Efforts to Manage Disputes in the Construction Industry: A Comparison of the New Engineering Contract and the Dispute Review Board

Abstract

The construction industry has been plagued with an increasing number of claims and high litigation costs. How do we reduce conflict and litigation in the construction process? On one hand, leaders of the construction industry in the United States (US) focused their efforts on improving alternative dispute resolution mechanisms. For instance, the American Society of Civil Engineers has introduced the Dispute Review Board (DRB) as a complementary provision to standard US construction practices. The establishment of the DRB to solve construction disputes on the job, avoid claims, and reduce project costs has proven considerable success. On the other hand, construction industry leaders in the United Kingdom (UK) have focused some of their efforts on improving general contract conditions. The Council of the Institution of Civil Engineers of the UK has introduced the New Engineering Contract (NEC) to the construction industry as an alternative to presently used contracts. The NEC proposes to be an innovative, non-adversarial mechanism to resolve disputes on the job, avoid and reduce claims, and to assuage rising litigation costs in the construction industry. It too has proven considerable success in its efforts. This research concentrates on the DRB and the NEC as attempts by construction leaders to modernize and improve construction practices. In summary, the research compares the success stories of the DRB and the NEC as approaches to combating the adversarial nature, increasing number of disputes and rising litigation costs in the construction industry. The main conclusions ascertained in this research are as follows. Despite coming from similar business environments, construction industry leaders in the US and the UK embarked on different methods to address the issues plaguing the industry and to improve construction practices. Both in the US and the UK, construction leaders were mostly influenced to proactively seek and implement change in construction practices by experts from within the engineering and construction industry vanguard. The undertaking of these changes have shown similar success stories and the results have produced substantial impacts on the construction process. In conclusion, the efforts of construction leaders to implement the DRB and the NEC have provided effective mechanisms in improving communication and relations, and managing disputes in a timely fashion at the job site level.