Tuesday, November 5, 2024

Understanding Entitlement to Delays and Proper Support

In a previous post, we discussed delays on construction projects including (1) critical versus non-critical delays, (2) excusable versus non-excusable delays, and (3) compensable versus non-compensable delays. We also reviewed the common methods of delay analysis include (1) the Total Cost Method, (2) the Modified Total Cost Approach, and (3) the Measured Mile Method.

Once you have determined the type of delay and the method to be used to analyze and quantify the delay, it is important to understand the type of documents/evidence needed to support your claim for delay.

If a party determines that they are entitled to some type of recovery for the delay, the party making a claim for delay, such as a contractor, must have the proper documentation/evidence to assist in proving entitlement for damages from the delay. Without the proper back-up, contractors are generally unable to recover all of the additional costs and expenses associated with the delays or, at best, recover only an “equitable” amount. Generally, damages must be proved with reasonable certainty and may not be based on speculation or conjecture. Thus, it is crucial for a party asserting a delay to have the proper documentation to support a delay claim, if the goal is to recover the damages associated with the delay. 

Courts routinely uphold an owner’s decision to demand sufficient backup documentation and other evidence to support a claim for payment, prior to submitting the claim to an owner. See generally In re Central States Mechanical, Inc., Case No. 09-12542, 2011 WL 1637991 (Bankr. D. Kan. Apr. 29, 2011) (collecting cases); Systemaire, Inc. v. St. Charles County, 432 S.W.3d 783 (Mo. App. 2014) (finding a genuine issue of material fact as to what documents were required under the construction documents prior to payment).

In general, the best backup documentation is that which is contemporaneous and continuous. If able to do so, parties should use the actual project records illustrating all modifications, delays, and related costs from the course of the project. 

The best documentation will include items that are contemporaneous with the delay event(s). Not every project will have the same documentation, as every project is different. To assist in proving a delay claim and related damages, some key documents may include:
  • delay logs;
  • delay notices;
  • payroll records;
  • time and material reports;
  • diaries and witness statements;
  • quality control and inspection reports;
  • payment requisitions;
  • dated progress photos and drone videos;
  • daily, weekly, and monthly progress reports created at the time of the delay rather than those that may have been created after the fact; 
  • project meeting minutes that were distributed to various parties as opposed to draft meeting minutes in a word processing software; subcontractor records of the delay;
  • project schedules and any schedule updates;
  • requests for information (RFIs);
  • change orders and change order requests;
  • construction change directives (CCDs);
  • correspondence, such as letters, emails, and texts, between the project team;
  • invoices and receipts for costs incurred due to delays; and
  • any other documentation helping to establish the delay.
Any of these documents can assist in establishing and supporting a delay claim. While not every type of document is required, it is important to keep good project records contemporaneously with the Project so that you will have sufficient backup to support any delays.

Project records should also contain an adequate level of detail and be presented in a consistent format. These records should also be as specific as possible when a delay is encountered. For example, a contractor should clearly identify what is delaying the project, who is responsible for the delay, and which activities the delay is affecting.

Further, project documents should not contradict each other. For example, the project schedule should show the same actual start and finish date for an activity as reflected in the daily reports. It is imperative that the project team works together when documenting a delay so that all team members are on the same page to reduce the possibility of conflicting records/documents.

Maintaining documentation, including schedules, RFIs, notices, change orders, meeting minutes, progress reports, photos, emails, text messages, and other correspondence as well as all responses made or received is important to show the continuous communication between parties, despite the fact that this task can seem unmanageable. It is also a good idea to save these documents/records upon receipt in a manageable system so that you can focus on the Project while preserving your rights to any delay claims at a later date.

If you are experiencing a delay, it is good practice to place those responsible, such as an owner, on notice of delays. Be clear and direct in your documentation and communicate with the other parties immediately if you believe there is evidence of delays. It is also a good idea to submit all change orders for review and approval before proceeding with any changes or additional work that might cause delays.

Alternatively, a contractor can continue with the contract work in the face of delays caused by third parties, regardless of whether the contract requires written notice of delays or a delay claim. However, doing so may be at the contractor’s risk, as courts will not interfere with the terms of contracts made by competent parties, and generally hold parties to contract terms which require written notice and specific documentation of delay claims and claims for extras. See Razorback Contractors of Kansas, Inc. v. Board of County Com’rs of Johnson County, 43 Kan.App.2d 527, 227 P.3d 29 (2010) (rejecting contractor’s claim that substantial performance sufficed to preserve its claims, when the contract required written notice of claims for extra to be given to specific entities and within a specified time-period); see also T L James & Co. v. Traylor Bros., 294 F.3d 743 (5th Cir. 2002) (applying Louisiana law and denying a contractor’s claims for extra work due to contractor’s failure to follow terms of the contract and provide notice). Therefore, it is important to understand all relevant contract clauses concerning delays, such as notice requirements and certain methods for establishing delays.

The lack of documentation may not necessarily bar a delay claim.  However, depending on the jurisdiction, written modification provisions may be waived orally or by course of dealing. For example, some courts have held that, even if a subcontract requires that all change orders be authorized in writing, the requirement can be waived: “Habitual acceptance of work done on oral change orders in connection with a contract, and payment therefore, results in waiver of a contract clause providing that all orders must be signed.” Brockman v. Soltysiak, 49 S.W.3d 740, 745 (Mo. App. 2001); see also Missouri Dept. of Transp v. SAFECO Ins. Co., 97 S.W.3d 21, 36-37 (Mo. App. 2002) (subcontractor presented sufficient evidence that the general contractor had requested and agreed to extra work and that the subcontractor had performed it, thereby waiving the requirement in the subcontract that all change orders be approved by the contractor in writing).

Because construction project delays are common, project participants such as owners, sureties, and contractors will eventually be faced with some type of delay on a construction project. Thus, it is important to understand the different types of delay, whether it is compensable, and what information and project documentation is required to assist in proving entitlement to recovery for damages due to delays. It is very important to document the file and keep contemporaneous records of any potential delays so that when/if the time comes, you will have the required documentation to establish entitlement to damages.     

Tuesday, October 29, 2024

Top 10 Take-Aways from the 2024 Fall Forum Meeting in Pittsburgh

A view of Point State Park Fountain

Over 500 construction law attorneys and consultants convened last week at the confluence of three rivers in what became the first-ever meeting in Pittsburgh, Pennsylvania of the ABA Forum on Construction Law. The Steel City was a fitting backdrop for a meeting focused on issues of design in construction. Thanks to the hard work of many, most notably the newly minted Forum Chair Keith Bergeron and Meeting Coordinators Kendall Woods and Michael Clark, the meeting's attendees brought home new connections and a host of new lessons learned. Read on for my top 10 take-aways from the 2024 Fall Meeting in Pittsburgh and feel free to share yours in the comments below.

10. An architect's standard of care does not require perfection. A common refrain across many of the meeting's plenary sessions was that any design that is produced by human hands will never be perfect. In recognition of our own fallibility, the legal standard to which design professionals will be held to account does not require that their designs be error-free. A design professional must generally exercise the degree of care and skill ordinarily exercised by professionals performing similar services under similar circumstances. Establishing what that means in each locality will vary and will most likely need to be supported by the expert opinion of another practicing design professional.

9. Attempting to contractually alter an architect's standards of care is fraught with peril. Zealous contract attorneys who attempt to modify the form contract documents to alter the architect's standard of care may end up doing their clients more harm than good, per panelists Andy Manuel, David Zion, and Luke LaRocca. On one hand, an owner's attorney who attempts to raise the architect's standard of care by drafting in a requirement that the architect perform "best possible" or "five-star" services will have difficulty administering the contract and waste time in any dispute attempting to prove what these terms mean. They may also unwittingly draft the architect out of its professional liability coverage. On the flip side, any attempts by an architect's attorney to lower the customary standard of care may ultimately be found to be contrary to law and/or public policy and be unenforceable.

"Together" by KAWS
8. Collaboration and communication are key. While the architect and contractor are not always aligned and can be quick to point the finger at each other when things go wrong, conflict can be avoided if they approach the project in a collaborative way. This was one of the chief take-aways form the panel comprised of Maija Kreishman, Paul Clayton, and Wendy Dunnam Tita (and moderated by Matt Ryan). The radical thought that the design professionals and the contractor on a project should "be interested in each other's success" was radical in its simplicity. It's not hard to imagine the benefits that might be afforded to the project if the architect and contractor followed this advice and assumed a less adversarial posture to project execution.

7. When it comes to document discovery, linear reviews are a thing of the past. Kicking off a three-installment series on discovery in construction litigation, the Practicum in Pittsburgh focused on document management. Lisa Colon, Anthony Gambino, Carolyn Southerland, Frank Wisehart, and Kat Meyer led an informative discussion on best practices controlling discovery costs in construction disputes, which are notoriously document-intensive. Chief among the wisdom offered was the admission that performing a linear review of every discoverable document prior to production is no longer the way. Advocates and their attorneys need to get comfortable with the idea of: (i) leveraging technology to bring the most salient documents to the fore and (ii) producing sight unseen those documents which are responsive but unlikely to be critical (or privileged).

6. Generative AI carries with it a myriad of ethical considerations. So-called "generative AI"—the autonomous creation of new content, data or outputs that mimics or resembles human-created content—continues to influence the practice of law. Attorneys cannot ignore the potential benefit that generative AI might bring to their clients; nor can they rely on it wholesale without careful consideration.  Niloy Ray and Pasha Ameli cautioned meeting goers about the delicate tightrope that must be walked when generative AI is concerned. Per ABA Model Rule 1.1, a lawyer has a duty to keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology. Attorneys should consider whether generative AI can benefit their cases and their clients. But, any attorney choosing to use generative AI in their practice must take special precautions to  communicate this fact to their clients, supervise the AI as it would any "non-lawyer" member of its team, and protect the client's confidential information.

5. BIM is the wave of the future. Building Information Modeling (or BIM) has come a long way since it was first developed. Design professionals were historically reticent to even show their BIM models to owners and contractors (let alone certify the models as a tool for construction. That attitude is changing according to panelists Connor Christian, Rachel Riopel, and Kristine Kubes. In some jurisdictions, BIM is not only being used to supplement the drawings but actually replace them. Referred to in practice as Model as Legal Document (MALD), several states have already endorsed using a BIM model to replace 2D plans on construction projects. More states are in pilot projects involving MALD and are soon to follow suit. 

4. Construction administration services should not be seen as optional. Owners are often motivated to keep project costs down may perceive construction administration (CA) services by their design professional as a luxury they simply cannot afford. According to James Germano, Misty Gutierrez, and Matthew Ninneman, owners do themselves (and their projects) a disservice if they elect to forego CA services.  Without the architect's involvement in the construction process, there is no natural answer for who will have the responsibility to authorize product substitutions/alternates, review pay apps, certify the progress of the work, and prepare the punchlist (among other tasks). Without someone qualified to fill this role, mistakes may be made, disputes may arise, and the project may suffer.

3. If a picture is worth a thousand words, a visualization may be worth a million. At a lunchtime presentation to Divisions 1 and 4, Thanh Do and Jade Davis demonstrated how video data visualizations can be used to better explain complex concepts and failure mechanisms to a lay person fact finder. Taking a case study involving a crane collapse, Thanh (from Thornton Tomasetti) showed how creating a visualization of how a pin mechanism fit together was much easier to grasp compared to the line drawing. While visualizations can be incredibly powerful tools to, in order to ensure you will be permitted to present such illustrations to the fact-finder, it is important to ensure that they are accurate and not unduly prejudicial or confusing.

Side-by-side comparison of a line drawing (left) and visualization (right) of crane pin assembly 

2. Good design is about more than code compliance. Construction litigators focus their time on projects in peril and rarely think about the creative inspiration from which they germinate. But so many of the design professionals who spoke in Pittsburgh underscored the idea that the design professional's goal is to push the boundaries of what is possible and imagine the future. Good design is about more than complying with codes but understanding and capturing how a place will be experienced and live in the minds of people.

1. Design can help heal communities torn apart by tragedy. Carla Swickerath, an architect with Studio Libeskind, spoke at the meeting on behalf of the design firm that served as Master Planner for the World Trade Center site following 9/11. Carla spoke passionately of the symbolism that imbued the design process, including the desire to ensure that the sun would shine on the site without shadow during the morning of every September 11 and the decision to make the surviving "slurry wall" a prominent feature of the new museum as a way of underscoring that our nation's foundation remained strong. Studio Libeskind is making similar design choices to re-imagine and expand the Tree of Life Synagogue in Pittsburgh following the tragic events of October 27, 2018 when 11 people were killed in the deadliest antisemitic attack ever witnessed on U.S. soil. Central to Liebskind's design concept is creating a "Path of Light" skylight that will effectively "bring light to the darkness" of that tragic event. 


Author 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.

Thursday, October 24, 2024

Toolbox Talk Series Recap - BIM Lessons Learned

In the October 17, 2024 edition of Division 1's Toolbox Talk Series, Sam Gregory and Dr. Will Ikerd discussed the benefits and limitations of using Building Information Modeling (“BIM”) on construction projects.  As a threshold matter, Dr. Ikerd discussed what BIM is and, vitally, what BIM is not.  BIM is a process to generate and manage digital representations of the physical and functional characteristics of buildings (and other physical assets).  Put simply, if done properly, BIM can provide a digital representation of a property that can be used for planning, design, construction, and operations.  Dr. Ikerd focused mostly on the use of BIM in context of designing and constructing buildings, summarizing that BIM lets us complete projects twice: first virtually and then in reality.      

Dr. Ikerd expressed his view of BIM as tool to aid in a design team’s overall goal to deliver a coordinated design intent that is constructible.  In this sense, BIM can provide coordination for trades and include more information in a single model than what is found in two-dimensional drawings or in traditional Construction Documents (“CDs”). Unlike traditional CDs, BIM can easily model the relationships between different construction components or trades, such as between HVAC and plumbing to assure they do not conflict.  BIM can also have embedded metadata and relationships between the model’s elements, which can be useful for many things, including for facilities operations or for owners to consider completion dates for specific elements in relation to warranties.

Despite the promise of BIM, builders and construction lawyers should be aware of its limitations.  First, BIM can give the illusion of accuracy based on its precise modeling.  Dr. Ikerd cautioned that the challenge of modeling is tension between precision and accuracy.  Components can look precise but still be inaccurate. For example, a model of an MEP system can show pipes, ducts, and conduits running through each other.  Even if the modeling looks precise, it may not line up with the reality of constructing the MEP system and coordinating its elements, particularly if it does not account for tolerances from each of the elements.

Second, BIM deliverables rarely replace traditional CDs.  In fact, many municipalities require two-dimensional drawings for permits.  In the infrequent situation when BIM deliverables can replace CDs, it is typically for an Integrated Project Delivery (IPD) or Design-Build construction project delivery method.  Where BIM deliverables replace traditional CDs, parties need to be extra vigilant about documenting scope, schedule, fees, and quantity.

Third, contractors should not rely on BIM models blindly.  They should consider the time and costs associated with developing the model and with the coordination meetings (particularly where schedule is tight or the design fee is light).  If BIM is not done thoroughly, the CDs may be incomplete and put pressure on a contractor to complete construction based on incomplete drawings.  Trades also need to be aware of the Levels of Development (LOD) of the model, which range from LOD 100 (conceptual design) to LOD 500 (as-built).  Trades should take note of the LOD and clarify their bids accordingly.

Thank you to Sam Gregory and Dr. Will Ikerd for the useful overview of BIM and some lessons to keep in mind.


Author Douglas J. Mackin is a construction attorney with Cozen O’Connor in Boston, Massachusetts. Doug counsels owners, developers, contractors, and subcontractors in all phases of a construction project, from contract negotiation through to completion, including disputes, litigation, and arbitration. Doug can be contacted at dmackin@cozen.com.

Monday, October 14, 2024

Changes to Judicial Selection in Mexico Create a New Case for Contractual ADR Provisions

The Mexican Congress recently discussed and approved a Constitutional Amendment called the “Judiciary Amendment” which was ironically published in the Official Gazette on September 15, 2024, the day before Mexican Independence Day.

With this Judiciary Amendment, the Mexican Congress determined that Federal Judges, Federal Magisters and the Ministers of the Supreme Court will now be elected through direct and popular election. Before the Judiciary Amendment, Federal Judges and Magisters used to have a judicial career; many of them started as law clerks and were promoted step by step until becoming Judge or Magister.

Ministers of the Supreme Court were appointed by the Senate through an election of three candidates designated by the President.

How is this going to work?

The Senate will publish the guidelines for the elections with the numbers of charges to be fulfilled according to the Congress.

Each power will form an Evaluation Committee that will create a list of the 10 best evaluated candidates of each charge. (Remember there will be elections for Ministers of the Supreme Court, Magisters of Constitutional Tribunals and Federal Judges. So, there will be 10 candidates for each of them.)

The list of the 10 best evaluated candidates will be further reduced through random drawing. (Yes, a drawing). The reduced list will be sent to the Senate which will send it to the Election National Institute to proceed with the election process.

Campaigns will last 60 days. Candidates are not permitted to finance such campaigns, either with private resources, or with public funds.

Who can be Judge, Magister or Minister?

To be Judge or Magister, candidates must: (i) have been born in Mexico; (ii) have an Attorney License by the date of the publication of the election; (iii) have earned 8 points as a general average in law school and 9 in the topics related to the subject applied;[i] (iv) have practiced professionally  for at least 3 years; (v) have a good reputation ( i.e., never served jail time); (vi) have lived in Mexico the last year of the call; (vii) not have been a public officer during the previous year to the election.

Candidates must submit a 3-page essay justifying why they should be elected, as well as 5 reference letters from their neighbors, educational institutions or any other people supporting their suitability.

Who will oversee the conduct of the Judges, Magisters and Ministers?

The conduct of the people serving on the judiciary will be overseen by a Tribunal consisting of 5 people elected directly by the population for a 6year period.

This Tribunal will have the responsibility of resolving complaints against the judicial officers submitted by third parties, and also to initiate complaints by themselves. The decisions of the Tribunal will be definitive and binding.

While the Judiciary Amendment does not seem to be the solution (but, rather, a step backward) when it comes to a well-functioning judicial system, Mexican companies (and foreign companies working in Mexico) may, as an alternative, include mediation or arbitration clauses in their contracts.

Mexico has seen a slow improvement in the use of institutional mediation which can preserve commercial relationships and avoid? further litigation.

At the beginning of this year the Alternative Dispute Resolution General Act was published to promote ADR (mainly mediation) in several areas of law (such as commercial and administrative law).

This law did not expressly adopt the UNCITRAL Mediation Rules which means there may be lack of clarity in how mediations in Mexico can be conducted. On the other hand, the Mexican Commercial Code had already adopted the UNCITRAL Arbitration Rules.

Given the uncertain effects of the Judiciary Amendment, it is critical to embrace alternative dispute resolution tools in construction contracts and start implementing Dispute Boards (and other ADR models that have been internationally proven) in the Construction Industry in Mexico.



[i] In Mexico, the highest grade possible is a 10, making a score of 8 roughly equivalent to an 80% in the U.S. grading system, or a 3.0 GPA.


Author Juan Pablo Sandoval is a Junior Partner at COMAD, S.C. in Mexico City, Mexico where he focuses his practice on construction law. Juan Pablo has experience across various sectors, including airport, railway, highway, tourism, hospital, oil, and energy projects. Juan Pablo can be contacted by email at jpsandoval@comad.com.mx.

Wednesday, October 9, 2024

Courthouse Reporter Series: Nebraska Court of Appeals Vacates Arbitration Award for Misconduct

Vacating an arbitration award is often seen as an uphill battle. Indeed, the U.S. Supreme Court has stated that “courts may only vacate an arbitrator’s decision ‘only in very unusual circumstances.’” Oxford Health Plans, LLC v. Sutter, 569 U.S. 564, 568 (2013). The Federal Arbitration Act provides limited grounds to seek the vacatur of an arbitration award. In Lund-Ross Constructors v. Duke of Omaga, LLC, ___ N.W.3d ___, 33 Neb.App.73, the Nebraska Court of Appeals found that an arbitrator’s conduct warranted the partial vacatur of the award, which granted relief to a subcontractor who filed a counterclaim after the arbitration hearing had closed.

Lund-Ross contracted with Duke of Omaha to build an apartment complex in Omaha. Lund-Ross, in turn, sub-contracted with A Raymond Plumbing. Following completion of the building, Owner withheld payment from Lund-Ross, who in turn, withheld payment from Raymond. Both Lund-Ross and Raymond filed mechanics liens and initiated suits; Raymond’s suit ultimately was dismissed for want of prosecution. Lund-Ross proceeded to arbitration with Owner, naming Raymond as a respondent. Raymond did not participate in the arbitration as a claimant at the time of the hearing.

During the arbitration, Raymond’s principal testified and sought to assert its claims against Lund-Ross. As Lund-Ross sought to cross-examine Raymond, the arbitrator terminated the examination and determined that it did not have jurisdiction to hear Raymond’s claims. After the hearing closed, but before the arbitrator issued an award, Raymond sought to enter the arbitration with a counter-claim against Lund-Ross. The arbitrator permitted the counterclaim. Lund-Ross objected that Raymond’s counterclaim was untimely. Without ruling on Lund-Ross’ objection, the arbitrator entered an award granting relief to Lund-Ross, but also awarding over $215,000 to Raymond and against Lund-Ross. The arbitrator denied Lund-Ross’ motion to correct the award.

Lund-Ross filed a motion in court to confirm the award in part (to its award) and to vacate the portion of the award granting relief to Raymond. With respect to the motion to vacate, the trial court found that none of the four grounds in Section 10 of the Federal Arbitration Act were present and thus the award had to be confirmed. Section 10 permits vacatur of an arbitration award where:

1. The award was procured by corruption, fraud, or undue means;

2. There was evident partiality or corruption in the arbitrations or either of them;

3. The arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any misbehavior by which the rights of any party have been prejudiced; or

4. The arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

On appeal, Lund-Ross argued that the third and fourth grounds warranted vacating the arbitration award. The court noted that a party seeking relief from an arbitration award “bears a heavy burden.” With respect to Lund-Ross’ argument the arbitrator exceeded his powers or executed them imperfectly, the Court noted that the only question to review was if the arbitrator interpreted the contract. Because the record showed the arbitrator did interpret the contract, relief under that theory was unavailable.

However, with respect to the argument that the arbitrator conducted misconduct by terminating Lund-Ross’ cross-examination of Raymond’s principal, the Court found that argument had merit. The Court held that the FAA does not require the arbitrator to hear every piece of evidence; parties must be accorded with a fair hearing and an adequate opportunity to present their case. If the arbitrator refuses to hear “pertinent and material” evidence and that refusal prejudiced the party’s rights, a court properly may vacate an award. Turning to the facts, the Court held that in terminating the Lund-Ross’ cross-examination of Raymond’s principal, and then considering the post-hearing counterclaim, the arbitrator was "guilty of misconduct and misbehavior that prejudiced Lund-Ross’ rights."

The Court finally turned to whether the Nebraska law or the FAA allows the simultaneous partial confirmation and partial vacatur of an arbitration award. Finding no applicable precedent in Nebraska or the Eighth Circuit, the Court noted that courts in Connecticut and the Second Circuit have frequently permitted the partial confirmation and partial vacatur of an arbitration award. Relying on those cases, the Court affirmed the part of the award in Lund-Ross’ favor but vacated part of the award in Raymond’s favor.


Editor Brendan J. Witry is an Associate at Laurie & Brennan LLP. His practice focuses exclusively on representing and advising owners, contractors, and trade contractors in construction disputes at all stages. 

Thursday, October 3, 2024

Toolbox Talk Series Recap - Guided Choice Mediation

In the September 26, 2024 edition of Division 1's Toolbox Talk Series, Clifford Shapiro presented on Guided Choice Mediation (“GCM”) and how it can lead to better outcomes in construction disputes. GCM is an approach to mediation that focuses on early and efficient dispute resolution, which prominent mediators created as a public interest project. 

Shapiro described his particular variant of GCM based on his experience while acknowledging that other Guided Choice Mediators’ processes may differ from his in various ways.  Shapiro’s brand of GCM focuses on ensuring that parties have reasonable expectations and appropriate settlement authority prior to arriving at a mediation.  Some of the strategies to help accomplish these noble goals are (i) early mediator engagement, (ii) mediator facilitation of information exchange, (iii) mediator involvement with insurance issues (particularly important in construction defect cases, especially those with multiple defendants), (iii) pre-mediation ex parte meetings, and (iv) mediator participation in risk analysis. These strategies are not typical in the more traditional/historic approach to mediation in which mediation is scheduled based on a scheduling order, mediation statements are sent to the mediator roughly a week before the scheduled mediation (and sometimes not even shared with anyone other than the mediator), and the parties speak with the mediator for the first time on the day of the mediation.

While any experienced lawyer has likely suffered through lengthy sessions where mediators must provide a reality check to the other party (or your own!), GCM moves such conversations, or at least their initial stages, to pre-mediation ex parte meetings.  Shapiro opined on how this kind of risk analysis is crucial to the GCM, both before and during the mediation.  While similar in concept to the evaluative mediator, the Guided Choice Mediator takes a facilitative role in leading the risk analysis and does so preemptively rather than waiting for an impasse.  At the same time, Shapiro acknowledged that a guided choice mediator will have to be evaluative at times.  In this sense, it is critical to the success of a GCM that the parties select a mediator who is willing to take an active role in risk analysis and who can effectively challenge each parties’ positions.  Likewise, parties must come to the table with sufficient knowledge and analysis to meaningfully participate in the risk analysis process.

In the right situation, with the right mediator and willing parties, GCM can facilitate a rational, well-informed settlement as early as possible.  It is an inherently flexible process that the parties can customize to the unique needs of a specific dispute to drive each other towards rational, reasonable positions.  However, Shapiro cautioned that GCM will have limited success if the parties are not willing to engage in the process or spend the time and resources needed to go into the GCM with sufficient knowledge and settlement authority.

Thank you to Clifford Shapiro for the perspective and explanation of GCM.


Author Douglas J. Mackin is a construction attorney with Cozen O’Connor in Boston, Massachusetts. Doug counsels owners, developers, contractors, and subcontractors in all phases of a construction project, from contract negotiation through to completion, including disputes, litigation, and arbitration. Doug can be contacted at dmackin@cozen.com.

Tuesday, September 24, 2024

eDiscovery Planning for Construction Litigation: Your Definitive ESI Protocol Checklist

A detailed ESI protocol will clarify eDiscovery and lead to smoother case planning in every step of the construction litigation process.

Establishing an ESI protocol might seem daunting at first, but answering a few simple questions at the outset of your case will help you stay on top of complicated and confusing eDiscovery matters. This process is even more important in construction litigation, which often includes large amounts of complex data from several different sources and custodians. This checklist lays out the questions that will help you create a strong ESI protocol and maintain a smooth eDiscovery process in your construction cases.

What is an ESI protocol?

ESI stands for Electronically Stored Information, or the digital evidence that dominates most modern litigation – especially construction litigation. Your ESI protocol will lay out your plan for handling this digital evidence. It covers how you will collect and filter data, deduplicate documents, produce evidence, manage privilege logs, and much more. It becomes the road map that guides you through discovery (and beyond!).


With strong ESI protocols, you’ll show up to your Meet and Confer knowing exactly what you need from opposing counsel. These clear requests will prevent road bumps later on in discovery.


What are the benefits of a standardized ESI protocol?

Here are five key advantages that lawyers gain through developing a protocol:


1. You’ll think through discovery for the entire matter.

2. A well-drafted protocol will protect your client’s data and their interests.

3. You’ll identify sources of data that require additional consideration and planning for collection and production.

4. You can leverage the protocol for third-party data.

5. It’s your discovery blueprint for the case and you’ll go back to it time and time again.


Your ESI Protocol Checklist

Think through these questions to ensure that no potential issues are overlooked when developing your protocol for construction litigation.


1. Do you currently have an ESI protocol template in-house?

If you have protocols from past cases, you can use them to create a basic template and tailor it to meet the needs of your current case. If not, there are many matters today where acceptable ESI protocols have been submitted and approved, and those can be helpful in building your own. 


2. What type of case are you involved in, and what are the relevant common data challenges?

The type of case you’re working on will influence the types of ESI that you’ll need to focus on in your protocol. In our last post on The Dispute Resolver, we covered three common data challenges that we typically see in construction litigation. Understanding these challenges is an essential step in crafting an ESI protocol that is tailored to your case.


3. What type of productions have you delivered/received in the past, outside of your current matter?

Think about what you can learn from previous productions. What metadata did you find most useful? Were there times that you needed files in their native format? Did you face any hiccups that could have been prevented? Looking at some “lessons learned” from past matters can be helpful to better customizing your ESI protocol so it covers what you need. 


4. What type of venue will the proceedings be held in?

Consider whether there are any discovery rules or guidelines specific to the venue of your case. Some Federal Courts have detailed guidelines that instruct the parties how to navigate eDiscovery, but unfortunately, most State Courts haven’t addressed these issues. 


5. What type of firm(s) is your Opposing Counsel? (e.g. Mid/Large/Solo)

Different sized firms will have varied resources and approaches to eDiscovery. If you work in a small firm, here are some tips on how to level the playing field in eDiscovery.


6. Where will the majority of your data be collected from?

Think about potential relevant custodians and where their data lies. Will you have to physically collect data from a laptop or backup server? Are social media accounts going to play a role in the case? Is relevant information being discussed in text message form?


7. Is there any proprietary software at issue?

Proprietary or closed-source software is copyrighted by the developer and not free for open use, which can complicate its role in legal issues. You may want to include discussions around cost sharing for necessary licenses. Construction litigation often involves proprietary software used for building information modeling (BIM) such as Autodesk Revit, as well as specialized project management software such as Primavera or Buildertrend.


8. Will there be any hard-copy paper documents to collect?

Consider whether you can negotiate to have paper documents scanned prior to production to simplify review. Ensure proper measures are being taken at the time of scanning, so organization structures are not lost during an electronic conversion.


9. What type of metadata do you anticipate being most crucial during your review? (i.e. When v. Where v. Who)

Metadata, such as timestamps and email authors, is key to streamlining document review. Even if the information is included in the text of the document, it’s still important to ensure that metadata is included in a load file for searching and filtering purposes. It always works better to discuss this upfront because it is extremely difficult to recreate missing metadata after the fact. 


10. Will any culling/filtering method be applicable in your case?

If you or your opposing counsel plan to use predetermined search terms, predictive coding, or other TAR (Technology Assisted Review) tools, you should specify how they will be applied. In any case, early data filtering is an important part of simplifying discovery and reducing costs, so consider which methods you will use and how much transparency you may want between parties.


11. How do you want privilege and/or your privilege log handled?

With the large data volumes common in most modern litigation, it’s become increasingly difficult for lawyers to prevent inadvertent disclosures. Creating a no-fault standard in your ESI protocol can help deter discussions around “reasonable steps” if said disclosure occurs in the course of discovery exchange.


12. How do you want deduplication handled? (i.e. Universal v. Isolated Source)

Deduplication is one way you can reduce your initial data set. Here are some tips for better understanding deduplication.


13. What are your production delivery methods and goals?

Be sure to specify a secure delivery method for the productions. Electronic deliveries are the most efficient solution and offer more protections than sending physical hard drives. However, you must be sure to select a secure file-sharing tool, such as Nextpoint’s data exchange feature.


Click here to download a PDF of the ESI protocol checklist.


Additional Resources


Co-Author Sonali Hanson is the Managing Partner of Nextpoint Law Group and General Counsel for Nextpoint. With over 11 years of experience in the legal field, she has deep experience at the intersection of law, data and technology. She has assisted construction law firms across the country with complex discovery issues, including predictive coding, ESI protocols, data collection, data mining, collections and production. Sonali can be reached at sray@nextpointlawgroup.com.

Co-Author Megan O’Leary has consulted on hundreds of projects, working with many of North America’s top law firms as an expert in litigation communication consulting as well as eDiscovery. She specializes in the visualization of complex legal and technical concepts through the use of clear and compelling demonstratives. Her background in mechanical engineering enables her to specialize in energy, intellectual property, trademark, and product liability matters; however, she has consulted on almost every major area of litigation. Megan can be reached at moleary@nextpoint.com.