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Dispute Adjudication Boards: A Viable Alternative To Adjudication?

26th August 2021

Dispute Adjudication Boards: A Viable Alternative To Adjudication?

Rachael Hobbis, a Partner in the Higgs LLP Construction team, puts the new Dispute Adjudication Board Documentation under the microscope.

The Joint Contracts Tribunal (JCT), in conjunction with the Chartered Institute of Arbitrators (CIArb), has recently published the first Dispute Adjudication Board Documentation 2021 (DAB 2021). But how likely is the uptake of the new Dispute Adjudication Board (DAB) option in practice?

How do the JCT DAB Rules work?

The DAB 2021 provides a set of rules and a JCT Model Dispute Adjudication Board Tripartite Agreement that the parties sign. Article 4 outlines the appointment of the DAB, specifying that the board can comprise of one or three members. The principle behind this is that the board members become familiar with the issues of the project and provide non-binding decisions to enable parties to settle potential disputes in a collaborative fashion in a bid to avoid adjudication.

DABs have long been recognised internationally as a successful method of resolving disagreements and maintaining relationships between the parties. In fact, the NEC4 and the 2017 FIDIC suite include DABs. Therefore, this publication offers a contemporary approach to dispute settlement, with the JCT acknowledging that the adversarial process of adjudication can be detrimental to the positive and collaborative relationships that are paramount in construction projects.

Is a JCT DAB needed?

Typically, DABs are used for international, long term energy and infrastructure projects that the JCT suite of contracts are less commonly used for. Therefore, did the JCT suite of contracts need to adopt a DAB or are they pointlessly replicating developments in other forms of contracts?

The JCT DABs are designed to be used with two of the JCTs main contract forms: JCT Design and Build and the JCT Major Project construction contract. Both forms are used on projects that are long lasting and potentially complex and therefore would benefit from this collaborative form of dispute resolution. Additionally, remember Article 4 allows for a DAB consisting of only one party and ad hoc appointments of a DAB which could be more applicable to smaller projects, suggesting that DABs could have a place in dispute resolution for this contract model in all forms.

Additionally, adjudication under the Housing Grants, Construction and Regeneration Act (Construction Act) has been a tried and tested solution to disputes using the JCT form of contract. This again raises questions about the need for a JCT DAB. But there is evidence to suggest that the DABs could complement rather than compete with the Construction Act. For example, Article 4.9 of the rules explain that if a DAB has not been appointed and one party starts an adjudication, then this will apply as per S108 of the Construction Act, suggesting that the Construction Act will take precedence and that DABs are an attempt to prevent adjudication where possible, working in conjunction with the Construction Act.

As this form of dispute resolution is new to the JCT, it remains to be seen how it will be used for both small and large scale JCT projects. But it is clear to see that DABs have the potential to be a viable alternative and/or helpful precursor to adjudication.

Contact me for help and advice in drafting and negotiating all forms of construction documentation or construction disputes.

 

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