Dispute Adjudication Boards the JCT way

This article is from December’s edition of Aggregate, which featured a month-by-month review of 2021. This is May’s entry. To read the complete newsletter as a PDF, click here.

In May 2021, JCT published its new approach to dispute resolution – the dispute adjudication board documentation (DAB 2021).

When confronted with a possible conflict, avoidance can produce a better outcome than engagement. In other words, why fight if you have an alternative means of resolution? This seems to be the spirit in which the JCT has developed the DAB 2021. The JCT DAB is a suite of documents that seeks to provide a pathway through which parties can resolve a dispute before a costly and irreversible escalation occurs. In other words, the JCT DAB is a way of reaching an amicable conclusion to a dispute, without the need for a statutory adjudication or other proceedings.

Construction disputes are costly by nature, and the larger the project, the more likely it is that the parties will have to continue working together while they are in the midst of a formal dispute. Such disputes have the potential to corrode hard-won relationships that have developed between parties and impede the overall progress of the project.

Practically speaking, the suite is comprised of several documents: a DAB tripartite agreement (TPA), and a set of DAB rules. The DAB rules are designed to be used with the JCT Design and Build and the Major Project forms, while the TPA is designed to be signed by the two contracting parties and the DAB member(s) (typically the panel has three DAB members). Once the DAB rules are integrated, and the TPA has been executed, this forms a binding agreement which allows a DAB to be set up. This agreement can only be terminated if both contracting parties agree. Any decisions of the DAB are binding until final dispute resolution (if required).

The DAB is primarily a mechanism for avoiding disputes by anticipating them. It fulfils its purpose by advising under article 9 of the JCT DAB Rules, and the parties can request advice as and when they require it. This might occur in many contexts: during a site visit, a regular meeting, or by written request. Both parties remain involved in any discussion under the DAB. The utility of this is primarily to avoid disputes, rather than to work out disputes that have already arisen.

The success of the JCT DAB rests on whether people accept the assumption that collaboration is a cheaper, more amicable, and less time-consuming alternative to an argument between parties. It may be that in some cases a DAB merely acts as an unnecessary prelude to a full-blown dispute, wasting both time and money – particularly if the parties go in with an adversarial mindset and aren’t prepared to compromise. There is also a query about whether DABs are actually needed with adjudication already providing a temporarily binding decision within 28 days. But of course, that is an inherently adversarial process and sees control ceded to a third party – which the DAB does not. If DABs do catch on, it’s likely to be on larger longer running schemes where there is merit in spending time setting up a DAB during the project – it’s hardly worth it for a final account dispute or a small project, where adjudication is likely to be sufficient. There may also be a role for public sector organisations, who traditionally advocate a more collaborative approach, to lead the way. Ultimately we will have to wait and see.