Recent publications shared across the construction industry reveal an underlying optimism surrounding the dispute resolution regime in the new AS4000-2025 australian standard contract, perhaps as a potential driver of cultural change in the industry.
The flexibility offered by the new regime was already, in the most part, adopted in various amended and derivative contracts (i.e. modified australian standard contracts) already in use, perhaps with the exception of the adoption of a Dispute Avoidance Board (DAB).
The primary role of the DAB is said to be to avoid or prevent issues becoming disputes and to facilitate resolution of issues. In this context, the composition of the members of the DAB are critical to its effectiveness, requiring members of the DAB to 'cover the field' with relevant technical, legal and quantitative professional skills.
On its face, adoption of a DAB as a dispute resolution or avoidance option (at least from a cost perspective) appears only suited to larger scale and infrastructure projects, where budgets can accommodate an additional layer of ongoing independent oversight and management. For smaller value projects (say below $40 or $50 million), the ongoing costs of a DAB may be difficult to justify.
The decision-making rules under a typical DAB Agreement appear to invite the “business as usual” involvement of the parties’ legal representatives, attending conferences and formulating written submissions to the DAB, like that adopted for security of payment and arbitration processes.
However, there appears to be an advantage in the variety of terms that can be adopted under an amended or "stylised" DAB Agreement to regulate the functions of the DAB, including its decision-making process. These terms can avoid the unnecessary time restrictions on DAB decision-making like those placed on adjudicators and participants under security of payment legislation.
As a result, there can be more flexible approaches to DAB decision making functions, including by allowing further time for consideration of expert opinion, or to undertake further investigations and conferences where required.
This, against a background of regular involvement by monthly or bi-monthly meetings of the DAB for the duration of the project, and DAB members with a broader set of relevant professional skills, generally lends itself to a greater capacity for better informed decision making.
The practical benefits and limitations of DAB’s and how they operate (and in what project scenarios) will take time to reveal, however Troy Legal agrees, there may be room for quiet optimism until then.
Julian Troy is founder and director at Troy Legal. With over 23 years experience in construction law, Julian cuts to the real issues and provides simple and effective advice to construction businesses across SEQ and Australia.
Troy Legal supports principles, owners, consultants, contractors, subcontractors, and suppliers in SEQ with contract reviews and contract advice. For tailored advice and guidance in relation to your construction contract, reach out to Troy Legal today. Call Julian on 0439 207 579.
Recent publications shared across the construction industry reveal an underlying optimism surrounding the dispute resolution regime in the new AS4000-2025 australian standard contract, perhaps as a potential driver of cultural change in the industry.
The flexibility offered by the new regime was already, in the most part, adopted in various amended and derivative contracts (i.e. modified australian standard contracts) already in use, perhaps with the exception of the adoption of a Dispute Avoidance Board (DAB).
The primary role of the DAB is said to be to avoid or prevent issues becoming disputes and to facilitate resolution of issues. In this context, the composition of the members of the DAB are critical to its effectiveness, requiring members of the DAB to 'cover the field' with relevant technical, legal and quantitative professional skills.
On its face, adoption of a DAB as a dispute resolution or avoidance option (at least from a cost perspective) appears only suited to larger scale and infrastructure projects, where budgets can accommodate an additional layer of ongoing independent oversight and management. For smaller value projects (say below $40 or $50 million), the ongoing costs of a DAB may be difficult to justify.
The decision-making rules under a typical DAB Agreement appear to invite the “business as usual” involvement of the parties’ legal representatives, attending conferences and formulating written submissions to the DAB, like that adopted for security of payment and arbitration processes.
However, there appears to be an advantage in the variety of terms that can be adopted under an amended or "stylised" DAB Agreement to regulate the functions of the DAB, including its decision-making process. These terms can avoid the unnecessary time restrictions on DAB decision-making like those placed on adjudicators and participants under security of payment legislation.
As a result, there can be more flexible approaches to DAB decision making functions, including by allowing further time for consideration of expert opinion, or to undertake further investigations and conferences where required.
This, against a background of regular involvement by monthly or bi-monthly meetings of the DAB for the duration of the project, and DAB members with a broader set of relevant professional skills, generally lends itself to a greater capacity for better informed decision making.
The practical benefits and limitations of DAB’s and how they operate (and in what project scenarios) will take time to reveal, however Troy Legal agrees, there may be room for quiet optimism until then.
Julian Troy is founder and director at Troy Legal. With over 23 years experience in construction law, Julian cuts to the real issues and provides simple and effective advice to construction businesses across SEQ and Australia.
Troy Legal supports principles, owners, consultants, contractors, subcontractors, and suppliers in SEQ with contract reviews and contract advice. For tailored advice and guidance in relation to your construction contract, reach out to Troy Legal today. Call Julian on 0439 207 579.
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