New Zealand sits on the cusp of the largest construction boom in a generation. One of the challenges (and opportunities) that this presents is how best to manage the inevitable increase in building and engineering disputes. While this is especially true for the Canterbury rebuild, the pressures will be felt around country.
The attached paper, which was prepared for the 2014 AMINZ dispute resolution conference, discusses and aims to raise awareness of Dispute Resolution Boards (DRBs) as an alternative method of dispute resolution for construction projects.
The DRB concept was developed nearly forty years ago, yet DRBs have been adopted in only a handful of New Zealand projects to date. It follows that there is scope to increase their use nationally, with potentially significant savings to principals and head contractors from avoiding or minimising costly disputes at the end of a project.
The work of a DRB is in the nature of ‘spot arbitration’ with a board of independent persons empowered by contract to assist the parties and make determinations during the life of the project. What distinguishes it from other dispute resolution processes is that the board is already familiar with the project and benefits from considering issues contemporaneous with the works. As a result, there is an emphasis on avoidance as much as resolution, and DRBs have an impressive track record around the world.
The paper focuses on DRBs as a dispute resolution method in a New Zealand context. In doing so it explores what is driving New Zealand’s looming construction boom and the high likelihood of increased claims. While DRBs are traditionally suited to infrastructure projects (because of the associated costs), the paper also explores the idea of mini-DRBs for smaller projects, including whether central or local government, or professional organisations like AMINZ, have a part to play in promoting and facilitating their use.