –What if the DRB member observes a construction defect? Does the DRB try to help the parties resolve future problems?Does the DRB try to help the parties resolve future problems? What happens if the parties decide to save money by canceling the regular meetings?What happens if the parties decide to save money by canceling the regular meetings?

THE DISPUTES PROCESS What kind of discovery do the parties get?What kind of discovery do the parties get? What do the prehearing submissions look like?What do the prehearing submissions look like? Who should make the presentation?Who should make the presentation? –Project personnel –Home office personnel –Consultant or expert –Lawyer

THE DISPUTES PROCESS What is the place of the lawyer in the presentation of the dispute?What is the place of the lawyer in the presentation of the dispute? How can you decide a claim without cross examination?How can you decide a claim without cross examination?

THE RECOMMENDATIONS Why recommendations and not a decision or award?Why recommendations and not a decision or award? Should the recommendations be binding?Should the recommendations be binding? Should they be admissible in court?Should they be admissible in court? What do the recommendations look like?What do the recommendations look like? What is the key to drafting the recommendations?What is the key to drafting the recommendations?

THE RECOMMENDATIONS Can the DRB do equity or is it bound to enforce the contract language and the law?Can the DRB do equity or is it bound to enforce the contract language and the law?

THE ADVISORY PROCESS Why have such a process?Why have such a process? Can the DRB fairly consider the claim in the formal process once it issues recommendations in the advisory process?Can the DRB fairly consider the claim in the formal process once it issues recommendations in the advisory process?

OTHER ISSUES What do you do if one party becomes dissatisfied with a DRB member?What do you do if one party becomes dissatisfied with a DRB member? Should the DRB act proactively?Should the DRB act proactively? Should the DRB mediate or assist parties in negotiation?Should the DRB mediate or assist parties in negotiation? Can the DRB handle subcontractor or design professional claims?Can the DRB handle subcontractor or design professional claims?

OTHER ISSUES Can the DRB be effective on a small project and what is a small project?Can the DRB be effective on a small project and what is a small project? Should stepped negotiations or mediation precede the DRB process?Should stepped negotiations or mediation precede the DRB process?

TO DRB OR NOT TO DRB Reasons to include a DRB provision in the contract?Reasons to include a DRB provision in the contract? –Results in discussion of issues regularly in front of 3 neutrals whom the parties want to impress –Avoids disputes even reaching DRB hearing stage –Provides recommendations from 3 experts who the parties trust and who have seen the work –Real time resolution –Expeditious and low cost

TO DRB OR NOT TO DRB Reasons to include a DRB provision in the contract? –Non-adversarial proceedings, allowing the parties to maintain good relations during the project –Avoids the end of job omnibus claim –Avoids litigation

TO DRB OR NOT TO DRB Arguments against including a DRB?Arguments against including a DRB? –Cost –Time commitment –Non-binding –DRB may do equity and not enforce the contract –No discovery or cross examination –Recommendations could sway court or jury

SUMMARY Do DRB’s really work?Do DRB’s really work? Will they put the construction litigator out of business?Will they put the construction litigator out of business?