In the United States, $1.16 trillion is spent annually on construction projects. Construction makes up 10 percent of our Gross Domestic Product and nearly 8 percent of our workforce nationally. And as we can see here in Jacksonville, residential and commercial construction continues to increase at a furious rate.
With so much construction taking place and so many people involved, conflicts are virtually unavoidable. Disputes over specific responsibilities, budget concerns and project deadlines not only delay progress, they can drain funding. According to a study cited by the International Institute for Conflict Prevention & Resolution, the average cost for resolving a dispute via mediation was $1.167 million. For a fraction of the cost, companies are choosing to utilize a dispute resolution board to solve conflicts during the course of their projects. A Jacksonville contractor lawyer can be instrumental in this process by procuring members of this board or serving on it. In part one of this article, we will explain what a dispute resolution board is and the types of professionals who serve on them. You can also skip to Part 2 to learn how these boards work and their benefits.
What is a Dispute Resolution Board?
A dispute resolution board is a group of construction industry professionals who hear disputes from those involved in the project and make recommendations to resolve them. The board members do not have an ownership stake in the project and are not involved in any way. Dispute resolution boards were first used during the construction of the Eisenhower Tunnel, outside of Denver, CO. The board settled a number of disputes throughout construction and, subsequently, became the standard for large road construction projects.
Who Serves on a Dispute Resolution Board?
Dispute resolution boards are often comprised of an odd number of people, three is the standard number. This group is completely impartial and consists of construction professionals with a technical background (architects and engineers), people who have worked on many projects and attorneys in the construction industry. One of the positives of having Jacksonville construction lawyers involved in the project is that many disputes, even technical ones, involve a legal element.
When forming a dispute resolution board, the American Arbitration Association suggests that the owner and general contractor select one member each and that those members select the third member.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.