THE POTENTIAL (SECOND) DEATH OF PROJECT LABOR AGREEMENTS

The back-and-forth over project labor agreements (“PLAs”) continues during the second Trump Administration. These pre-hire collective bargaining agreements generally set the terms and conditions of employment for a specific project and have been the subject of several executive orders dating back to the early 1990s. The executive orders have varied between a complete prohibition of the PLA requirement by President George H.W. Bush in 1992 to a mandate that agencies include PLAs with labor organizations in all government construction contracts exceeding $35 million by President Biden in 2022. Although President Trump has issued several executive orders since taking office in January, he has not specifically addressed the continued tug-of-war over PLAs. However, federal agencies and courts have redrawn the lines for PLAs, leaving the construction industry waiting for further guidance.

The first domino fell when the United States Court of Federal Claims issued a ruling in MVL USA, Inc. et al. v. United States, 174 Fed. Cl. 437 (U.S. Ct. Cl. 2025). Here, 12 large construction contractors filed pre-bid award protests, challenging federal agencies’ authority to mandate that prospective bidders enter PLAs to be considered eligible for award of federal construction projects exceeding $35 million, allegedly in violation of the Competition in Contracting Act (“CICA”), as based on President Biden’s Executive Order and Federal Acquisition Regulation (“FAR”) implementing the Executive Order. In its decision, the court struck down President Biden’s executive order. The Federal Claims Court held that the PLA mandate violated the CICA’s full and open competition requirement. It further held that the mandate violated the CICA because it allows agencies to reduce competition to PLA-contracts, a limitation that has no relation to the substance of the solicitation or performance at issue. The court also that that the agencies’ decisions to proceed with PLAs as a mandate based solely on a President’s policy were “arbitrary and capricious.” Since this decision was rendered in late January, some federal agencies have begun adopting policies consistent with the court’s rationale.

In response to the MVL decision, the Department of Defense (“DoD”) issued a class deviation addressing PLAs. In this February 7, 2025 ruling, the DoD stated that contracting officers shall not use PLAs for large-scale construction projects. The DoD also required contracting officers to amend solicitations to remove PLA requirements, including any solicitation provisions and contract clauses prescribed at FAR 22.505. The DoD’s new policy effectively nullified President Biden’s Executive Order for all DoD construction projects.

Unlike the DoD’s class deviation, the General Services Administration (“GSA”) revised its approach to PLAs with a class exception. Instead of nullifying the FAR, the GSA treated the FAR as operative and implemented an exception to the PLA requirement found within the FAR. The GSA’s class exception applies only to Land Port of Entry (“LPOE”) construction projects. This exception meets the requirement of FAR 22.504(d), and states that requiring a PLA on LPOE projects would not advance the Federal Government’s interests in achieving economy and efficiency in Federal procurement. The class exception is based on the need for LPOE modernizations and is of compelling urgency, making a PLA impracticable.  

Following the two separate approached by the DoD and GSA, the United States Department of Veterans Affairs (“VA”) announced the reversal of President Biden’s policy through a class deviation. The VA’s FAR Class Deviation Memorandum released on February 20, 2025, cites the change in policy addressed in the MVL decision. In its memorandum, the VA forbade contracting officers from using PLAs for large-scale construction projects as implemented in FAR 22.5 and 36.104(c). The memorandum also struck down the notice requirement for PLAs set forth within FAR 52.222-33 and PLAs as set forth in FAR 52.222-34.

Although President Trump did not modify President Obama’s executive order and maintained the policy of encouraging agencies to consider requiring PLAs during his first term, many expected President Trump to rescind President Biden’s PLA order immediately during his second term. Instead, the rescission has come from the courts and federal agencies. Thus far, three federal agencies have specifically addressed PLAs on large-scale federal construction projects. The DoD and the VA issued class deviation memorandums, whereas the GSA issued a PLA exception waiver within President Biden’s FAR rule. All other federal agencies are still subject to President Biden’s PLA order. However, if these agencies are an indication of anything, it seems apparent that PLA requirements are set to die under this administration.

Contractors on federal projects must understand the current state of PLAs before submitting bids for these projects. With the exception of the DoD, the GSA, and the VA, contractors must continue to comply with the PLA requirements for federal projects because as they remain in full force and effect. Contractors must also recognize that the bidding process, and the project itself, may be delayed as the federal agencies work to address bid specifications requiring PLAs. Furthermore, there is no indication that these policies affect ongoing federal projects. Until additional guidance is released, contractors must be familiar with PLA requirements and adhere to President Biden’s 2022 mandate.

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Author and Editor W. Tyler Lloyd is an attorney in Stites and Harbison, PLLC's construction group in Louisville, Kentucky. Tyler represents owners, general contractors and subcontractors in all phases of construction projects, including contract negotiation and conflict resolution. Tyler can be contacted at tlloyd@stites.com. 

Neighborly Disputes: The Risk Urban Development Presents to Adjacent Properties

More and more new construction is occurring within confined, urban sites which are adjacent to neighboring buildings. These existing buildings, often of older construction, can be easily damaged by nearby construction activities. The construction activities most likely to damage an existing building can be best remembered by an acronym I just coined: DUDED, as in, “This construction project is all DUDED up in risk.”  DUDED stands for:

Support of excavation (soldier piles with timber lagging and tiebacks)
at a site in Long Beach, CA.  Photo credit: Rupert Price (SOCOTEC).    

• Demolition
• Underpinning
• Dewatering
• Excavation
• Drilling/Driving

The damages and risks associated with these activities described below are general and not intended to be comprehensive.

• Demolition and drilling/driving activities can cause excessive vibrations. The resulting damages, depending on the intensity of vibrations, can range from minor cracking in delicate plaster finishes to significant cracks in masonry walls. When cracks develop in the building envelope, water may infiltrate into the interior vastly increasing the extent of damage.
• Demolition is of particular concern when the building being demolished shares a party wall with the neighboring building.  In those cases, care must be taken to ensure the stability and integrity of the remaining party wall or risk collapse. 
• Drilling caissons is considered the more delicate operation compared to driving piles, a process in which the pile is hammered or vibrated into the ground. However, both drilling and driving send vibrations through the soil, which can cause them to shift and consolidate resulting in settlement of the adjacent building especially if prior soil loss has occurred.  Differential settlement will cause a building to crack and/or lean.
• Excavations extending below the depth of the adjacent building’s foundations can cause that building to be undermined and at risk of collapse.
• To prevent that, some sort of support of excavation (SOE) is required. This could be a secant pile wall, soldier piles with timber lagging, or underpinning discussed in more detail below.  SOE supports are driven or drilled along the perimeter of the excavation, which in these cases is abutting an adjacent building. They generally need to be braced laterally, either by rakers extending inward into the site or with tiebacks drilled into the soil or rock below the adjacent property. Rakers can be cumbersome to work around and require sequencing of construction activities around their eventual removal, so sites generally prefer to use tiebacks. The process of installing SOE can damage the adjacent property. Additionally, if the SOE is not designed or installed adequately, it can shift laterally causing the soils below the adjacent property to become loose.  The exterior wall of the adjacent property may settle and shift causing the building to crack and/or lean. 
• Underpinning is considered riskier than other forms of SOE. It is the process of extending an existing building’s foundation deeper into the ground by digging small pits that temporarily expose portions of the soil supporting the building’s foundations. The advantage of underpinning is that it allows the excavation and new construction to extend to the lot line.  However, the underpinning is installed directly below the adjacent building’s exterior wall and some shifting of this wall may occur during the installation of underpinning. This could cause the building to crack and/or lean. It is also not uncommon for soil loss to occur in the process. Depending on how sensitive the structure is, soil loss during underpinning may cause settlement of slabs on grade and interior walls constructed on shallow foundations.
• Dewatering can compound the problem. A site must be dewatered if it has a water table higher than the lowest excavation depth. When a site is dewatered, the adjacent properties are also dewatered. When the groundwater is sucked out, sometimes the soil below the building gets sucked out along with it. And that soil, as previously discussed, is important. 

Damage to adjacent properties can result in costly repair, extensive delays, and sometimes even the evacuation of the adjacent property and the permanent abandonment of the development site. 

Disputes between the development property and the adjacent property owner can commence before construction starts and continue well after construction has been completed.

1. The disputes begin with the negotiation of the access agreement.  A confined construction site will often require access to the adjacent properties.  Permission from the adjacent property owner is needed if underpinning and tiebacks are to be installed below grade within its property lines.

In some jurisdictions, such as New York City, the building department requires various protections for adjacent buildings including performing a pre-construction survey, installation of roof protection, and installation of various monitoring devices on the adjacent properties. The adjacent property owners can negotiate the terms under which access will be granted to developers to fulfill these requirements.

This is the adjacent property owner’s opportunity to insist on enhanced protective measures to prevent damage to its property and dictate how damage is addressed.  The construction site will want to use the access to document all pre-existing damage to differentiate it from any new damage occurring during construction.

If the negotiation fails, the construction site can file for an injunction, but it may not be granted access to install underpinning and tiebacks.

Unfortunately, most construction sites do not at this stage develop a full understanding of the interior structure, the implications of the pre-existing damage, and the specific risks associated with this adjacent building. Do the signs of pre-existing settlement mean that the soils below the building are more susceptible and likely to move during drilling operations? Does the building have an inadequate lateral system that would make it more likely to lean and become destabilized?  Would cracking or sloping of the slab on grade create an operational issue for a manufacturing facility that might result in shutdown and incur significant downtime costs?

2. Disputes continue through construction with complaints of damage and the enforcement of the access agreement.  The adjacent property owner may complain of excessive vibrations, crack development, and other damage occurring throughout DUDED construction activities.  If the damage is severe, the Department of Buildings (DOB) may get involved and issue a stop-work order.  The DOB, however, will generally only act if there is a code violation or safety hazard, meaning it will not stop work because of non-hazardous damage to the adjacent structure. The battle related to non-hazardous damage is best waged by attorneys who should insist on the enforcement of the terms negotiated in the access agreement, which likely included terms requiring the site to alter its means and methods if established thresholds have been exceeded. 

When resolved amicably, the contractor will immediately repair the damage it causes and take actions to reduce further damage.

The general contractor, however, will be concerned about meeting its schedule and the delay impact on all its subcontractors.  The general contractor will want to push forward with construction without considering the cost implications of continuing to damage the adjacent structure.

3. Insurance claims, mediation, and litigation will continue long after the construction has been completed if the damages are not addressed amicably during construction.  If the damage is covered by the adjacent property’s property insurance policy, the owner will submit a claim to its insurance company.  Its insurance company will file a subrogation claim against the parties involved in the new construction.

If the owner does not feel it is being adequately compensated by its insurance policy, it may also directly sue the parties involved in the adjacent construction.  Those parties usually include the developer, the general contractor, and each subcontractor involved in the DUDED activities.  Those parties will issue claims to their general liability insurance carriers, and each insurance carrier will be involved in the dispute.  The room quickly fills with lawyers and experts disputing the cause and cost of the damages incurred.

At the outset, they will compare the pre-existing conditions to the current conditions to establish what damage occurred during construction. However, the case gets more complicated when multiple parties performed potentially damaging activities within the timeframe during which the damage occurred. 

To navigate these disputes, you’ll need an engineering expert to review plans, advise on appropriate thresholds for the various monitors, interpret and assess the recorded movements and observable damage, and should litigation ensue, write a comprehensive cause and origin report and possibly testify. A good engineer can help you de-dud your DUDED project. 

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Author Joelle Nelson is a forensic engineer with 20 years of structural engineering experience in SOCOTEC’s New York office. Joelle has experience in the investigation of major structural collapses, wind-related failures, and crane collapses. She can be contacted at joelle.nelson@socotec.us.

Editor-in-Chief Marissa L. Downs is a construction attorney in Chicago, Illinois where she has been practicing law since 2009. Marissa is a partner at Laurie & Brennan, LLP and represents owners, general contractors, and subcontractors in all phases of project procurement, claim administration, litigation, and arbitration/trial. Marissa can be contacted at mdowns@lauriebrennan.com.

Changing Your Mind, for Whatever Reason – Terminating a Construction Contract for Convenience in Florida

Owner: “You're FIRED!  Please remove all equipment and leave the premises.”

Contractor: “You can’t do that. We signed a contract and have done everything that has been asked – we are performing ahead of schedule, under budget, and the work quality is superb.”

Owner: “Yes, but another company can do it cheaper and the contract we entered into has a termination for convenience provision.”

This scenario is a common one in private and public construction in Florida. When building in Florida, you may encounter a contractual provision that allows the owner or general contractor to terminate a contractor’s work “for convenience.”  What this means is that, depending on the language of the contract, one or both parties in a construction contract may have the right to terminate the agreement even in the absence of fault or breach by the other party, hence the name “termination for convenience,” or “T4C.”  The reason could be that the owner found someone cheaper, that the owner or general contractor is simply not satisfied with a contractor’s work, circumstances changed, such as budget constraints, changes in project or scope, or shifts in business priorities, or for various reasons other than a default or breach of the contract. Understanding termination for convenience is critical for both contractors and project owners, as its financial and legal consequences can be significant.

In Florida, termination for convenience provisions are generally enforceable as long as they are clearly outlined in the construction contract and comply with general principles of contract formation. If a contract contains a termination for convenience clause, Florida courts typically enforce the terms as written, although the party invoking the clause must comply with the contractual notice requirements by providing written notice within the timeframe specified in the contract.  In one Florida case, a contractor terminated a subcontractor simply to get a better price from another subcontractor.  The original subcontractor argued that the contractor acted in bad faith, breached the implied covenant of good faith and fair dealing, and that without the imposition of good faith limitations, the termination for convenience provision rendered the contract an illusory promise that lacked consideration. The Florida appellate court disagreed, finding the termination for convenience provision enforceable.  In fact, the court found that the contractor’s exercise of the termination of convenience provision simply to obtain a better price was not contrary to “the reasonable expectations of the contracting parties.” See Vila & Son Landscaping Corp. v. Posen Const., Inc., 99 So. 3d 564 (Fla. 2d DCA 2012).

Most commonly, the party that is receiving a service is the party that wants to be afforded the contractual right to terminate.  In the prime contract, it is the owner that often demands the right to terminate the prime contractor for convenience.  And, a general contractor will often want to include a termination for convenience provision in the subcontract with its subcontractor.  As a result, the party providing the service that may have no choice but to agree to a termination for convenience provision should be careful to negotiate a termination for convenience provision that provides some protection in the event the right is exercised by the other party.  For example, contractors will often negotiate a termination for convenience fee, which is a fee in addition to all costs incurred through the date of the termination of convenience, which may include things such as demobilization costs and other costs that may be associate with an unexpected termination.  It is critical that contractors negotiate these items up front given the fact that it is difficult and often impossible to get out of a termination for convenience provision.  As the Middle District of Florida acknowledged, such provisions are “difficult to argue around” and have limited plausible exceptions. See Oakes Farms Food and Distributions Services, LLC v. The School District of Lee County, Fla., 2021 WL 2186457, *11 (M.D. Fla. 2021). 

If an owner or contractor seeks to exercise a contractual right to termination, the proper steps will often be outlined in the contract. Typically, the owner must provide written notice to the contractor, stating their intent to terminate the contract for convenience. The contract will usually specify the amount of notice that must be given (i.e., 30 days, 60 days, etc.), and how the contractor should proceed with the termination. While the contractor is entitled to payment for work completed up to the point of termination, as well as other costs that may be allowed by the contract, contractors are generally not entitled to anticipated profits or damages beyond the scope of work completed.  The result is that contractors are likely to suffer losses for resources committed to the project, such as materials ordered, labor hired, or other investments made that cannot be re-used on future projects.  Therefore, it is imperative that a contractor use as much bargaining power as it has to negotiate and clearly specify available reimbursements in the event of a termination for convenience. 

Owners should understand the power of having a termination for convenience provision in their toolbox and should ensure that such provision is drafted in a manner that is enforceable.  Contrarily, contractors should understand the importance of negotiating the most favorable (or least unfavorable) termination for convenience provision to mitigate their potential risks and ensure fair compensation in the event they are terminated early, through no fault of their own.

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Author Troy Mainzer is an attorney in Carlton Fields, P.A.’s construction group in Tampa, Florida.  Troy represents owners, developers, general contractors, and subcontractors in connection with an array of construction disputes, including but not limited to commercial projects, infrastructure, residential home construction, site development, and other areas.  Troy can be reached at tmainzer@carltonfields.com or (813) 229-4239.

Meet the Forum's In-House Counsel: SONYA SEEDER

Company: Guidon Design

Email: sseeder@guidon.com

Website: www.guidon.com

Law School: IU McKinney School of Law (JD 2010)

States Where Company Operates/Does Business: Headquartered in Indianapolis, IN with federal, state and private projects across the country and Puerto Rico

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Q: Describe your background and the path you took to becoming in-house counsel.

A: I didn't come to in-house counsel through a traditional path (a law firm). After some time on both the prosecution and defense sides, I left criminal law and became a deputy corporation counsel to Code Enforcement. I realized that most legal questions were actually process questions in disguise. I ran the Bureau of Licensing and Permitting where I enjoyed molding process around municipal code. I moved on to run the city's real estate program where I acted as the Owner to multiple municipal projects. Seeing projects though planning, permitting and construction has given me a unique and practical perspective on construction projects. My ability to create process around the law (and understand permitting) was a big selling point to my current employer. 

Q: What percentage of your current legal practice is spent on construction-related work?  

A: I’m a one woman show, so it really depends on the day.  We are a Service Disabled Veteran Owned Small Business and a sizable portion of my time is spent on compliance processes around that certification.  I handle all corporate governance matters, insurance, licensing, occasionally dabble in land use matters, and take on anything else that comes across my desk.  I also have an unofficial business development role that keeps me active in the community and involved in project selection early in the process.

Q: What kind of work does your company do? Do you focus on specific sectors, states, or regions?  

A: Guidon is a full-service design firm that offers solutions for technically complex projects.  We have a focus on practical sustainability.  Our focus is on Healthcare, Science & Technology and Low-Income Housing projects nationally and civic projects on a local level.

Q: How and when do you use outside counsel?  

A: I use outside counsel in three situations; 1) I don’t know the answer, 2) I don’t have time to handle the matter, or 3) I’m making a record.  It’s important for outside counsel to understand WHY I’m coming to them in order to give the best service.  I rely on outside counsel for project contracts, claims and litigation, licensing, business transactions, immigration, IP and anything else that comes up.

Q: What are the work/business-related issues that tend to keep you up at night? 

A: Compliance, compliance, compliance!  I don’t know what I don’t know, and I rely on the updates firms issue to stay on-top of ever changing laws.  Additionally, like any other in-house counsel, I’m always worried about when a claim or lawsuit will hit and how it will disrupt business.  I work directly with our project managers on QA/QC processes on the front end to prevent claims, so thankfully, dispute resolution has not been a huge part of my job at Guidon (yet . . . knock wood).

Q: What do you or your company take into consideration when vetting and/or selecting outside counsel? 

A: Reputation is everything.  I need someone to vouch for you or to know you through the ABA or local bar association.  Firm reputation is also important, but I’ve had bad attorneys at good firms and vice versa. When it comes to construction law matters, I need you to understand the role of the design professional (and our insurance).  Your billing rate does get taken into consideration but isn’t a deal breaker, especially if I trust you will delegate matters appropriately and be measured in your billings.  I’m willing to pay for good advice.

Q: Describe a relationship with an outside attorney that was particularly successful. What made the relationship successful? 

A: I have been the first general counsel to two different A&E firms. In both of those roles, there was a well trusted outside counsel that had been supporting the company before I came along.  Neither of those attorneys viewed me as their competition.  They both went out of their way to help train me in areas I needed assistance with, even though it could mean less billings for them in the future.  They were both sounding boards for me, trusted advisors and I knew I could go to them with any question and they would get me what I needed and make sure I understood the why.  The outcome is that they have made me a better attorney, and because they have supported me and earned my trust so implicitly, I don’t hesitate to go to them with matters large and small.  They were able to build this relationship through multiple short phone calls, so not a ton of extra billing, but an impactful personal touch.  I recommend them to everyone.  

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Assistant Editor-in-Chief Jessica Knox is a Partner in the Minneapolis office at Stinson LLP. She represents owners, general contractors, and subcontractors in litigation disputes. Jessica can be contacted at jessica.knox@stinson.com. 

Professional Liability Insurance Considerations When Design Professionals are Involved

When it comes to managing risk, design professionals must carefully consider both commercial general liability (CGL) and professional liability insurance. While these two types of coverage both protect against third-party claims, they have key differences in how they work, when they apply, and what they cover. For lawyers working with design professionals, it is crucial to grasp the nuances in professional liability insurance in order to negotiate contracts and handle disputes effectively. By understanding these nuances and guiding clients accordingly, legal counsel can help design professionals navigate the complexities of insurance coverage and reduce their exposure to costly risks.

CGL v. Professional Liability Policies

A major difference between CGL and professional liability insurance is what risks they are designed to address and the form of the policy. CGL policies and endorsements are standardized across the industry/carriers and use forms issued by the Insurance Services Office, Inc. (ISO). CGL covers liabilities related to bodily injury, property damage, and personal/advertising injuries. It is meant to handle incidents occurring on the insured’s premises or due to non-professional activities.

Professional liability policies, on the other hand, do not use standardized forms and are unique to each carrier. But while there is variation in the form of the policy, the professional liability coverage itself has very little variation. Professional liability insurance focuses on claims arising from professional services and allegations of negligence, and coverage often includes losses directly related to design errors or omissions. These policies typically limit coverage and defense to the named design professional and its related entities for their professional negligence; limit contractual liability to tort liability only; and include “pre-loss” waivers of subrogation.

Given the lack of uniformity in professional liability policies, design professionals and their attorneys should carefully review each policy to understand its terms and potential coverage gaps.

Common Coverage Limitations and Gaps

Understanding the limitations of professional liability insurance is critical when negotiating contracts and managing risk with respect to design professionals.

 - Insured’s Contractual Liability: Unlike the CGL forms, professional liability policies typically exclude coverage for liability assumed solely through a contract. This means that design professionals should avoid agreeing to broad contractual obligations that extend beyond their common law duties. Limiting liability to tort-based claims can help maximize the chances of insurance coverage.

- Indemnification Clauses: Broad indemnity clauses that require the design professional to cover all project-related claims—even those unrelated to their negligence—can create coverage gaps. Since professional liability policies only respond to claims arising from the insured’s negligence, indemnifying others for unrelated issues often falls outside of coverage.

- Elevated Standards of Care: The standard of care for design professionals refers to the ordinary and reasonable care exercised by similar design professionals working on the same type of project, at the same time, in the same place, and under similar circumstances and conditions. Contracts that impose an elevated standard of care, such as requiring “perfect” or “highest quality” services, can trigger exclusions under professional liability policies, which typically cover only the standard of care expected under common law.

- Additional Insured Coverage: While it is common to add project owners and contractors as additional insureds under a CGL policy, this is not feasible with professional liability insurance. These policies are designed to cover only the design professional’s own negligent acts, not claims brought by or against other parties.

- Primary and Non-Contributory Coverage: Contracts often attempt to require the design professional’s insurance policies to be primary and non-contributory, which dictates that a certain policy takes precedence over other policies in the event of a claim where multiple policies are triggered. Professional liability policies, however, generally do not offer this option and are often written as excess coverage.

- Waivers of Subrogation: While waivers of subrogation are standard in CGL policies, they are less common in professional liability coverage. Design professionals should carefully evaluate whether to agree to such waivers, as they may impact the ability to recover losses from other responsible parties.

One way to address some of these coverage limitations is through project-specific professional liability policies such as A&E Professional Liability, Contractors Protective Professional Indemnity (CPPI), and Owners Protective Professional Indemnity (OPPI). These policies cover multiple parties involved in a specific project and can provide broader protection. But due to recent market trends, project specific policies may be difficult to obtain depending on the project size, scope, or timing.

Maximizing Coverage for Professional Liability Claims

When it comes to construction and design projects, professional liability claims often arise between project owners and design professionals. For attorneys representing both the owner and designer side of the dispute, it is important to understand how professional liability claims are defined, when the claim needs to be made, and how to report claims to ensure insurance coverage.

What is a Claim? A professional liability policy is triggered when a claim is made, but what exactly constitutes a “claim”? Typically, it involves a demand for money or services due to some alleged wrongful act by the design professional. Many policies specify that claims must be in writing; however, some may include verbal demands. Whether a claim has been made is viewed from an objective standard—whether a reasonable person would see the communication as a demand for services or damages. If a design professional suspects that a claim might be coming—for example, after receiving a critical letter about delays or design flaws—some insurance policies allow them to report it as a “circumstance.” This proactive step can lock in coverage if the issue later escalates into a formal claim.

Timing Matters. Professional liability policies are typically claims-made policies. Thus, to secure coverage under a professional liability policy, the claim must be made during the policy period or an extended reporting period. If the claim is made after the policy expires, coverage is typically lost—even if the events triggering the claim occurred during the policy period. And if a claim is made during a policy period for events predating the policy, it may be excluded from coverage. Many policies include a prior acts exclusion which excludes from coverage claims based on incidents that the design professional was already aware of before the policy began.

Reporting Requirements. Timely reporting of a claim is crucial to coverage. Once a third-party makes a claim, the design professional must promptly notify their insurance carrier because failure to report a claim within the policy period can allow the carrier to deny coverage. Providing detailed information, including parties involved and potential disputes, strengthens the case for coverage. Late reporting can lead to denied coverage, and some courts strictly enforce policy deadlines regardless of whether the carrier was prejudiced by the delay. However, a few states, like Michigan and Maryland, have laws requiring carriers to show actual harm before denying coverage for late notice.

Defense Costs. Professional liability policies usually have "burning limits" that cover both defense costs and settlements. Every dollar spent on legal defense reduces the amount available for settlements, so aggressive litigation tactics can quickly erode policy limits. Instead, a focus on efficiently and effectively preparing a case against the design professional can help maximize recovery from the carrier.

Whether through practice-based or project-specific policies, professional liability coverage is essential for managing risks in the design and construction industry. Lawyers advising owners, developers, or design professionals should be aware of the key insurance requirements and ensure timely and comprehensive claim reporting. Ensuring that clients are well-informed about claim definitions, policy timelines, and the importance of timely reporting will protect their financial interests and can make all the difference in securing coverage and achieving favorable outcomes.

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Author Lara Yost and Editor Debrán O’Neil are members of Carrington, Coleman, Sloman & Blumenthal, L.L.P.’s construction practice group in Dallas, Texas. They primarily represent public and private owners and developers in connection with the construction of large commercial and infrastructure projects throughout Texas. They can be reached at lyost@ccsb.com and doneil@ccsb.com, respectively.

Winning Construction Disputes: Strategic Negotiation for Better Outcomes

Construction projects are inherently complex, and disputes seem to be inevitable. Whether it’s a disagreement over defective work, delayed payments, or unforeseen site conditions, effective negotiation can mean the difference between a favorable settlement and an expensive, drawn-out battle. While many in the industry rely on traditional bargaining tactics or the principles from “Getting to Yes,” Chris Voss’s “Never Split the Difference” provides a tactical, psychological approach that can give contractors, owners, and attorneys a decisive edge.

1.  The Myth of Splitting the Difference

The title of Voss’s book is a direct challenge to one of the most common, yet flawed, negotiation strategies: compromise. In construction disputes, parties often propose to “meet in the middle” as a quick resolution. However, as Voss warns, “A woman wants her husband to wear black shoes with his suit. But her husband doesn’t want to; he prefers brown shoes. So what do they do? They compromise, they meet halfway. And, you guessed it, he wears one black and one brown shoe.” In construction, this can mean accepting an unsatisfactory repair or agreeing to partial payment for incomplete work—neither of which truly resolves the issue.

2.  “Negotiation is not an act of battle; it’s a process of discovery.”

In many ways, negotiation in construction disputes mirrors the discovery process in litigation—both are about uncovering critical information and using it strategically to shape the outcome. Chris Voss emphasizes that “Negotiation is not an act of battle; it’s a process of discovery.” This perspective aligns with how attorneys approach discovery in litigation: it’s not about immediately winning or forcing a resolution but about gathering facts, identifying leverage, and understanding the other party’s position. Just as depositions, interrogatories, and document requests reveal key insights in a lawsuit, skilled negotiators extract valuable information through calibrated questions, active listening, and tactical empathy. Both processes require patience and a keen ability to interpret what is said—and, just as importantly, what is left unsaid. While discovery in litigation builds the foundation for trial or settlement, negotiation aims to uncover the motivations and constraints of the opposing party to craft a more favorable resolution before legal costs spiral. Ultimately, whether in a courtroom or across the negotiating table, the party that gathers the most useful information holds the strongest position.

3.  The Power of Calibrated Questions

Another key strategy from "Never Split the Difference" is using calibrated questions to steer the conversation without triggering resistance. Instead of demanding concessions, ask open-ended, “How” and “What” questions that make the other party feel in control while guiding them toward your preferred outcome.

In construction law, disputes often arise over contract scope, delays, or payment issues. Attorneys representing clients in construction disputes can use calibrated questions during mediation or settlement discussions to uncover the opposing party’s true motivations. Instead of arguing over delay damages, an attorney might ask, “What challenges do you see in finalizing this agreement?” or “How can we structure a resolution that avoids further litigation?” These approaches keep the conversation constructive and reduce friction.

4. Conclusion

In construction law, negotiation is not about making quick compromises but about strategically guiding discussions to achieve favorable outcomes. Whether resolving claims for unpaid work, negotiating change orders, or settling defect disputes, attorneys and construction professionals must go beyond positional bargaining. By applying tactical empathy, calibrated questions, and a discovery-based approach, they can uncover leverage, defuse conflict, and structure agreements that truly work. As Voss teaches, negotiation is about communication with results—and in construction disputes, those results can determine the success or failure of a project. Mastering these techniques can help attorneys and industry professionals alike resolve disputes efficiently, saving both time and money while avoiding unnecessary litigation.

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Mohamed Asker is a member of Fox Rothschild’s national Construction Practice Group. For more information, please contact him at masker@foxrothschild.com.

This article is provided for informational purposes only—it does not constitute legal advice. Readers should consult legal counsel before taking action relating to the subject matter of this article.

Top 10 Take-Aways from the 2025 Mid-Winter Meeting in Tampa

The ABA Forum on Construction Law convened last week in Tampa, Florida for its Mid-Winter Meeting. This year's program was focused on owners and developers. Kudos to Jessica Courtway, Joel Heard, Keith Bergeron, and Tom Dunn for putting together an insightful slate of plenaries and activities. While it would be impossible to sum up everything I learned, below are my top 10 take-aways.

10. Dispute Review Boards are not just for public infrastructure projects. Usually comprised of a mix of 1-3 industry professionals, a Dispute Review Board ("DRB") can be implemented at the inception of construction projects to help quickly resolve disputes or, better yet, avoid them entirely. DRBs have been steadily gaining in popularity since their inception in the late 1970s. While used widely on large, publicly funded infrastructure projects, DRBs have yet to be fully embraced by the private sector. I moderated a panel comprised of Bill Franczek and Deb Mastin about the value DRBs can bring to complex, time-critical projects. At least one case study done by the Florida Department of Transportation suggests that the incidence of both time and cost overruns on projects that used a DRB were significantly less compared to projects that did not. While owners will need to build in a budget for the DRB members' fees, that expense is a small fraction of the total project cost and (much like the cost of a good insurance program) pale in comparison to the litigation costs which they could help avoid. And, since DRBs ensure contractors will have access to a dispute resolution process that is less owner-biased than the default situation (where the architect or government official serves as initial decision maker) some contractors have even expressed a willingness to lower their bid where an owner is willing to adopt a DRB for their project.

9. Doing what's right for the project may not coincide with what is cheapest. Despite the bias being that developers are all about maximizing returns, the best developers recognize that it is not all about the bottom line. Josh Taube, one of the headliners of the "Meet the Developers" panel shared that he will often spend more to get the best talent on the job. Joe Lopano (CEO of Tampa International Airport) spoke passionately about how he advocated for a tram-based system to convey travelers to the airport's remote rental care center; even though it was more expensive than a bus-based system, Lopano fought for it because he believed it was the right choice for the project. And Ed Kobel—who converts vacant office buildings into residential living spaces—discussed the focus his company places on the tenant experience which make his buildings a better place to live and deliver value by encouraging tenant retention. Kobel has learned that if a tenant makes just one friend in their apartment complex, there is an 87% chance they will renew their lease. As a result, his company focuses on how to create a design that fosters community.

8. Skipping out on independent project oversight can be penny wise and pound foolish. Owners oftentimes hire third-party owners' representatives to oversee their construction projects. Whether they should do so depends on a number of factors but should never come down to cost, according to panelists Laura Jo Lieffers, Diane Utz, and Brian Hanifin. Whenever the owner lacks the time, attention, or experience to ensure successful completion of the project, retaining the services of a separate owner's representative can be a good idea.

7. Maintenance considerations will be part of any successful design process.

I.M. Pei's Grand Pyramid

Panelists Mike Koger and Robin Zeidel spoke to the notion that more thought should be given in the design process to how a building will be lived in and maintained after the project is completed. Eliminating design elements which will be impractical to maintain should be at the forefront of any owner's consideration during the planning process. Such considerations will not always be made by the architect. After I.M. Pei designed the Grand Pyramid for the new entrance of the Louvre in the 1980s, it was not clear whether it could actually be cleaned. Since traditional scaffolding was not an option, mountain climbers were lowered down the face of the pyramid to do the work by hand until a special robot was developed to automate the cleaning process.

6. Attorneys should think twice before converting consulting experts into testifying experts. It is common practice for attorneys to hire a consulting expert to assist with case development at the outset of a dispute and designate that same expert as a testifying witness later in the case. While doing this achieves cost savings and reduces complexity, it is not ideal according to Harper Heckman, J. Paul Allen, and Jessica Knox. The better practice is to hire a different testifying expert and provide them only with the facts which they need to form an opinion in the case. In this way, communications with the initial consultant related to case/theory development will remain non-discoverable.

5. Cash flow is the oxygen that gives the project life. It’s not unusual for 60% of the cost of typical commercial and industrial real estate construction projects to be funded by debt. According to panelists, C. Randall Minor and Benton T. Wheatley, including debt in the capital stack can enable larger projects and spread the financial burden by aligning repayments with incoming cash flow from the project. Owners need to take care to comply with the disbursement requirements, however, so they don't negatively impact the flow of construction funding and potentially jeopardize the project altogether.

4. There are benefits in controlling the wrap insurance on any project. Most construction lawyers are familiar with Owner-Controlled Insurance Programs ("OCIPs") and Contractor-Controlled Insurance Programs ("CCIPs"). The main difference between the two different types of wrap policies is who between the owner and contractor will control and manage the program. Notwithstanding that the risk can be greater for whomever procures the coverage, Wendy Stein Fulton and Seth Schimmel always recommend that their clients be the one to procure the wrap coverage so they can ensure the premiums are paid and the necessary coverage is in place when it is needed.

3. Ensuring the ability to prove productivity claims is an exercise in good record-keeping.

The Division 1 lunch panel program (comprised of Leslie O'Neal, Brett Henson, David Ehrlich, Dr. Long Nguyen, and Tom Finnegan) was focused on the various factors that can result in lost labor productivity on construction projects and how such impacts can, and should, be substantiated.  Assuming the relevant contract documents do not foreclose disruption claims (some will), proving that the contractor should be entitled to more time or money due to labor impacts is not easy. It requires, at minimum, that the contractor be able to correlate its labor impacts to factors that were not anticipated and were outside its control. Some of the tools in project management software like Procore can assist with evaluating and either buttressing or undermining asserted productivity claims.

2. Balance is still needed in regulating board management of Florida's condominium associations. On June 21, 2021, Champlain Towers South, a 40-year-old condo building in Surfside, Florida, collapsed, tragically killing 99 people. The investigation that followed revealed that the collapse was precipitated by the failure of the waterproofing at the building's pool deck. The condo board had known about the issue for five years but elected not to address it since the repair carried with it a hefty price tag of $15 million. The Surfside collapse has become the hallmark example of what can occur when condo boards are permitted to defer necessary maintenance to spare their bottom line. While the pre-Surfside incentives certainly needed some re-alignment, according to panelists Dr. Evan McKenzie and Kristi Stotts, the Florida State Legislature may have gone too far in the opposite direction in adopting Florida Senate Bill 4-D. Senate Bill 4-D requires periodic benchmark inspections and establishes that the failure to reserve for necessary maintenance can be a breach of a volunteer condo board member's fiduciary duty. While well-meaning, Senate Bill 4-D has driven up the cost of condo living and devalued these assets overnight.

1. A diverse arbitration panel fosters a full and fair hearing of any dispute. Opting for arbitrators who have different identities, experiences, and backgrounds from one another is the best way to ensure that they will be less susceptible to "groupthink" and will reach a determination that is well-reasoned and fair. Professor Homer La Rue, Patricia Thompson, and Leah Wilson spoke of the need for ADR service providers to ensure that the panels from which arbitrators are selected are sufficiently diverse. And, since lawyers are less likely to recommend an arbitrator whom they don't know, diverse arbitrators need to do what they can to increase their profile among attorneys who may be in a position, one day, to retain their services. To that end, any arbitrators and mediators who are looking for a platform to publicize their experience and services will find a ready-made platform in Division 1 of the Forum. If you are an ADR professional and are interested in being added to Division 1's directory of ADR neutrals and/or profiled as part of our "Meet the Neutrals" series, please contact me at mdowns@lauriebrennan.com.

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Author and Editor-in-Chief Marissa L. Downs is a construction attorney in Chicago, Illinois where she has been practicing law since 2009. Marissa is a partner at Laurie & Brennan, LLP and represents owners, general contractors, and subcontractors in all phases of project procurement, claim administration, litigation, and arbitration/trial. Marissa can be contacted at mdowns@lauriebrennan.com.

Understanding the Limits of Privilege When Applied to Witness Prep Sessions

In my last post, Ethical Limits on Preparing a Witness for Deposition or Trial, I took a brief look at the ethical limits on preparing a witness for trial or deposition. This post will continue on that theme and examine the scope of privilege in connection with preparing witnesses for deposition and trial.

Typically, a meeting with a client or client representative to prepare deposition or trial testimony will be covered by attorney-client privilege. Both the communications between an attorney and the client or client representative in preparation to testify are privileged as are the documents provided by the attorney to the client to review in preparation for testify.[i] That privilege will typically apply to all employees of a corporate client, not just the control group or high-level management of the corporation.

However, it is important to note that not everything discussed with a client or client representative in preparing for a deposition is going to be protected by privilege. One such limitation is Federal Rule of Evidence 612 which provides in pertinent part:

if a witness uses a writing to refresh memory for the purpose of testifying, either—

 

(1) while testifying, or

 

(2) before testifying, if the court in its discretion determines it is necessary in the interests of justice,

 

an adverse party is entitled to have the writing produced at the hearing, to inspect it, to cross-examine the witness thereon, and to introduce in evidence those portions which relate to the testimony of the witness.

Most cases hold that FRE 612 applies to depositions, but there a few cases that take a contrary position.[ii] Most cases hold that if a document is used to refresh a witness’s recollection in preparing a witness for their deposition, the party examining the witness is entitled to disclosure and production of the document used to refresh the witness’s recollection.

Rule 612 likely applies when the document used to refresh the witness's recollection would otherwise be subject to work-product privilege or attorney-client privilege. Some cases that hold that the waiver under FRE 612 of any work-product privilege or attorney-client privilege that might otherwise apply is automatic when a document is used to refresh the recollection of a witness, while other courts apply a balancing test looking to whether disclosure is needed for a fair cross-examination of the witness or whether the examining party is engaged in a fishing expedition.  

Under the reasoning of the Supreme Court decision in Upjohn Co. v. United States, almost all courts hold that attorney-client privilege applies to communication between an attorney representing a corporate client and the former employees of the corporate client.[iii] Communication between counsel and the former employees are protected by the attorney-client privilege if the communication focuses on what the former employee knows as a result of the former employment about the circumstances giving rise to the lawsuit. However, examining counsel has the right to ask about matters that may have affected or changes the witness’ testimony, such as communication between counsel and the former employee that goes beyond the former employee’s knowledge of the circumstances at issue and beyond the former employee’s activities within the course of his employment.[iv] Nonetheless, pre-deposition communication with a former employee may be subject to the work-product privilege to the extent that they communicate counsel’s legal opinions and theories of the case.

However, not all courts take the position that attorney-client privilege applies to communications between corporate counsel and the former employees of the corporation. In Newman v. Highland School District No. 203,[v] the Washington Supreme Court declined to extend attorney-client privilege to all communications between counsel for a school district and the former employees of the school district.

Newman involved a negligence suit seeking damages for a permanent brain injury suffered by a student athlete during a football game. The former employees, football coaches, were represented by counsel for the school district for the purposes of their depositions. Counsel for the plaintiff sought to disqualify counsel for the school district from representing the former employees. The lower court denied the motion but ruled that counsel for the school district could not represent non-employee witnesses in the future.

Counsel for the plaintiff also sought discovery concerning communication between counsel for the school district and its former employees. The lower court held that attorney-client privilege did not apply to any communication with the former employees outside of the deposition representation. The Washington Supreme Court ultimately held that the lower court properly rejected the argument that the former employees should be treated the same as current employees for attorney-client privilege purposes and appropriately only allowed the school district to assert attorney-client privilege over communications during the time that the school district’s counsel “purportedly represented them at their depositions.”

In situations where a former employee is represented by counsel for a defendant corporation for the purpose of testifying at a deposition at no cost to the former employee, courts have generally not treated the former employee as having an independent right to assert attorney-client privilege, even when the employee believes that the employee is being represented by the attorney.[vi] Although, as discussed above, the Washington Supreme Court in Newman v. Highland School District No. 20 appears to have reached a somewhat different conclusion.

Finally, there is likely no privilege associated with preparing a third party who is not a client or former employee of the client. Typically, there is no attorney-client privilege with a third party absent a common interest privilege, and disclosure of work-product to a third party with whom there no is common interest privilege waives the work-product privilege. As one court has stated: “The ability of a party to meet with a non-party witness, show him documents and ask him questions and then mask the entire preparation session in the cloak of work product protection would serve to facilitate even the most blatant coaching of a witness if it could not be the subject of inquiry.”[vii]

In conclusion, in most cases, deposition prep meetings with a current or former client representative (as well as the documents selected by counsel for the client or a client representative to review) will be privileged. But, if a document is used to refresh a witness’s recollection, even a document that is otherwise subject to attorney-client or work-product privilege will be subject to production in most cases. Additionally, any communications with a former employee that go beyond the former employee’s activities within the scope of his or her former employment may not be protected by privilege.  Finally, absent a common interest privilege, in most circumstances, there will not be any privilege for communications with a non-client regarding deposition or trial testimony preparation.

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Author and Editor Stu Richeson is an attorney with Riess LeMieux in New Orleans, primarily focusing on commercial litigation with an emphasis on construction matters.

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[i] Alexander v. F.B.I., 186 F.R.D. 200, 203 (D.D.C. 1999).

[ii] Adidas Am., Inc. v. TRB Acquisitions LLC, 324 F.R.D. 389 (D. Or. 2017).

[iii] Gary Friedrich Enterprises, LLLC v. Marvel Enterprises, 2011 WL 2020586 (S.D.N.Y. 5/20/2021).

[iv] Globalrock Networks, Inc. v. MCI Communications Services, 2021 WL 13028650 (S.D.N.Y. 5/7/2012).

[v] 186 Wash. 2d 769, 381 P.3d 1188 (2016).

[vi] Gary Friedrich Enterprises, LLLC v. Marvel Enterprises, 2011 WL 2020586 (S.D.N.Y. 5/20/2021).

[vii] S.E.C. v. Gupta, 281 F.R.D. 169, 173 (S.D.N.Y. 2012).