Imagine This Scenario...

You’re deep into a construction project, and tensions are starting to rise. The employer and contractor are at odds over the interpretation of a key contract clause. Both sides are digging their heels in, and you, as part of the Dispute Board (DB), are being drawn into the conflict. What’s the next step? Should you intervene, or wait until things escalate further?

Luckily, the DB process offers tools like informal assistance and informal opinion that can step in well before a formal dispute takes shape. These tools are designed not only to help parties navigate disagreements but also to avoid disputes altogether. Let’s explore what these terms mean and how they can be effectively used to keep projects on track.

What Is Informal Opinion? A FIDIC Tool for Clarity

In the FIDIC framework, informal opinion is a non-binding tool that can only be given if both parties jointly request the DB to offer their perspective. It’s particularly helpful when there’s a disagreement over the interpretation of a contract clause. The DB provides an informal, neutral opinion that helps clarify the issue without escalating it into a formal dispute.

However, it’s important to note that once the DB has provided its informal opinion, it is not binding on either the parties or the DB itself. The parties are not obliged to agree with or follow the opinion, and if the matter later becomes a formal dispute, the DB is not bound by its earlier opinion. The DB has the flexibility to deviate from the informal opinion if new or additional information comes to light, making it prudent to adjust its stance in a formal decision.

For example, let’s say there’s a disagreement over a contract clause regarding payment schedules. Both parties ask the DB for an informal opinion. The DB provides an opinion, but the issue isn’t fully resolved, and later, the dispute escalates. If new information surfaces during the formal dispute resolution process, the DB can adjust its decision accordingly.

Additionally, although the DB cannot provide an informal opinion without a joint request, they may offer a subtle suggestion as part of informal assistance, for instance, by saying, "If you were to ask me…" This allows the DB to guide the parties toward seeking an informal opinion, thereby supporting dispute avoidance.

Informal Assistance: A Proactive Coaching Tool

Informal assistance is a tool initiated directly by the DB. It’s a hands-on, coaching approach where the DB helps the parties navigate their differences and find their own solutions through various techniques that encourage understanding and collaboration.

One effective example is reframing. The DB helps the parties shift their perspective on an issue to explore new ways of resolving it. For instance, if a discussion around project costs becomes contentious, the DB could reframe the conversation, encouraging the parties to focus on the long-term project goals: “How might these additional costs now improve the quality and timing of the final outcome?” This approach opens up new possibilities and prevents the discussion from being trapped in negativity.

Another valuable tool is the use of facilitation techniques. The DB helps structure the conversation by setting a clear agenda and ensuring that the parties focus on the most critical points. For example, the DB may assist in prioritising issues, ensuring that the most pressing matters are addressed first, thereby preventing conflicts from escalating. This structured facilitation helps keep the discussion on track and fosters constructive collaboration.

By applying such techniques, the DB can defuse potential conflicts before they become formal disputes, while also strengthening the working relationship between the parties.

When Should You Use These Tools?

Whether you’re a seasoned DB practitioner or new to the role, it’s essential to know when and how to use these informal tools. Here are a few scenarios to consider:

• Early Contractual Interpretation Issues: If parties disagree on the meaning of a contract clause, suggesting an informal opinion can provide clarity without escalating the situation.
• Ongoing Project Tensions: When you sense that small issues are brewing into larger conflicts, informal assistance can act as a pressure release valve, giving the parties the tools to address problems themselves.

By knowing how and when to use these methods, you can guide the project team toward resolution and prevent disputes from derailing the project.

Why Informal Tools Matter: A Practical Perspective

While both informal opinion and informal assistance serve different functions, their shared goal is clear: to support dispute avoidance. By helping parties find clarity or guiding them through their challenges, you’re doing much more than just resolving disputes—you’re preventing them.

And prevention is the key. In large construction projects, even minor delays or misunderstandings can snowball into major issues. By using these informal tools early, a DB plays a proactive role in keeping the project on track. So, whether you’re offering a neutral opinion on a contract clause or coaching the parties to reach their own solution, you’re helping to keep everything running smoothly.

Final Thoughts: The DB’s Power to Prevent, Not Just Resolve

Dispute Boards are often seen as reactive, stepping in only when issues escalate into formal disputes. But with tools like informal opinion and informal assistance, DBs can be proactive forces, preventing conflict before it even arises. And that’s the true power of a well-functioning DB: not just to resolve disputes, but to keep the project flowing without disruption.

So next time you’re in that meeting room, and the tension starts to build, remember—you have more tools at your disposal than you might think.