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Leading Out Loud: Construction

Construction experts weigh in on the status of the industry

September 28, 2020 Photo

How are new “green” construction techniques influencing claims and litigation? Has COVID-19 had any impacts on the industry? And what litigation trends are coming into focus when it comes to construction-related disputes?

Green building and other techniques, such as building taller with wood construction instead of steel, are starting to become more popular. Have you seen any claims or litigation trends emerging in this area?

Dan Ducommun, MC Consultants Inc.: Yes, multiple green roof litigation failure claims have become forensic consulting assignments for our experts. In recent years, our national consulting team has also been involved in providing forensic expertise related to product failures specific to green building products and applications. Building codes have been evolving with respect to the use of wood in mid-rise projects as well as the green movement. Excessive shrinkage (differential movement) can have an adverse effect on the structure, MEP systems, and other building components, so consideration should be given to incorporate flexible joints, minimum gaps, and expansion/slip joints into the design. More than ever, proper design by the design team, quality assurance/control, as well as strict construction conformance is essential. Builders need to work directly with the manufacturers’ representatives and technical staff to ensure that they are properly designing and installing the wide variety of green products flooding the market.

John McClurkin, Vernis & Bowling: The primary challenge we have faced in Alabama with regards to the few green building-related claims and investigation thereof is the lack of qualified and knowledgeable professionals to assess causation and fault. This makes investigating and resolving green building claims difficult. As green building becomes more commonplace over the next few years due to expected increased demand for green building by consumers, the legal trends and related risk management protocols will follow suit, along with the increase in qualified experts.

When COVID-19 began causing shutdowns, there was speculation about how stalled/delayed projects might impact the claims landscape, particularly with respect to contracts that may not be able to be fulfilled. Have you seen any developments on that front?

John McClurkin, Vernis & Bowling: Alabama’s COVID-19 shut-down period was relatively short compared to other states, and a lot of construction projects here were deemed “essential” and permitted to continue during lockdown. However, I anticipate that there will be some litigation down the road primarily relating to contractual issues as a result of COVID-19 delays. I anticipate the primary contractual disputes will focus on standard force majeure and liquidated damages provisions of contracts involving projects that did get delayed. It will be interesting to see how the courts in Alabama interpret these clauses in relation to the pandemic and whether the courts qualify the COVID-19 shutdown as an “act of God.”

Dan Ducommun, MC Consultants Inc.: There have been delays in supply chain and staffing. However, construction projects appear to be moving forward as usual with added safety and social distancing protocols in place. As mentioned, construction companies are considered an “essential” business. From what our national consulting teammates have seen and heard, construction has not been significantly affected by COVID-19. In fact, many home improvement construction companies are having a record-setting year.

What are you seeing as far as mediation versus litigation trends when it comes to resolving construction-related disputes? Has there been any shift in these trends over the past year? 

John McClurkin, Vernis & Bowling: In almost all lawsuits involving large commercial projects and many parties, the attorneys and carriers work towards a mutual end goal of resolving the underlying claims, downstream indemnity claims, and coverage matters within the mediation process rather than undergo the expense and uncertainty of a long, complex trial. This trend has continued in 2020. As for smaller commercial and residential projects, we are finding that the parties, attorneys, and carriers are more apt to attempt early negotiations informally on the front end, knowing that the timeline for a trial will be many months—if not years—away due to the COVID-19 shutdown and resulting backlog of trial dockets throughout the state of Alabama. I expect these trends to continue in the foreseeable future, until the courthouses can function fully and conduct jury trials again efficiently—assuming that day ever comes.

Dan Ducommun, MC Consultants Inc.: Most claims appear to be moving forward despite courthouse closures. From what MC experts and consultants have witnessed, typical mediation strategies have not significantly changed. There are still “rooms” set up so the mediator can get to the facts without having to compromise any animosity between the experts. Expert meetings and depositions are all moving forward via teleconference, Zoom, or similar virtual applications. The use of Zoom to present and communicate precise details of a construction-defect case is a considerable improvement over the previous method to present via multi-slide PowerPoints. Small exposure claims are still arbitrated in person with social distancing and personal protection equipment requirements in place. The “Zoom Boom” is changing the litigation landscape; many find this process to be very convenient, too, which leads to the possibility of it becoming the new norm. We embrace the evolution of technology and how it can best support the forensic expert’s litigation delivery process.

Dan Ducommun is president and CEO of MC Consultants Inc. dan.ducommun@mcconsultants.com 

John McClurkin, Esq., is managing attorney at Vernis & Bowling (Mobile, Ala.). jmcclurkin@alabama-law.com 

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