Perspectives from Pioneers: Kenneth C. Gibbs

Pioneers are not only skilled practitioners, but boundary-setters. Those who have helped define what is possible in their field. Their voices offer both experience and foresight. In this inaugural edition of Perspectives from Pioneers, I asked Kenneth C. Gibbs, Esq., widely regarded as the Dean of Construction Dispute Resolution, to share insights from his extensive career mediating, arbitrating and conducting neutral evaluations in multi-million-dollar construction, energy, insurance and other business disputes. Ken, a pillar in the construction industry, has successfully mediated more than 2,500 cases and arbitrated over 200 cases in 25 states involving bridges, dams, arenas, highways, subways, tunnels, airports, hospitals, hotels, office buildings and other major projects.

Globally, you are considered a pillar of the construction mediation and arbitration industry. How did you achieve this?

Being considered a “pillar” or a “pioneer” of the construction ADR community is a bit embarrassing for me, as I still consider myself a simple country lawyer.

I’ve been extremely fortunate in my career. In 1974, upon graduation from law school, I was immediately involved in, at that point, one of the largest construction disputes in California history—the construction of the Cedars-Sinai Medical Center in Los Angeles—where I was the co-first chair in the representation of the general contractor and its subcontractors. Immediately following that, I led a team to a successful result involving a major construction project at the San Francisco Airport. So, at 32 years old, I was an “expert” construction litigator with a growing reputation.

Through promotional efforts and word of mouth, the firm that I started in 1978 with two attorneys quickly grew; by 1988, we had about 40 attorneys. By that point, I had attracted 5 of the 10 largest contractors in California as clients and had also attracted a large number of public agencies, including counties, cities and various school, water and other districts. Meanwhile, I co-authored a text titled California Construction Law, which was cited in several court cases. I traveled around the country giving seminars on construction law with, of course, an emphasis on California.

Because of these efforts, by the 1990s I had acquired a reputation as one of the top practitioners of construction law in the country, and my firm had become the largest “boutique” law firm specializing in construction west of the Mississippi.

Throughout my career, I had always dabbled in arbitration. I was on the large and complex construction panel of the American Arbitration Association (AAA) and was one of AAA’s “go-to guys” in California for high-value construction cases. Beginning in the late 1970s, I did about four arbitrations per year and received positive reviews. By the late 1980s, it became clear that mediation was emerging as an efficient way to resolve complex construction disputes. In the late ’80s and into the ’90s I appeared as an advocate, representing clients in many construction mediations, and I very much enjoyed the process and the results I obtained. There were fewer mediators back then, and fewer still who understood construction law, so my “mentor”—unbeknownst to him—was the legendary Coley Fannin of JAMS. He came across as knowledgeable but relaxed, and just watching him in action taught me a lot. He drilled into my head that “the first thing you’ve got to do is to identify the impediments to resolution.” That line has stuck with me ever since.

By 1999, I decided that I really wanted to shift the direction of my career, so I sent a message to every attorney I knew around the country announcing that I was going to do ADR full time. I started off doing two mediations per month, which rather quickly became two mediations per week.  This snowballed to the point where I was doing three or four mediations per week, as well as arbitrations. I joined JAMS in 2007, and I’ve now handled mediations and arbitrations in 25 states. 

Do you have any advice on how to become a knowledgeable and highly respected construction neutral?

I think there are three keys to becoming a highly respected construction ADR neutral: subject matter knowledge, demeanor and the ability to read the room.

Not only does the construction industry have its own jargon and ways of doing things, but so too do advocates who come before you. Construction projects, and the disputes that can arise from them, are complex; it is essential that that neutral have sufficient subject matter knowledge to separate the wheat from the chaff. Knowledge of scheduling and cost principles, together with knowledge of applicable case and statutory law, is essential, whether in arbitration or mediation, for the neutral to get to the heart of a matter.

Another commonality between arbitration and mediation is the neutral’s demeanor. Calmness and control are needed in both to guide the process in an efficient and effective manner. I make every effort to listen and not show emotion or tip my hand when hearing disputes. In fact, in mediations, I generally start by going room to room to hear what the parties and their counsel have to say, without injecting too many of my thoughts as to the merits. I do ask “devil’s advocate” questions to find out information and demonstrate that I know the issues of the dispute, but a calm and thoughtful demeanor is necessary to gain the trust of all concerned.

Finally—and this is something that cannot be taught very easily—during mediations, a neutral needs to read the room by listening to what is said and noting what is not said, and even reading body language. Anyone can shuttle offers and counteroffers back and forth, but it takes highly skilled neutral to evaluate the true positions of the parties and figure out what will work and what won’t. If I have strength as a mediator, it is derived from my ability in this regard.

In the ADR community, it is generally accepted that not every mediator is a great arbitrator and, likewise, not every arbitrator is a great mediator. Despite this, you have managed to master both. What are the commonalities and differences in the practices? What are your suggestions to those who want to pursue both practices?

I completely agree with the proposition that not every mediator is a great arbitrator and not every good arbitrator is a good mediator.

Although there are commonalities in both practices, I think that there are also some different skill sets that come into play in arbitrations versus mediations. The general common skills in mediation and arbitration are subject matter knowledge, the ability to weigh the facts and know the law and the ability to listen.  The additional general arbitration skills are general knowledge of rules of procedure, award writing, and firm control of the process so that the matter is heard timely and in an efficient manner. The additional general mediation skills are risk evaluation, keen people discernment and observation, humility, and empathy.  These skills, while important in mediation, are less important in arbitrations.  The person who is able to blend the skills of both practices as well as the embrace the differences based upon the type of proceeding is more likely to find success as a both mediator and an arbitrator.

While generalities are always dangerous, I have found that judges who come off the bench usually make better arbitrators than mediators, perhaps because their adjudication techniques have been honed over years of hearing cases. I have also found that mediators tend to be more generalists and may not have practiced construction law.

I’ve found that lawyers who were in the trenches make the best mediators of construction disputes because they can recognize the strengths and weaknesses of the parties’ positions, having been there and done that. I think that is one of my strengths, and I think that it is a necessary element of being a top-notch construction mediator. There is no substitute for subject matter knowledge, and while a construction arbitration can certainly be handled by an individual—such as a former judge—who is used to hearing and evaluating arguments, the traits of a mediator in effectuating resolutions are much more subject matter oriented. 

There is no real need to read people in arbitrations other than to establish the veracity of the testimony they give. In mediations, it’s my opinion that reading people is one of the chief skills necessary. So, while there is crossover regarding evaluating the merits of a given matter, there is a different skill required to have the parties recognize the risks they run if the case goes to trial. This risk evaluation, coupled with the art of convincing the parties to realistically evaluate their risks, is the key to the mediation process and the key to being an outstanding mediator.

In your practice, what do you see evolving due to technology, supply chain issues, global stability, etc.? How are the industries in which you practice changing based upon the world today, and how is the ADR community adjusting to these changes?

ADR has certainly evolved in the last six years. In 2019, the thought of conducting virtual mediations and arbitrations via Zoom or other applications was way out there, and almost all ADR hearings were conducted in person. Today, more than 50% of mediations conducted by JAMS are virtual, and even those conducted in person usually have some participants appearing virtually in a hybrid hearing. Interestingly, my personal practice seems to bucking the trend. I estimate that 75% of my mediations are conducted in person, probably because the stakes of my mediations are usually very high.

Another major factor that is going to change the way ADR, and particularly arbitrations, proceeds is the introduction of AI into the process. I’m not an expert, but there is no doubt that AI will play a growing role.

Supply chain issues, tariffs and the global economy will continue to have an impact on construction projects and disputes arising therefrom. Whether an event is force majeure or a delay chargeable to a particular party in the construction process is certainly going to be up for debate as we go through the uncertainties of the current environment.

As you reflect on your body of work and your stellar career, what are some of the pivotal or significant moments, and what did you learn from those moments?

My 52-year career can be divided almost exactly in half: the first 26 years representing clients on major construction projects and the second 26 acting as an arbitrator or mediator of claims regarding construction. I had great luck and attracted some wonderful general contractor and design professional firms to represent early in my legal career. I formed a strong team, which included scheduling and forensic accounting firms, and we were successful on many projects, including major hotels, hospitals, prisons, office buildings, wastewater treatment plants and transportation projects. As my career progressed, I was given the opportunity to represent virtually every county in Southern California and at least 10 major cities around the state. One of my most memorable assignments was representing the Metropolitan Water District of Southern California when it constructed the seventh-largest earth fill dam in the world. My takeaway from all that work is to build a strong team, delegate work appropriately and always have your client’s best interest in mind.

It's hard to pick out one or two matters that I’ve mediated or arbitrated, but I take great pride in having helped resolve issues relating to airport construction in Los Angeles, Seattle, Salt Lake City, Dallas-Ft. Worth and New York. Additionally, I’ve enjoyed working on subway and light rail projects in New York, Los Angeles, Houston, Denver, San Francisco and Seattle. The saying “A mediation is not an event; it’s a process” comes to mind. All of the matters listed above took multiple efforts over a significant number of sessions. The lessons learned can be summarized by the thought that a mediator should never give up trying and should always follow up to see if circumstances have changed or evolved and may allow for a settlement.

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Author and Interviewer Lisa D. Love, Esq., FCIArb. is an accomplished arbitrator, mediator and neutral evaluator with JAMS who brings to her work as a neutral extensive experience as a complex commercial transactions attorney. Ms. Love has served as a neutral in a wide range of complex commercial transactions and legal disputes, including those focused on investments, corporate finance, securities, mergers and acquisitions, construction and infrastructure projects and development, energy, life sciences, licensing and technology transfers, franchises, commercial real estate, antitrust, government and public agency, and corporate governance matters.

What Everyone Needs to Know About Schedule Float

Scheduling for a contractor is essential and helps contractors organize work, manage subcontractors, and avoid costly delays. An accurate schedule helps a contractor to keep a project on track, meet deadlines and assist in preventing conflicts between different subcontractors working on a project. In short, construction scheduling is a key tool for completing projects efficiently and successfully.

There are different types of schedules including bar charts (Gantt charts), critical path method (CPM) schedules, look-ahead schedules, and linear scheduling for repetitive tasks. Each type serves a different purpose, from providing high-level overviews to detailed task sequencing and daily or weekly planning. CPM schedules are very common and often considered the best type of schedule because they not only illustrate the sequence of activities but also identify the critical path, helping contractors prioritize tasks, manage delays, and keep the project on time. A CPM schedule also highlights where there is flexibility or potential risk.

Contractors deal with deadlines on every project and meeting every deadline on a project can often feel like walking a tightrope. This is where schedule float or slack comes into play.  Understanding float is critical for successfully managing risk, making informed decisions, and keeping projects on track.  In construction scheduling, “float” is a term of art in critical path method (CPM) scheduling that represents the amount of time a given task or activity can be delayed without delaying the project’s overall completion date.[i] Activities that have float are considered non-critical, meaning they are not located on the project’s critical path.[ii] An activity with zero float is on the critical path. 

Modern scheduling practices distinguish between two types of float: “free float” and “total float.” Total float refers to the time an activity may be delayed without pushing back the project’s final completion date.^[iii] Free float is a subset of total float and is the amount of time an activity can be delayed without affecting the early start of any succession activity.[iv] Both types of float are important in scheduling but they serve different purposes. Float allows the contractor to define priorities and allows a contractor to resequence activities or reallocate resources as the project moves forward without causing delay. However, if a noncritical activity is delayed to the extent that all the float is consumed, then that activity moves onto the critical path.

The determination of float is based on the anticipated duration of each activity, which in turn is calculated by estimating productivity under reasonably foreseeable conditions.^[v] When an activity has positive total float, it is expected to finish on or before its late finish date, with actual timing depending on how much float is used as the work progresses. However, if an activity has negative float—meaning it is already projected to delay the overall schedule—then the critical path is affected, and the estimated project completion date is pushed back accordingly.^[vi] In such cases, the contractor may seek a time extension, resequence the work, take steps to accelerate, or accept the late completion and related consequences. 

Who Owns the Float?

When the contract does not explicitly allocate float, disputes often arise when the owner and contractor wish to use the same float to cover their respective delays. Over the years, three main theories have emerged among the parties: (1) the contractor owns the float, (2) the owner owns the float, or (3) the project (or “neither party”) owns the float. Disputes over float ownership frequently arise between owners and contractors, because both parties seek to use the float for their own benefit. Owners may claim a contractual right to control the float, while contractors generally want to retain control to maintain flexibility in their scheduling. 

If float is considered to be the contractor’s, then the contractor has the right to defer commencement of activities not on the critical path until the last possible date—effectively placing all of them on the critical path.[vii] Float can also allow a contractor to define priorities and resequence activities or reallocate resources as the project moves forward without causing delay.[viii] However, if a noncritical activity is delayed to the extent that all the float is consumed, then that activity moves onto the critical path.  In such a scenario, changes requested by the owner that affect the entire schedule, may entitle the contractor to a time extension, or additional compensation for acceleration of activities to stay within the schedule.

If the owner is entitled to the float time, the owner could cause delays in commencing any non-critical activity, leaving the contractor with no flexibility to adjust starting or completion dates for the affected activities.[ix] Thus, if sufficient float exists, then the owner can argue that there is no basis for a time extension.

In the absence of contractual provisions regarding ownership of float, the party using the float first generally owns it.[x] In other words, the “float” is a shared resource “owned by the “project” rather than by either the contractor or owner, and may be consumed by either party without liability to the other on a “first come” basis.  Float is an expiring resource that can be used by any party to the contract, provided that party acts in good faith. As a result, either party may use available float on a first-come, first-served basis, with no resulting liability to the other unless the delay extends beyond the float and impacts the project’s completion. 

Modern Jurisprudence: Shared or “Project” Float (First-Come, First-Served: Modern Rule)

An intermediate approach referred to as the shared-float concept has developed for when the contract is silent on float ownership. Under this approach, courts generally hold that a construction schedule’s float is available to the party who uses it first.[xi] Thus, a delay is mitigated by the float and does not delay the project; thus, the party responsible effectively benefits from the float and cannot be charged for a project delay nor claim one, as the case may be.

For example, in In re Blackhawk Heating & Plumbing Co., the General Services Administration Board of Contract Appeals focused on whether the Government delay alleged by the contractor resulted in a delay to the project completion date.[xii] On appeal, the Board determined that at the time of the Government delay, there was sufficient float available in the schedule for the Government to absorb its delay; therefore, there was no resulting impact to the project completion date.[xiii] The Board of Contract Appeal in In re Dawson Construction Co. denied contractors’ time extensions when the Government had caused delays and, rather than extend the project completion date, simply used the remaining float.[xiv]  

In In re Santa Fe, Inc., the contractor argued that time extensions were warranted due to changes made by the Government.[xv] The Government disagreed, asserting that the affected tasks had sufficient float and that the contract only allowed for an extension if all float associated with the activity had been exhausted. The Veterans’ Administration Board of Contract Appeals sided with the Government, reasoning that an equitable time adjustment is only appropriate when a Government-mandated change delays the project’s overall completion.[xvi] Since the delays were absorbed by existing float, no extension was justified.

Lastly, in Maron Const. Co., Inc., the contract included a provision stating that if the Government altered the work in a way that delayed the project’s completion, an equitable adjustment would be provided.[xvii] However, since the delay caused by the change could be accommodated within the existing float and did not push back the completion date, the Board concluded that no time adjustment was necessary.

In the absence of clear contract terms, float is generally treated as a shared project resource, available to whoever uses it first. Understanding schedule float is critical and learning how to use float to your advantage can provide flexibility dealing with delays without affecting project completion.

How to Manage the Scope & Costs of eDiscovery: Understanding the Recently Released AAA eDiscovery Best Practices

When you’re heading down the path toward litigation or arbitration, you have to collect and manage documents and files. These can be emails, drawings, spreadsheets, images, videos, text messages, reports, and anything else that you need to tell your client’s story. When managing electronically stored information (ESI), it’s crucial to effectively collect, preserve, review, and produce the ESI to avoid unnecessary delays and soaring costs.

This is so important that the American Arbitration Association (AAA) recently released a set of “E-Discovery Considerations for Construction Arbitrations” in conjunction with the National Construction Dispute Resolution Committee (NCDRC). The purpose of the paper is to “highlight for arbitrators and parties the need to actively manage the ediscovery process” to achieve an “efficient and cost-effective dispute resolution.” 

When you collect documents, emails, images, and files from your client, you have to store them somewhere. Regrettably, many firms simply copy them to a local server, or a cloud-based storage service such as Dropbox, or even their own computer. These are lax and risky workflows unless your firm has instituted security best practices, can track access logs, and can defensibly ensure no ESI is modified before production (see Consideration #5 on document preservation). Not to mention that these basic storage approaches don’t give you the ability to search, filter, and sort files, nor can you tag items for relevancy and privilege or indicate their use for a witness. It’s crucial to use the right tool for storing, reviewing, and producing ESI, as it will become the foundation for your defensible ediscovery workflow.

As the AAA report states, “Ineffectively managed ediscovery is a potential source of cost, burden, and delay. Because construction projects typically involve large volumes of records and data, managing ediscovery demands a careful balance between efficiency and economy on the one hand and providing the parties a full and fair opportunity to present their cases on the other.”

Here is a breakdown of some of the key themes from the AAA guidelines along with specific tips and tools to help you follow them properly and practically.

Consideration #1: Cooperation – Zealous Advocates Can Still Cooperate

In 2008, The Sedona Conference (a think tank on ediscovery issues) released the idyllic-sounding “Cooperation Proclamation,” which provided recommendations for achieving the goal of a “just, speedy, and inexpensive determination of every action” (Federal Rules of Civil Procedure 1). That goal is echoed in the first ESI Consideration from the AAA guidelines, which states, “Zealous advocacy is not compromised by conducting discovery in a cooperative manner.” Being willing and able to discuss the logistics of collecting, reviewing, and producing ESI with opposing parties is the first step in effectively managing the cost and potential burdens involved in ediscovery.

Federal Courts require a “meet & confer” between the parties where they discuss a number of topics, including the sources and types of potentially relevant ESI, as well as how the parties will produce files to each other. While there is typically no such requirement in arbitration proceedings, the AAA guidelines offer Consideration #3 – Initial Assessment and Planning, where the parties are encouraged to meet to “discuss the necessity of ediscovery” as well as the scope of such discovery. Consider using a Meet & Confer eDiscovery Checklist that provides tactical guidance for discussing and negotiating ediscovery with opposing counsel.

Consideration #3 also encourages the parties to “memorialize their agreements regarding ediscovery in a plan or protocol that outlines the types of ESI considered relevant, the timeframe for document production, and the methods for exchanging documents.” This “ESI protocol” is an indispensable instrument for avoiding unnecessary delays and costs around discovery in construction disputes, but unfortunately, it’s often overlooked or ignored. The AAA guidelines provide a helpful ediscovery checklist and ediscovery protocol template. An ESI Protocol eDiscovery Checklist can help you develop a protocol for your practice. Once you have a standard ESI protocol in place, it’s easy to edit and adapt it for different matters. 

Consideration #6: Collection and Processing – Choose the Right Platform to Securely Store ESI

As you work with your client to collect the data that will help you tell their story, you must collect it all “in a manner that preserves the integrity of the electronic information” (Consideration #6) and you must store the ESI in a secure location that prevents modification of the evidence. Most storage locations at law firms (e.g. servers, cloud-based storage services, etc.) are designed to host and manage your internal work product, but they are not the right tool for protecting electronic evidence. Fortunately, there are ediscovery platforms that are specifically designed to secure electronic evidence and provide precise tools that allow you to sort, filter, search, and tag evidence, separate from your work product. For example, your personal Microsoft Outlook is designed to manage your communications with colleagues and clients, but it is NOT an appropriate tool for reviewing and producing emails collected from a client (see “eDiscovery with Outlook: 3 Reasons Why Outlook is NOT a Document Review Tool”).

In the processing stage of ediscovery, the collected ESI is typically converted into a reviewable format while still preserving the original files. For example, when you import collected ESI into a document review platform, the original files are always available for download, but the reviewer sees a simplified, imaged version of the file for quicker review along with tools to redact text and place additional annotations. These platforms also filter out irrelevant or redundant files during the processing stage for a more streamlined review, although you can always access the original files if necessary. 

Consideration #8: Production and Exchange – A Smooth Handoff

The end goal of a successful ediscovery project is an effortless production of relevant ESI from one party to another. If you’ve discussed and agreed upon an ESI protocol, then you already know the “form or forms” (see FRCP 34) your production will take (e.g. native files, PDFs, TIFFs, etc.). However, you will be severely limited in which production formats you can generate without a proper ediscovery tool. Using an ediscovery platform to narrow down your production collection (e.g. all documents marked “relevant” but not “privileged”) gives you the industry-standard options for creating a production set that follows the agreed-upon parameters. 

You also want to ensure your clients’ data stays in the right hands after the production has been shared. Several ediscovery tools offer secure file sharing options to minimize the risk of unauthorized access to production sets. 

There are many more helpful best practices in the AAA “E-Discovery Considerations for Construction Arbitrations,” and we certainly encourage you to read through the guidelines to be better prepared for your next ediscovery challenge. Consider using an ediscovery vendor to assist you in accurately following these ediscovery considerations.

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Additional Resources: 

• eDiscovery Collections eGuide: The Definitive Guide to Managing Modern Data Collections

• Strategic Document Review eGuide: Your Complete Guide to Reviewing Electronic Evidence, Protecting Privilege & Winning Discovery

• Winning the Meet & Confer eGuide: How to Set Comprehensive Ground Rules for eDiscovery

Brett Burney is the VP of eDiscovery Consulting at Nextpoint Law Group and a widely recognized authority on the complex ediscovery issues facing litigators today. In addition to consulting with corporations and law firms on their data management and legal technology issues, Brett is a journalist, podcaster, speaker, and author. Brett can be reached at bburney@nextpointlawgroup.com.

When Cost-Cutting Backfires: The Hidden Technical Risks of Material Substitutions in Construction Litigation

Material substitutions are nothing new in construction. They can be legitimate responses to site constraints, lead times, and budget pressure. But in recent years, I have observed a growing trend: these substitutions are occurring more frequently and often carry greater risk. Global supply chain disruptions, material shortages, and tariffs have all played a role, forcing project teams to substitute alternative products midstream. What is often missing is the thorough engineering review required to assess whether those changes are technically appropriate.

As a structural forensic engineer, I have investigated a growing number of failures stemming from these seemingly "small" changes. Sometimes the materials themselves are not defective, but they behave differently from the originally specified product in subtle yet critical ways. When those differences are not adequately understood, building performance suffers, liability gets murky, and construction defect claims emerge.

This article explores the technical risks of mid-project substitutions and how they often become the centerpiece of legal disputes.

The Cost of Convenience: When Small Changes Lead to Big Problems

Substitutions can be made on a project for a variety of reasons. A supplier may recommend a different product, a contractor may propose a value-engineered change, or a material may simply be unavailable. These decisions are sometimes made informally – approved via email, embedded in an RFI, or passed through a shop drawing – without fully appreciating the performance implications.

The following examples are drawn from real-world cases I’ve been involved in, though modified slightly to preserve confidentiality. Each of these cases involved a material substitution that, on paper, seemed reasonable. None involved clearly defective materials. The issues emerged from a variety of circumstances, including mismatches in performance, overlooked fabrication behavior, environmental incompatibility, or other context-specific concerns.

• Galvanic Corrosion from Dissimilar Metals. In a coastal building, stainless steel anchors were substituted in place of hot-dip galvanized ones for curtainwall supports. At first glance, stainless steel seemed like a reasonable alternative – it’s typically more durable and corrosion-resistant. However, in practice, the combination of stainless steel fasteners and aluminum framing in direct contact without proper isolation triggered galvanic corrosion. Within several years, rust staining and material deterioration became visible at the façade. When damage appeared, the parties disputed who had responsibility to assess compatibility: the delegated designer, the engineer of record, or the contractor. Ultimately, the substitution had been made without sufficient evaluation of the galvanic corrosion risk in a coastal environment. 

• High-Strength Rebar—But at What Cost? In a large foundation system, high-strength rebar was proposed to be utilized in place of conventional rebar to reduce congestion and expedite installation. Fewer pieces and simplified layouts made the change attractive. However, the rebar’s material properties introduced new risks. High-strength steel can be more susceptible to cracking, such as due to hydrogen embrittlement, especially when combined with certain fabrication and coating processes. In this case, cracking was observed at bends following galvanizing, potentially resulting from a combination of contributing factors, including embrittlement risk, lower ductility, complex geometry and fabrication sequence. While the material met design strength requirements for service conditions, the performance implications during fabrication were not fully evaluated when the substitution was made.

• Incompatible Joint Sealant Causing Water Damage. At a high-end retail complex, the specified construction joint sealant for plaza-level waterproofing became unavailable due to material shortage. The contractor proposed a substitute that had been used successfully in prior projects. Within months of project completion, water intrusion was reported. Forensics revealed that the sealant had debonded at several locations, allowing moisture to bypass the waterproofing system. The substitute product, though suitable for narrower joints, lacked the elongation properties needed for the wider joints and high thermal movement expected at the site.  While the product itself was not defective, it was incompatible with the specific geometry and performance demands of the design.

• Hollow Structural Section Substitution and Excessive Deflection. In another matter, ASTM A500 Grade C rectangular tubes were replaced with imported metric hollow sections due to tariff-related procurement constraints. The substitutes were close in size and strength but varied slightly in wall thickness and stiffness. After construction, the building experienced excessive lateral drift exceeding design expectations under service loads. A forensic review revealed that the lower flexural stiffness of the substituted members, especially at critical moment connections, contributed to the observed deflection. This case underscores that even small deviations in geometry or material properties, especially in systems governed by serviceability rather than ultimate strength, can have real-world consequences.

In each of these case studies, a thorough evaluation of the technical implications of the substitutions was missing or incomplete. This is what makes substitution-related claims so complex. Failure is not always obvious, and responsibility often falls between scopes. Delegated design plays a role, but so does the engineer of record. Contractors may initiate changes, but design professionals must evaluate them, and sometimes, under time pressure and with limited information.

The Role of the Forensic Engineering Expert

In construction defect claims involving material substitutions, my work typically includes:

• Tracing the Change: Reviewing project records to identify when the substitution was introduced, under what documentation (e.g., RFI, submittal, shop drawing), and who approved it.

• Comparative Technical Analysis: Examining differences between the specified and substituted materials, including:
• Strength, stiffness, and ductility
• Behavior under fabrication (bending, welding, galvanizing)
• Compatibility with adjacent materials (e.g., galvanic interactions)
• Durability and expected service performance

• Testing and Validation: Conducting lab tests to confirm material properties or diagnose failure modes.

• Causation and Standard of Care: Determining whether the substitution could reasonably have been foreseen to cause the observed issue, and whether the parties met their professional obligations.

Implications for Legal Strategy

For attorneys involved in construction defect disputes, material substitutions raise several important questions:

• Was there proper documentation of the change?
• Was design review delegated, and were protocols followed?
• Did the team comply with relevant standards (ASTM, ACI, AISC)?
• Was an equivalency analysis performed and documented?

In many disputes, the answers to these questions form the foundation of both claims and defenses.

Conclusion: A Call for Caution

In today’s fast-moving construction environment, material substitutions are inevitable. But even small changes can trigger major technical and legal consequences when not properly vetted. A multidisciplinary approach – one that includes design, procurement, construction, and engineering oversight – is often required. From a structural forensic perspective, the lesson is clear: materials cannot be evaluated by nameplate or strength rating alone. Context matters. Geometry, fabrication sequence, environmental exposure, and system interaction all affect performance. Without full understanding, substitutions that seem minor may introduce significant risk.

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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions, position, or policy of Berkeley Research Group, LLC or its other employees and affiliates.

Author: Dr. Thanh Do, PhD, PE, is a Director in BRG’s Global Construction practice. He specializes in root cause investigations of structural failures, standard of care evaluations, construction and design defect analysis, Design-Build delivery, and early dispute resolution. As a structural engineer, forensic investigator, and technical storyteller, Dr. Do helps clients turn complex engineering issues into clear, persuasive narratives in construction disputes.

OSHA Aims to Address the Long Summer Days

As the summer progresses, construction projects across the country will undoubtedly take advantage of the warmth and dry conditions to move towards completion. These long summer days can also lead to concern on the project site, particularly as it relates to the safety of workers exposed to the heat.

In response to the potential dangers that heat exposure can cause, the Occupational Safety & Health Administration (“OSHA”) introduced its first-ever proposed standard titled “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” in 2024. The proposed rule, if implemented, will apply to all employers conducting outdoor and indoor work in all general industry, construction, maritime, and agricultural sectors where OSHA has jurisdiction. However, the proposed rule excludes short-duration employee exposure to heat. Among other requirements, the proposed rule introduces several key requirements aimed at protecting workers from the hazards of excessive heat. If it is implemented, the proposed rule requires employers to conduct regular heat assessments and monitor workplace temperatures.

Specifically, OSHA’s standard introduces specific heat index thresholds that dictate the necessary actions employers must take to protect their workers. With a heat index of 80 degrees or above, employers must ensure that employees have access to an adequate supply of drinking water and provide designated break areas. Where the heat index is 90 degrees or higher, employers must also monitor employees for signs of heat illness and provide mandatory breaks. In addition to these requirements, employers must also provide heat safety training, implement a heat illness prevention plan, maintain monitoring data, and create an incident reporting process.

OSHA’s Advisory Committee on Construction Safety and Health unanimously approved the proposed rule in May of 2024. Most recently, the Department of Labor began a five-day informal rulemaking hearing that will elicit testimony from labor groups and a variety of other groups. However, there is concern that the current administration will not implement the proposed rule given its prior roll back of environmental and safety regulations. Also at issue is whether OSHA’s traditionally broad rulemaking authority will be substantially curtailed post-Chevron, requiring the agency to craft narrowly-tailored regulations that closely track statutes they seek to implement in order to survive a legal challenge to its regulations.  

Critics of the proposed rule argue that these mandates are already implemented in the construction industry. They also argue that the proposed rule increases safety risks, and implements administrative burdens that pose significant challenges for businesses. The critics, though supportive of the aim to protect employees from heat illness, argue that the proposed rule should be flexible and risk-based. That is, critics believe that the heat risks be based on job-specific conditions, regional climates, and worker acclimatization, rather than relying on rigid heat thresholds.

 As the future of the proposed rule remains unknown, so does its impact on the construction industry. If implemented, the construction industry will be required to strategically plan projects and consider the proposed rule’s potential impact on projects. Thus, contractors may be required to consider the heat rules when drafting or agreeing to contractual terms pertaining to project schedules, delay, and the inability to work.

Another issue that needs to be considered is whether the extreme heat set forth in the proposed rule qualifies as an excusable delay event or a force majeure event. These provisions generally exempt a party from paying damages that the other party incurs based on a delay. Typically, these provisions include reference to unforeseeable adverse weather conditions or events. However, the issue becomes whether heat indices exceeding the limits set forth by the proposed rule are unforeseeable weather events, and whether courts sitting in different parts of the country should permit relief under excusable delay or force majeure provisions based on the guidelines proposed by OSHA. The OSHA rule was proposed to coincide with President Biden’s executive order combatting climate change, and the climate change and excessive heat debate will undoubtedly have an impact on the construction industry and contractual interpretation.

If owners and contractors fail to consider the requirements of the proposed rule when creating a construction schedule, they might expose themselves to a prolonged project and delays, along with various disputes related to these issues.  Construction sites, with their combination of physical labor and exposure to the elements, are very likely to face the risks the proposed rule aims to address. Though many contractors already have policies in place to assess and react to heat, many in the industry believe that more comprehensive heat safety measures may help to further protect employees. Whether the OSHA rule is implemented or not, the construction industry must be able to assess and react to heat in order to protect it employees and ensure that projects stay on track.

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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.

Mediation Success – Strategies for Avoiding Prolonged Litigation and Getting To “Settled”

Matt Argue (left) and Gene Witkin (right)

By this article, the authors, both full-time neutrals, share some success strategies to help civil litigation practitioners, particularly in construction law.  We address helpful tips to avoid common mediation pitfalls which can occur before mediation or during mediation. We will address break-out sessions, joint caucuses, and mediator’s proposals – so that you can make the most of the mediation process.

1. RESOLUTION STARTS PRE-MEDIATION

• Pre Mediation Preparation and Call

Good mediators frequently begin mediation many days if not months before the mediation event. The mediator will convene a pre-mediation planning call (often via Zoom) with all counsel to discuss a mediation plan for the case. The mediator explores with counsel the key issues that need to be addressed prior to mediation. Often the mediator will help the parties focus on key issues in dispute and avoid spending time on minor issues that can be resolved more easily during mediation. These key issues include insurance coverage and limits, making sure all decision makers attend mediation, exchange of documents and expert reports, as well as key documents that support or rebut the claims.

• Non-Confidential Mediation Briefs

Mediation briefs that provide a thoughtful, complete, and honest assessment of the case set the stage for success - especially if they are non-confidential and exchanged with the other side.The mediation brief is a persuasive argument that can help focus the mediators and other party on the key areas in dispute.  Ideally, mediation briefs are exchanged with sufficient time in advance of mediation so the mediator can react and if necessary, follow up with all parties regarding supplemental information to exchange prior to mediation. The goal is ensuring all parties are ready for mediation and any critical information is exchanged in advance of mediation.

• Separate, Confidential Mediation Brief

Sometimes there are concerns that counsel do not want to share with the opposing party. In that case, a second confidential brief can be submitted for the mediator’s eyes only; for example, a party may want a private discussion for procedural issues that are of concern, such as a pending motion for summary judgment or a due date to join third parties. There may be concerns about funding that counsel does not want to discuss in front of his or her client. Practitioners can increase the likelihood of a successful mediation outcome by addressing these and similar big picture issues pre-mediation. For example, is this one of five similar cases, and the client is deeply concerned about precedent? Or, is it the converse, the case is the last of its kind and the client just wants to get it closed and move on? Generally, the more the mediator knows about each party’s goals and objectives, the better the mediator is able to guide all parties to a successful resolution.

• Essential Mediation Participants

One source of frustration for practitioners experienced in the settlement process is where they have their client willing to compromise and there’s good back-and-forth negotiation, but then you get the 4 p.m. surprise: one of the other counsel announces they cannot do the settlement without a contribution from a third-party or fourth-party defendant who is not present. This frequently comes in the context of insurance where the claims representative asks why a potential indemnitor is not present. Most insurance companies are typically loathe to “fund and chase,” and at this point the settlement process may need to be put “on hold.” This is the perfect example of information that can be shared during an honest and thorough pre-mediation discussion regarding the status of essential players. Armed with this information, the mediator can plan the mediation session at a time when all parties are ready and prepared to fully participate in resolution.

• Insurance Ramifications

The resolution of many construction disputes rests on the contribution by one or more insurance carriers. Effective construction mediators thus should have a deep understanding of insurance coverage. Similarly, construction practitioners should not shy away from the insurance implications in a case. Often the authors have been told by counsel for one of the litigants words to the effect of: “I don’t deal with insurance issues.” While of course counsel should not put themselves in a conflict situation, the problem with avoiding insurance altogether is that many cases will not be resolved without addressing the insurer’s perspective. Without adequate information, insurance representatives cannot set reserves or otherwise get adequate authority for settlement. Pre-mediation is thus very helpful to ascertain the identity of each of the implicated insurers, their respective policy limits, and any material policy exclusions or other driving coverage concerns that could impact settlement. This way, the mediator has the information necessary to help the insurance representative(s) timely secure the authority needed to settle. Failure to obtain insurance information is one of the primary reasons cases do not settle at mediation.

2. DURING THE MEDIATION

The number one key for successful mediation is robust negotiations between the parties.  We have never seen a case settle in mediation when a party is missing critical information about the case, whether that is amount of damages, basis for damages, insurance coverage issue or key legal argument of defense that is not addressed to the satisfaction of all participants.  While a huge benefit of mediation is avoiding the high costs of civil litigation discovery, in general, cases settle only after all parties have a threshold understanding of the strengths and weaknesses of each side. A common strategy to help bring the parties closer together on their positions is joint expert meetings (usually via Zoom). In these joint expert meetings, which we recommend the mediator be a part of, the experts are asked to find common ground on as many issues are possible. This helps focus the parties on the few issues needed to negotiate to resolve the case at mediation.  

Also, it is important for the parties and mediator to test the waters on settlement range for the case; sometimes this is called the “zone of settlement.” If both parties are outside the “zone of settlement”, the mediator can step in with a technique called “bracketing” where both parties move down or up at the same time into what both parties and the mediator believe is the “zone of settlement” for the case. This can expedite resolution by signaling to both parties demands and offers that are outside the “zone of settlement” are unlikely to result in a successful resolution. If used properly, “bracketing” can be a helpful tool to reach resolution. A mediator will only use bracketing AFTER the parties have had significant negotiations and still not moved into the “zone of settlement.”

3.     BREAK-OUT SESSIONS

An important aspect of mediation is the break-out session (when the mediator talks privately with only one or two party representatives or counsel). This is a rare opportunity in the civil litigation world for appropriate and productive ex parte communications.

Sometimes the mediator will meet with opposing counsel only and gain insights that will help move the case towards settlement. Counsel may explain why one side or the other is entrenched in their position so the mediator can focus on what is keeping the party from progressing in mediation. For example, perhaps one of the parties has focused their arguments and mediation brief primarily on damages; it may be invaluable to hear from the other counsel (subject to mediation privilege) that damages is not materially contested by his/her client, so the parties can move their focus to the actual dispute, say for example, causation. Not every case can or should be settled, but we have found that practitioners with successful settlement track records generally welcome the opportunity to make the most of these private, candid communications.

Solo break-out sessions can also be extremely productive. Counsel may have an opinion on the settlement range of the case or settlement target. Some counsel may be reluctant to candidly share information with the mediator to keep the mediator in the dark as to their final settlement authority. From the mediator’s point of view, the more information the mediator has the more likely he or she will help both parties reach a satisfactory resolution. Since mediation is a voluntary process between parties with frequently more than one participating representative, a break-out session helps the mediator “take the temperature of the room” to see what is driving the motivation of certain participants to settle the case, or perhaps the motivation of others to resist settlement.

Mediators may also use the break-out session to meet separately with insurance carrier representatives. There may be information the insurance carrier wants the mediator to know that will assist in settling the case. As previously mentioned, having insurance carrier participation and dealing with insurance limits and coverage issues often is the key to resolving the case in mediation.

Personal counsel may likewise have a separate perspective – either on the insurance picture or on the settlement dynamics in general. We have found that meeting with personal counsel can often unlock a key to settlement, such as identifying third parties with which the principal wants to maintain a good business relationship. And personal counsel often have a role to play in identifying which insurance policy(s) will most likely be at issue, or even on occasion conversely identifying a policy the insured does not want to tap due to other exposures. Overall, break-out sessions can be a short cut and help the parties reach final resolution more quickly.

4.     JOINT SESSIONS

We do not espouse use of a joint session at the beginning of the case so that counsel can essentially give an opening statement. This is generally not helpful. But a joint session during the mediation can be productive once the mediator has assessed each party’s position and identified the participants—who could be counsel, the parties, an expert witness or even coverage counsel—whom the mediator believes can be effective in speaking directly to the other party.  We have found that allowing the parties to speak directly to each other can provide powerful motivation towards achieving resolution. 

Joint sessions can be used to confirm areas of agreement, focus the parties on actual disputes, allow the parties to hear unfiltered strengths and weaknesses of the claim, result in a final risk analysis to gauge party’s willingness to continue litigation, and provide opportunity to leverage relationships and take control of negotiations.

In many construction cases, the parties have worked with each other successfully on many projects, but litigation can strain business and personal relationships. Mediation is the one place it is appropriate and generally productive during litigation to leverage relationships to settle cases and potentially restore future business opportunities. Obviously, counsel must be mindful of ethical obligations when addressing interests beyond the litigation at hand. But that said, the joint session can be the place where relationships can trump legal positions saving all parties tremendous time and resources.

In one case, where the parties were many millions of dollars apart, a joint session allowed counsel for the general contractor to acknowledge significant covered damages to a homeowner’s residence that caused the homeowner to make a more reasonable settlement demand knowing that the contractor’s attorney would make a reasonable settlement offer after the joint session. In this case, the joint session helped the parties get on the same page as to the overall value of the case and caused both parties to move several million dollars closer into the “zone of settlement”.

The success of a joint session depends on the personalities of the parties and the mediator setting proper objectives going into the joint session. But, we have found the joint session can often break an impasse and shorten the time for achieving final resolution.

5.     END OF MEDIATION

At the end of productive mediation sessions, typically one of three things happen: 

• First, and perhaps most often, with robust negotiation, and effective use of pre-mediation talks and break-out sessions, an agreement is reached. To avoid any ambiguity, the authors strongly recommend at this point that one of the parties or the mediator put all the material settlement points in writing to be affirmed by all sides. 
• Second, somewhat rarely, despite best efforts, one or more of the parties recognizes they do not have enough information and need further exchanges, at which point the mediator will work with the parties to streamline what is needed and reconvene at a more opportune date.
• Or third, an increasing common endpoint is the parties move closer to resolution, but need the mediator’s help to bridge the final gap. At this point, a mediator may employ a strategy known as “Mediator’s Proposal,” which we address below.  

6.     MEDIATORS’ PROPOSALS

A Mediator’s Proposal, as used by the authors, is an end-game proposal by the neutral to bridge the final gap and offer a compromise settlement solution that has not been articulated by the parties. It is NOT a judicial determination of the likely outcome of the case, but the mediator’s “educated guess,” informed by all the confidential discussions with the mediator, as to the settlement amount and terms that both parties will likely accept. A Mediator’s Proposal is not employed if one party is being recalcitrant and not fully participating in the mediation process; for example, one party using the mediation to gain “free discovery” but not earnestly trying to settle the case.  Similarly, a Mediator’s Proposal is not employed if there are roadblocks to settlement that require further research and/or exchange of key information between the parties.

An important question is why should the parties trust the mediator and the Mediator’s Proposal? This goes back to all the work and effort of the mediator to fully understand the case both factually and legally and convincingly convey to the parties the mediator’s evaluation. Also, the mediator has hopefully been selected based on his or her knowledge, training and experience in resolving many hundreds of similar cases and similar pending trials, so that the parties have a high degree of confidence in the mediator’s settlement recommendation.

A Mediator’s Proposal should only be used if both parties request one. The reason is that Mediator’s Proposals are extremely effective if both parties recognize the Mediator’s Proposal is the very last step in the mediation. Importantly, this only occurs AFTER the parties have employed ALL avenues for resolution discussed above in this article.  Practitioners should avoid the temptation to jump to a Mediator’s Proposal before working diligently to resolve the case using traditional mediation techniques. The primary reason is that a Mediator’s Proposal is the last move for the mediator and the parties to reach final resolution.  

Typically, the Mediator’s Proposal is “double blind”, which means the mediator tells both parties a settlement amount for the case and each party must either accept or reject the Mediator’s Proposal. A party who rejects a Mediator’s Proposal will never know if the other party accepted the Mediator’s Proposal or not. Only if both parties accept the Mediator’s Proposal will both parties be told the case is settled for the settlement amount in the Mediator’s Proposal. As part of explaining the Mediator’s Proposal, we always recommend telling the parties the Mediator’s Proposal is not a “split-the-baby” number. It is always a number the mediator arrives at independently and not a number either party has offered or rejected during mediation. With few exceptions, such as cases involving repeat litigants, a Mediator's Proposal will be conveyed in writing after the mediation ends when the parties have a thorough understanding of the strengths and weaknesses of the case. 

7.     CONCLUSION

Following these tips will greatly enhance your chances for reaching a successful resolution at mediation. This includes working closely with the mediator before the mediation begins and continuing through the break-out sessions, joint caucuses, and, if necessary, the Mediator’s Proposal. We look forward to hearing from you about how these mediation strategies work to help you avoid prolonged litigation and get your case settled.

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Co-Author Gene M. Witkin, Esq. has a career devoted to helping businesses, insurance companies and individuals resolve their disputes efficiently and out of court through mediation and ADR. Prior to becoming a full time neutral, for more than 30 years Mr. Witkin maintained an active practice in complex litigation, insurance disputes, and conflict resolution in numerous different states and venues across the country.  He is licensed in multiple states, and his practice gave him the opportunity to work on every side of civil lawsuits, including representation of building owners and HOA’s, developers and GC’s, subcontractors and design professionals, as well as insurers. As mediator and discovery referee in the area of construction, Mr. Witkin handles all aspect of resolution for both commercial and residential claims, with availability in multiple states. 

Co-Author Matthew W. Argue, Esq. has over 35 years of experience in complex construction litigation and for the past 19 years has served as a full-time Construction Mediator, Arbitrator, Special Master and Discovery Referee. He has successfully resolved over 1000 construction cases as a mediator. He focuses exclusively on construction and insurance mediation and arbitration throughout California and nationally via Zoom video conference. Mr. Argue mediates a wide variety of construction claims, public and private works, mixed use, high-rise commercial and residential developments, and high-end luxury single-family homes. He is licensed in California, Nevada, Washington, Texas and Colorado.