On 9 December 2024, the Centre of Construction Law and Dispute Resolution at King’s College London (the “Centre”) published a report titled “2024 Dispute Boards International Survey: A Study on the Worldwide Use of Dispute Boards Over the Past Six Years” (the “Report”), providing insights on the use and effectiveness of dispute boards globally.
Methodology
The Report analysed responses from individuals (i.e., practitioners), entities (i.e., users), funders, and institutions involved in the constitution and administration of dispute boards.
The survey defined a dispute board as any “job site dispute avoidance or resolution mechanism, constituted by individual(s) that should operate independently from the parties to the contract(s) and with the purpose of addressing the disputes of a specific Project”. This definition encompasses common industry labels such as dispute adjudication boards, dispute avoidance boards, dispute review boards, dispute advisory boards and dispute review panels.
The Report drew responses from 213 respondents across 4,019 reported dispute boards. The responses were complemented by the analytical efforts of the Centre, a six-man steering committee of experts and three expert consultants.
Key findings
The Report outlines several key findings as to the use and specific features of dispute boards:
- The adoption of dispute boards on projects: 41% of entities and 100% of funders indicated that they require the inclusion of dispute boards in their projects. 26% of entities and 75% of funders, however, noted that they had, in certain cases, deliberately excluded dispute boards from their contracts mainly due to costs.
- Duration: The respondents indicated that the entire dispute board process usually lasted between 76 and 90 days, with the complexity of the case identified as the most common factor affecting the length of the process.
- Dispute avoidance: 50% of individuals and 32% of entities reported that dispute boards regularly adopted dispute avoidance measures, with individuals noting that these measures usually led to the complete avoidance of the dispute while entities noted that the measures usually led to the dispute being relatively reduced.
- Compliance with dispute board decisions: Individuals and entities differed slightly on compliance with dispute board recommendations, with individuals reporting compliance “most of the time”, while entities reported compliance “sometimes”. However, both respondent groups concurred on compliance with binding decisions, with parties said to comply “most of the time” and only pursuing subsequent litigation and arbitration after dispute board decisions sparingly (i.e., 0–10%). The respondents noted further that, where there was subsequent litigation or arbitration, the outcomes rarely differed substantially from the dispute board's original decision.
- Costs: The respondents indicated that there was usually no provision in the contract establishing the dispute board’s fees. Most respondents reported that fees were usually agreed in form of monthly retainer payments. Regarding the total costs of dispute boards, individuals reported a common range between $100,001 and $200,000, whereas entities reported a range between $200,001 and $300,000. In both cases, respondents confirmed that the amounts reported tended to represent between 0% and 0.5% of the total costs of the projects.
- Support for an international convention on enforcement of dispute board decisions: Most respondents support the introduction of a convention to facilitate the circulation and enforcement of dispute board decisions. Notably, 58% of individuals, 63% of entities, 92% of institutions, and 50% of funders expressed support for this proposal.
- Diversity: Most individuals (42%) found that the average composition of the dispute board was only a ‘little diverse’, noting an improvement in diversity in the last five years. Entities were divided between the belief that dispute boards were ‘diverse’ (36%) or a ‘little diverse’ (36%).
Comments
The Report highlights the increasingly important role of dispute boards in construction projects. Despite concerns over costs, dispute boards are widely adopted and have proven to be effective in dispute avoidance and resolution, according to users. There is strong compliance with their decisions, and growing support for an international convention to enhance their enforcement. Although diversity within the boards could improve, their impact on ensuring fair and efficient project outcomes underscores their pivotal role in the global construction industry.
Click here to access the Report in full.
Up next