Claim Barred by Florida’s Construction Defect Statute of Repose? Maybe Not. Florida Court Says You Should Read the Construction Contract More Closely

Troy Vuurens | Butler Weihmuller Katz Craig | August 21, 2017

Claim professionals are often reminded that even the most meritorious claim is worthless if not filed within the applicable statute of limitations or statute of repose. In the world of construction defect claims, Florida law provides for a 10-year statute of repose. Under § 95.11(3)(c), the action must commence within 10 years after the date of actual possession by the owner, the date of the issuance of a certificate of occupancy, the date of abandonment of construction if not completed, or the date of completion or termination of the contract between the professional engineer, registered architect, or licensed contractor and his or her employer, whichever date is latest.

Not surprisingly, the parties do not always agree on the specific date that the countdown clock on the statute of repose commenced running. In a recent appellate decision, Florida’s 5th DCA reversed a trial court’s dismissal of a homeowner’s construction defect claim that was filed just beyond 10 years after the closing date on the property. See Busch v. Lennar Homes, LLC, 219 So.3d 93 (Fla. 5th DCA 2017).

In Busch, the defendant had taken the common position that the plaintiff’s claim was barred by the statute of repose because the Purchase and Sale Agreement, i.e. “the contract,” was completed on the date of the closing on the property, which was the latest date applicable under §95.11(3)(c). Therefore, argued the defendant, the claim expired exactly 10 years later and before the complaint was filed. The trial court agreed with the defendant and dismissed the claim upon determination that the contract was completed on the date of the closing, which commenced the running of the statute of repose.

The 5th DCA reversed on appeal and held that the trial court erred in finding that the contract was completed on the date of closing. The court held that a contract is not completed until both sides of a contract have been performed. The court pointed to the “inspection and punch-list clause” of the contract which stated: “Any remaining items that Seller has agreed to correct will be corrected by Seller at Seller’s sole cost and expense prior to closing or at Seller’s option within a reasonable time after closing.” In other words, the court found that the contract was not completed at the time of closing because there were remaining punch-list items that the Seller was obligated to correct. As such, the clock on the 10-year statute of repose did not start ticking until the contract was completed (i.e. when the Seller completed the punch-list items, post-closing).

In the context of residential construction, the closing date is generally the date when the statute of repose commences. It is typically the date on which the homeowner takes possession, final payment is made, and the contract is completed. However, the 5th DCA’s decision in Busch is a reminder that there are other factors to consider as well, including if there is a contractual obligation to complete any remaining work after the closing, such as punch-list items.

It is also worth noting that the defendant in Busch is a large production home builder who likely built thousands of homes with the same contract language. Other builders may have similar clauses incorporated into their contracts, too. The Busch case is an important new decision because of the sheer volume of homes that were likely built with this language. As such, it stands to reason that Florida practitioners engaged in residential construction defect litigation may begin to see these same issues arise in their cases, too. And in all cases where the statute of repose may become a critical issue, a careful analysis of the contract should be undertaken in order to identify similar language.

The Relevance and Reasonableness of Destructive Testing

David Adelstein | Florida Construction Legal Updates | August 12, 2017

Destructive testing is a routine investigatory procedure in construction defect disputes.   The destructive testing is necessary to determine liability (causation), the extent of damage, and the repair protocol.   Destructive testing is designed to answer numerous questions:  Why did the building component fail?  Was the building component constructed incorrectly?  What is the magnitude of the damage caused by the failure? What specifically caused the damage?  What is the most effective way to fix the failure and damage?  There are different iterations to the same questions, but in many instances, destructive testing is necessary to answer these questions.

 

Claimants sometimes prohibit destructive testing.  Of course, destructive testing is intrusive.  In many instances, it is very intrusive.  But, this testing is a necessary evil.  Without this testing, how can a defendant truly analyze their potential exposure and culpability?  They need to be in a position to prepare a defense and figure out their liability.  This does not mean destructive testing is warranted in every single construction defect dispute.  That is not the case.   However, to say it is never warranted is irrational.

 

Florida Statutes Chapter 558 (the pre-suit notice of construction defects process) addresses the issue of destructive testing when parties are participating in this obligatory pre-suit notice of construction defect process:

 

(a) If the person served with notice under subsection (1) determines that destructive testing is necessary to determine the nature and cause of the alleged defects, such person shall notify the claimant in writing.

(b) The notice shall describe the destructive testing to be performed, the person selected to do the testing, the estimated anticipated damage and repairs to or restoration of the property resulting from the testing, the estimated amount of time necessary for the testing and to complete the repairs or restoration, and the financial responsibility offered for covering the costs of repairs or restoration.

(c) If the claimant promptly objects to the person selected to perform the destructive testing, the person served with notice under subsection (1) shall provide the claimant with a list of three qualified persons from which the claimant may select one such person to perform the testing. The person selected to perform the testing shall operate as an agent or subcontractor of the person served with notice under subsection (1) and shall communicate with, submit any reports to, and be solely responsible to the person served with notice.

(d) The testing shall be done at a mutually agreeable time.

(e) The claimant or a representative of the claimant may be present to observe the destructive testing.

(f) The destructive testing shall not render the property uninhabitable.

(g) There shall be no construction lien rights under part I of chapter 713 for the destructive testing caused by a person served with notice under subsection (1) or for restoring the area destructively tested to the condition existing prior to testing, except to the extent the owner contracts for the destructive testing or restoration.

If the claimant refuses to agree and thereafter permit reasonable destructive testing, the claimant shall have no claim for damages which could have been avoided or mitigated had destructive testing been allowed when requested and had a feasible remedy been promptly implemented.

Florida Statute s. 558.004(2).

 

Under this pre-suit process, if a claimant refuses to permit reasonable destructive testing, the claimant shall have no claim for damages which could have been mitigated or avoided had destructive testing been allowed and had a feasible remedy been promptly implemented.  In my opinion, this has very little teeth as it raises too many factual issues such as 1) was the destructive testing reasonable, 2) what damages could have realistically been mitigated and how do you prove this, 3) what is a feasible remedy and how is one to know whether the defendant would have even proposed or implemented a feasible remedy, 4) is the feasible remedy a remedy that mitigates future damage or fully addresses the root of the problem, and 5) what is the quantum of damages that could have been mitigated or avoided.   Establishing the reasonableness of the destructive testing is likely easy as an expert would support this.  But the same expert would have to establish the other requirements as a basis to establish an affirmative defense that some of the claimed damages the plaintiff is seeking could have been mitigated had the claimant allowed pre-suit destructive testing.

 

Oftentimes, however, a defendant wants to undertake certain destructive testing after a lawsuit has been initiated.  What happens if the plaintiff refuses such testing in this scenario?  In a recent products liability case, Westerbeke Corp. v. Atherton, 42 Fla.L.Weekly D1741c (Fla. 2d DCA 2017), a defendant wanted to perform destructive testing on a gas generator that caused an explosion on a boat.  The plaintiff did not want this testing to be performed.   In support of the testing, the defendant relied on a federal district case that applied four factors to consider whether the destructive testing is warranted:

 

1) Whether the proposed testing is reasonable, necessary, and relevant to proving the movant’s case; 2) Whether the non-movant’s ability to present evidence at trial will be hindered, or whether the non-movant will be prejudiced in some other way; 3) Whether there are any less prejudicial alternative methods of obtaining the evidence sought; and 4) Whether there are adequate safeguards to minimize prejudice to the non-movant, particularly the non-movant’s ability to present evidence at trial.

 

Westerbke Corp., supra, quoting Mirchandani v. Home Depot, U.S.A., Inc., 235 F.R.D. 611, 614 (D.Md. 2006).

 

The trial court did not apply these four factors and denied the defendant’s request to perform destructive testing on the gas generator.  On appeal (through a petition for writ of certiorari), the appellate court reversed.  Unfortunately, the appellate court punted without providing specific guidance as to what standard the trial should follow when granting or denying a request for destructive testing.  The appellate court simply held that the four factors above may provide guidance to the trial court, but are not controlling in Florida.  The appellate court further summarily pointed to the Florida’s Rules of Civil Procedure to address the issue:

 

The Florida law regarding discovery in general provides that a party in a civil case is entitled to discover evidence that is relevant to the subject matter of the case and that is admissible or reasonably calculated to lead to admissible evidence. Fla. R. Civ. P. 1.280(b)(1); Allstate Ins. Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995). In addition, “[a]ny party may request any other party . . . to inspect and copy, test, or sample any tangible things that constitute or contain matters within the scope of rule 1.280(b) and that are in the possession, custody, or control of the party to whom the request is directed.” Fla. R. Civ. P. 1.350(a)(2). “The discovery rules . . . confer broad discretion on the trial court to limit or prohibit discovery in order to ‘protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.‘ ” Rasmussen v. S. Fla. Blood Serv., Inc., 500 So. 2d 533, 535 (Fla. 1987) (citing Fla. R. Civ. P. 1.280(c)). We conclude that the trial court departed from the essential requirements of the law in failing to apply the proper discovery standard…..

 

 

The four factors outlined above are reasonable factors that comport with Florida law – whether the testing is relevant to the subject matter of the case. The factors provide guidance as to how to determine relevancy of destructive testing during the course of a lawsuit.  Plus, the court can always impose limitations or restrictions to reduce any intrusion and protect the claimant’s interests while allowing testing to be performed.   By the appellate court punting and not even ruling on whether the destructive testing would be relevant in the underlying action, the court is simply inviting another appeal.

Court Finds That Split in Underground Storage Tank is Not a Covered Collapse

Christopher Kendrick and Valerie A. Moore | Haight Brown & Bonesteel LLP | July 5, 2017

In Tustin Field Gas & Food v. Mid-Century Ins. Co. (No. B268850, filed 7/3/17), a California appeals court ruled that a split in an underground storage tank, caused by the tank sitting on a rock for years, was not a covered “collapse” as a matter of law.

Tustin Field owned a gas station in Palm Springs. The installer of the underground storage tanks did not follow the manufacturer’s instructions to bury them in pea gravel or crushed rock. Instead, the installer just dug a hole, placed the tanks into that hole, and then covered them with “native soil” containing rocks, boulders and other debris.

The tanks were double-walled, steel with a fiberglass sheath. Sixteen years after installation, testing revealed that the fiberglass sheath on one tank was no longer intact. The tank was excavated and the fiberglass sheath was found to be cracked from the tank sitting on a nine-inch boulder. The insured paid to have the crack repaired and made a claim for the cost of excavating and repairing the tank.

The Mid-Century policy generally excluded collapse, but provided “Additional Coverage for Collapse” as follows:

“[Mid-Century] will pay for direct physical loss or damage to Covered Property, caused by a collapse of a building or any part of a building insured under this policy, if the collapse is caused by one or more of the following:… (b) Hidden decay;…(d) Weight of people or personal property;… (f) Use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation. However, if the collapse occurs after construction, remodeling or renovation is complete and is caused in part by [an enumerated] cause of loss…, [Mid-Century] will pay for the loss or damage even if use of defective material or methods in construction, remodeling or renovation, contributes to the collapse.”

The subsection also specified that “Collapse does not include settling, cracking, shrinkage, bulging or expansion.”

Mid-Century denied coverage and in the following bad faith lawsuit, the trial court granted summary judgment to the insurer while denying the insured’s cross-motion for summary judgment.

The trial court concluded that there was no covered cause of loss because there had been no “collapse.” The court ruled that the insured had to show an “actual” collapse, but had failed to submit evidence that the tank “suffered a complete change in structure and lost its distinctive character as an underground storage tank.” The insured had shown, at most, that the tank was no longer usable under storage tank law because its outer sheath had been breached, but “a mere impairment of [the tank’s] structural integrity did not constitute an actual collapse.”

The appeals court affirmed. First, the court rejected the argument that if a structure is not usable it has necessarily collapsed. (Citing Sabella v. Wisler (1963) 59 Cal.2d 21 and Doheny West Homeowners’ Assn. v. American Guarantee & Liability Ins. Co. (1997) 60 Cal.App.4th 400.)

The Tustin Field court also rejected the argument that “substantial impairment of structural integrity” of a building constitutes collapse: “This is incorrect…. California law specifically holds to the contrary, at least where, as here, a policy excludes from collapse ‘settling’ and the like.” (Citing Doheny West, supra, and Stamm Theatres, Inc. v. Hartford Casualty Ins. Co.(2001) 93 Cal.App.4th 531.)

The Tustin Field court went on to reject a claim that ambiguity from the lack of a specific definition for collapse in the policy mandated interpretation in the policyholder’s favor, as well as rejecting the insured’s appeal to public policy.

The Tustin Field court distinguished Doheny West, supra, Stamm Theatres, supra, and Panico v. Truck Ins. Exchange (2001) 90 Cal.App.4th 1294, as all involving a broader meaning of collapse:

“[B]ecause the [Mid-Century] Policy excludes collapse from its definition of Covered Causes of Loss, and then creates a more limited ‘exception to the exception’ that re-extends coverage for collapse-related damage, but only ‘for direct physical loss or damage to Covered Property, caused by a collapse of a building or any part of a building insured under this policy, if the collapse is caused by one or more’ enumerated reasons. Because this revival of coverage for collapse does not include ‘risks of’ collapse (just collapse itself) and because the Policy nowhere covers damage ‘involving collapse,’ the broader definition of collapse discussed in Doheny West, Panico, and Stamm Theatres is inapplicable.”

The Tustin Field court also dismissed the insured’s use of expert testimony as inadmissible for the purpose of contract interpretation, and ruled that even if causation posed a factual dispute, it was not material to the result.

This document is intended to provide you with information about insurance law related developments. The contents of this document are not intended to provide specific legal advice. This communication may be considered advertising in some jurisdictions.

Thinking Beyond the Dispute Resolution Provision in Construction Disputes

Benjamin Pollock | King & Spalding | June 5, 2017

When parties cannot resolve a claim during a major construction project, the contracts dispute resolution provisions do not always need to read as step-by-step instructions. To the contrary, the situation may warrant a different approach that can be negotiated after the dispute arises. While agreement certainly is required to deviate from the contractual obligations which themselves reflect the parties prior and current agreement other options can be considered and proposed whenever they would be beneficial to the Project or parties needs. This article discusses alternative methods by which a resolution to a construction dispute concerning costs or delays can be found in ways not necessarily proscribed by the contracts dispute resolution provisions.

Contracts Do Not Predict Every Situation

As an initial point, by no means is this article suggesting that the contract should be ignored or disregarded. Indeed, the contract provisions should be the embodiment of the good faith negotiations of the parties, often hard-won through sophisticated bargaining. But this does not mean that one size fits all, and the individual situation and claims should be considered when an actual dispute must be managed.

This can be particularly true when circumstances change between the parties, or when the companies develop a business relationship outside of the one specific project. To be sure, the contracts dispute resolution provisions establish the original framework by which the parties are to resolve disputes arising from construction of that individual project. But the realities can change when those companies subsequently enter into additional contracts regarding multiple projects, or agree to an Operation and Maintenance Agreement that binds them to each other at the same site for multiple years following completion. Suddenly, the prospect of filing for arbitration over the one construction dispute can become a challenging or unacceptable option. Indeed, preserving the relationship and maintaining peace may prove more valuable than escalating a dispute to a jury or an independent panel. And with arbitration or litigation seen as a last-ditch option, the parties may do well to think beyond the contracts instructions in order to get the dispute resolved.

Conditions Precedent Can Be Mutually Waived or Changed

In many ways, a contracts dispute resolution provision can be seen as the designation of the ultimate deciderarbitrator, judge, or juryand a series of conditions precedent that must be followed before reaching the final stage. These conditions serve various purposes, like promoting party communication in an attempt to avoid costly litigation, or ensuring notifications are being effected internally at appropriate levels of management. These interim steps can include formal notice, a mediation or other non-binding proceeding, various waiting periods, and/or a meeting between management personnel. When a particular dispute reaches impasse, however, these actions may not always serve their intended purpose. In such scenarios, the contract provisions do not always need to be strictly adhered to, but instead should be evaluated for their perceived effectiveness under the circumstances. When it serves both parties or the Project to take different action, consider seeking a mutual agreement to waive or adjust certain of these conditions.

Take waiting periods. It is not uncommon for a contract to mandate that arbitration cannot be filed until a certain number of days after a formal notice letter is served (or other triggering event). But what if the dispute is impacting critical path activities, and a quick resolution would allow the parties to mitigate the impact or at least would provide the parties more certainty regarding the risks of a situation already affecting cost and schedule? As an initial matter, the owner may do well to instruct the contractor to continue working, or enter into a temporary agreement that maintains Project progress while the claim is addressed. But in this scenario, both parties may wish to consider waiving the required waiting period and submitting the dispute on an expedited schedule. Similarly, both sides may benefit from adding strict time limits on the selection process of nominating one arbitrator eachwho then nominate a chairpersonor even forgoing this timely process in favor of selecting a single fact-finder.

Another example is mandatory meetings between managers. Sometimes it may be patently obvious that certain disputes will not be resolved at such meetings. Perhaps the representatives designated by the contract have personality conflicts, the parties positions are extreme and irreconcilable, or the contemplated meeting would present other challenges that may actually exacerbate the situation. If the parties are entrenched in their positions, more might be at stake than a waste of time and resources: ill will can result if one party believes the other is not participating in good faith. In certain circumstances, a discussion by the designated persons about the dispute can do more harm than good.

Agreeing not to hold such a meeting is an option, although generally speaking, parties engaging in discussion before launching litigation is a good thing. If the contract requirements do not create an environment for success, they can be tweaked. Notwithstanding contractual restrictions on attendees, the parties can agree to select personnel best suited to attend, usually so long as there is someone present with decision-making authority. The presence of a mediator, expert, or third party neutral to facilitate discussions and offer opinions can be considered, regardless of whether the contract requires such a presence. And rather than meeting to discuss the merits of the disputewhich likely is encapsulated already in opinionated change documentation and argumentative claims letterscommercial settlements can be discussed instead. Indeed, such proposalsbonus milestones, additional resources, overtime, changes to the payment schedule, etc.may resolve the dispute without having to discuss, much less decide, the contentious issues, and can also benefit project progress itself. In these ways, parties can still hold the required meeting but tailor it to best position themselves for success.

Conclusion

A dispute resolution provision identifies the final arbiter of a dispute and contains other requirements meant to facilitate discussion and negotiation so that litigation can be avoided. Sometimes, however, the specific provisions will not best serve those purposes. In these situations, prudent parties will study the contracts requirements but also consider options that might more effectively resolve the particular dispute at issue, get the project back on track, and improverather than harmthe business relationship. Rather than view the various required stages as items on a checklist, parties can agree to waive or alter certain provisions and thereby adopt a procedure that may better facilitate resolution the specific dispute.

Hard To Handle

Brian L. Hill | Construction Law Musings | June 30, 2017

For the better part of twenty years, I’ve had a front row seat to over 1,000 construction lawsuits, claims and other disputes. Whether it is allegations over defective design, manufacture or installation, or claims of delay or cost overruns, or related to injuries, death, or even diminished value, there are some clear trends and patterns that have emerged over the years. The past decade in particular has seen sweeping changes to the nature of construction claims and disputes, and as a result, many veterans in the legal, insurance claims and expert services arena have struggled to adapt.

In this article, I will share some of the trends and insight I have picked up on from working with some of the top professionals in the industry when it comes to handling the increasingly complex nature of construction claims and disputes.

Single-family residential lawsuits involving dozens or hundreds of homeowners in a single tract, which at one point represented the bulk of claims in terms of both quantity and dollar value, are much more rare than ever before. The answer to why that is should be readily apparent to most: America’s home building productivity screeched to a halt during the recession and has yet to resume to previous levels. Similarly, condominium and other multifamily for sale projects just haven’t been in vogue for a decade, so we don’t see nearly as many lawsuits and claims involving homeowner associations as we used to.

Apartments, hotels, schools (K–12, and higher ed), governmental facilities, medical facilities, office buildings, skilled nursing and assisted living facilities, and other nonresidential projects are examples of the types of projects that are involved in disputes more often in recent history. Looking at that list, a common theme emerges — these are all more complex project types.

Not only that, but the stakeholders involved in these types of claims tend to have a lot more at stake, in addition to having the resources to retain top representation. The stakeholders themselves are more complex, often with sophisticated organizational structures, sometimes even involving foreign entities. For instance, one trend that insurance carriers are reporting is that more and more claims are coming forward on projects involving EB–5 Visa money.

Since insurance carriers are the entities that most often end up funding various claims, disputes and their ultimate resolution, you can be sure that insurance policy language is evolving in response to the new trends as well. Unfortunately, this means that the already high self-insured retention (SIR) requirements of many policies is only getting higher. (In case you don’t know, the SIR is like a deductible in that as an insured, your coverage doesn’t kick in until you’ve satisfied the SIR. Some publicly held builders have SIRs of $10-million.)

Because of the high SIRs, claims adjusters rarely have much if any involvement in a claim’s early stages, when early resolution is most beneficial to all parties. Another factor complicating the insurance coverage issue in today’s construction claims world is that even with the high SIRs, unless an actual lawsuit is filed, there may not be a claim for the carrier to respond to. That is a situation that can occur in an active construction project where a claim exists in absence of filing suit, or — in an increasingly common scenario — in a state where “right to repair” laws require certain criteria be met prior to actually filing a lawsuit that would trigger coverage.

The other “gotcha” that comes with the right to repair laws is that it can be extremely difficult to obtain a full release of liability in return for making repairs. Plaintiff counsel are reluctant to grant full release unless both the repair methodology and scope meets their experts’ requirements. In response, defense counsel are often reluctant to recommend their clients undertake repairs, congnizant of the additional risk that may result, without any guarantee of release of future liability.

How Best to Manage Complex Construction Claims and Disputes?

The increasingly complex nature of modern construction claims and disputes demand a completely different skill set and level of analysis in order to achieve resolution. That applies not only to the legal team, but also to the designated team of technical experts required to make sense of various claims.

With regards to the legal team, multiple layers of representation are often required, and that goes for both the plaintiffs, defendants and cross defendants. Sure, a solid understanding of contracts and construction practices is an obvious prerequisite. But you’ll also need someone on the team that has intimate knowledge of your state’s applicable legislation and case law as it applies to design and construction.

An essential resource that is needed on most cases I’ve been involved with is coverage counsel — an expert on your state’s insurance coverage policies and interpretations, with real world experience litigating such issues. One piece of advice I hear frequently is to also make sure that you have a strong line of communication with key decision makers for the parties you are representing and make sure those decision makers show up when required. (Too many cases drag on, with millions of costs/fees wasted, all because a representative of the carrier with proper signing authority failed to show up to a mandatory settlement conference, for example.)

Another critical aspect to managing complex claims and disputes is having the right technical experts, consultants and specialists on hand, as needed. Sometimes the choice of what type of expert is obvious, but not always. For example, if you are representing the architect or engineer, you obviously want an expert on standard of care for that profession, but you might also want to consider bringing in an expert on construction management standard of care to evaluate the design professional’s relationship with the rest of the team. You also need specialty experts, available on an as-needed basis, to answer the specific highly technical issues that will inevitably come up during the process.

Economic loss is often barred as a cause of action in claims involving one’s personal residence, but as more nonresidential projects end in dispute, the possibility of economic loss may become a factor. We’ve seen this come up in delay claims more commonly in recent years. Having an economic loss expert, in addition to an expert on estimated construction costs, has proven invaluable in some of those situations.

Of course there are some other economic realities that need to be considered when handling complex construction claims and disputes, such as the cost of these wonderful legal and technical experts that have now become critical. Whether you are working on behalf of the owners, the designers, the contractors, or some other party, the more manageable the costs, the happier your client will be, and the more likely you’ll get future assignments and referrals.

The biggest cost factor by far that we see in today’s claims and litigation world involving the built environment is dealing with the massive volume of evidence. In a single family home tract, besides the drawings and subcontracts, you aren’t going to typically find too much data to go through. On a $125-million mixed-use high rise however, you could easily find yourself with hundreds of thousands of documents. What’s worse is that those documents might be in hard copy spread amongst dozens and dozens of bankers boxes, or scanned into massive monolithic PDFs each containing thousands of pages, or even scanned into individual files per each page. And of course rarely are any of these document repositories ever well organized. The key is to retain a consultant or expert on document management to reduce wasted and duplicative effort on the part of your entire team.

What you don’t want to have happen is to have one of your experts miss a critical piece of evidence because they either weren’t provided with the document (in an attempt to reduce costs) or worse, because nobody knew the document existed. Having the right document on hand, at just the right moment, has been decisive in many cases I’ve worked on over the years. A six-figure cost for document management isn’t unwarranted in a high-stakes, bet-the-company claim when tens of millions of dollars are at stake.

Perhaps the most important factor in reducing the incredible cost of today’s complex construction claims and disputes comes down to plain old good project management. No one single person or even party can handle 100% of a complex claim. It is a collaboration between multiple lawyers, their staff, experts, consultants and others. Just like on an actual construction project, communication is key. Maintaining strict protocols for communication to ensure that what’s privileged remains so, while keeping everyone informed of what they need to know, is a dance that is not for the faint of heart.

What’s Next?

Just as the design and construction of the built environment has evolved greatly over the past several decades, so too has the handling of the claims and disputes associated with it. Two decades ago when I first started out in forensics, we took pictures on actual film, took notes using paper on clipboards, and stored our project case files in so many three-ring binders. Nowadays, we use digital cameras and tablets, and have terabytes of data stored in secure encrypted private clouds.

Some of the upcoming trends I see:

  • An increasing percentage of claims will be resolved in mediation and/or alternative dispute resolution, and outside of the courtroom
  • More claims related to occupant health and indoor environmental quality can be expected
  • Failure to achieve certain sustainability goals or incentives will become a cause of action in more jurisdictions
  • Operations and maintenance of facilities will play a larger role in building performance, and will thus come into play more in future claims
  • Insurance technology, particularly enhanced through artificial intelligence, will be greatly beneficial to the carriers, less so for insureds
  • As BIM and other collaborative construction technologies become more mainstream, the need for digital forensics will become more critical in e-discovery
  • Drones, robots, LiDar, 3D scanning, Infrared, and other advanced technologies will facilitate more advanced and less costsly/risky investigations

The one key factor that I have seen proven time and time again for handling complex construction claims and disputes is agility. Bamboo’s strength comes from its flexibility. By adapting and adjusting your approach to a given situation, and perhaps most importantly, by actively listening to opposing parties, even the most complex and contentious of claims can be resolved with minimal wasted expense.