San Antonio Construction News • SEP 2020
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Saving Money in a Construction Dispute R. Carson Fisk Shareholder Andrews Myers P.C. Austin, TX
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onstruction is an industry that is prone to disputes. The process inherently involves multiple parties, with many of them relying on contractually downstream specialists or trades to perform components of a larger scope of work (e.g., contractors and subcontractors, architects and sub-consultants, etc.). And, as the saying goes, you are only as strong as your weakest link. In many instances, conditions arise that were not foreseen or are different than expected, whether those are physical (e.g., abnormal adverse weather, differing site conditions, etc.), financial (e.g., bankruptcy, lending challenges, etc.), or something else (e.g., pandemics, labor market changes, supply chain disruptions, etc.). This combination of factors can lead to delays and increased costs, which are often the subject of a disputes. Disputes, if not addressed, can escalate and potentially lead to even more expensive and time-consuming litigation or arbitration. Thus, most anyone engaged in the construction process—whether a project owner, architect, engineer, contractor, subcontractor, supplier, or otherwise—should understand how to mitigate the financial impact of such matters. Following a few simple tips with help in this effort. Stay (or Get) Organized When a dispute arises, or even looms, access to information that is available in an easily understandable format can help lead to an early resolution. Such information will almost certainly assist in developing important claims or defenses. Internal personnel changes and schedules can make organizing information well after an issue has arisen a difficult task. Rummaging aimlessly through poorly organized computer files or hard-copy project folders searching for relevant information will certainly take an inordinate amount of time. While someone outside the company, such as an attorney or outside document processing vendor, may be willing to take the lead in organizing information, it will come at a significant cost. The best practice is to ensure that project documents are organized in a way that others can easily locate important information, even if the project team is no longer available to assist. Set a Goal While circumstances may dictate a different approach, consider seeking an amicable resolution. While there may be a desire to maximize recovery—using aggressive means if necessary—that may not be the most cost-effective approach in the near-term. Early negotiation or mediation are two available means to seek a resolution on friendly, or less adversarial, terms. Even if a lawsuit or arbitration has been filed, that does not necessarily mean the party pursuing the claim intends to do so hyper-aggressively. But if settlement is simply not an option there may be no need to spend the time, energy, and money to go through the motions with the blind hope that something simply works out. Be strategic about the steps taken, bearing in mind the goal being sought. Participate Lack of involvement is one of the surest ways for a dispute to cost more. If a dispute is not of a nature that it can simply be ignored, ignoring it will merely allow the future challenges to compound. This may also require that someone with less knowledge serve as a point person, interfacing with others in an effort to either stave off the development of the dispute or to press it forward. This person must be educated on the matters he or she is discussing, which often comes at a cost. Particularly once litigation or arbitration is involved, there is a significant time commitment no matter whether a party is pursuing a claim or defending against one. Any attorney will need guidance and input on often detailed factual matters, including understanding the
underlying facts and verifying whether positions are accurate. In the event of litigation or arbitration, take the time to understand the nature of the claims and/or defenses being alleged and the positions of the parties by reviewing court filings, discovery responses, correspondence, and other materials provided to you by your attorney. Understand the Financial Risks Disputes, particularly those that end up in litigation or arbitration, are unpredictable. There is no guarantee that the party with the most favorable facts, or the “better” lawyer, will win. Frustratingly, there is no guarantee of actual recovery even if one wins by obtaining a judgment. Judgment debtors can and often do go bankrupt. Similarly, there is no guarantee of recovery even if one wins by defending against a claim. And courts or arbitrators may refuse to fully reimburse attorneys’ fees or recovered damages may be a fraction of what was sought. On the direct expense side, given the number of different, often changing factors in a lawsuit (e.g., the number and nature of the claims, reasonableness and strategies of the parties and counsel, judicial and arbitral temperament, legal developments, court rulings, etc.), developing a litigation/arbitration estimate can be challenging. But such information can give one a general sense of what to expect related to cost of pursuing or defending against a claim. Be Reasonable Thoughtful reflection and consideration should be the guide, not emotion or knee-jerk reaction. A broader view than a single incident may be warranted. One need not destroy an otherwise valuable business relationship due to a business dispute. Being open to amicable resolution is possibly the greatest path to saving money when faced with a construction dispute. While a good compromise may leave both sides unhappy in the short-term, relationships may be preserved and the likelihood that all parties to the dispute will save a substantial amount of money is a very real possibility. Even despite one’s best efforts, it may not be able to avoid the escalation of a dispute, including the prospect of litigation or arbitration. These suggestions, however, will help save on costs when faced with such a scenario. R. Carson Fisk is board certified in Construction Law by the Texas Board of Legal Specialization and may be reached at cfisk@ andrewsmyers.com.
National Safety Stand-Down to Prevent Falls in Construction Joann Natarajan Compliance Assistance Specialist OSHA Austin, TX
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ach year, OSHA promotes a national stand down to prevent falls in construction. This year’s stand down week is September 14 – 18, 2020. Safety Stand-Down is a voluntary www.osha.gov/StopFallsStandDown/ event for employers to talk directly to suggestions.html. OSHA also has a trainemployees about safety. Any workplace ing guide in English and Spanish on how can hold a stand-down by taking a break to conduct a tool box talk for fall prevento focus on “Fall Hazards” and reinforcing tion. These resources are located here the importance of “Fall Prevention”. Emhttps://www.osha.gov/Publications/ ployers of companies not exposed to fall OSHA3666.pdf and here: https://www. hazards, can also use this opportunity to osha.gov/Publications/OSHA3727.pdf. have a conversation with employees OSHA also has eight free videos on about the other job hazards they face, fall protection located at https://www. protective methods, and the company’s osha.gov/video/index.html. safety policies and goals. It can also be an OSHA hosts an Events page with opportunity for employees to talk to events that are free and open to the pubmanagement about fall and other job lic to help employers and employees find hazards they see. events in your area. If you plan to host a Anyone who wants to prevent haz- free event that is open to the public, see ards in the workplace can participate in the OSHA’s Events page at https://www. the Stand-Down. In past years, partici- osha.gov/StopFallsStandDown/calendar. pants included commercial construction html to submit the event details. companies of all sizes, residential con- Employers will be able to provide struction contractors, sub- and indepen- feedback about their Stand-Down and dent contractors, highway construction download a Certificate of Participation companies, general industry employers, following the Stand-Down. The certifithe U.S. Military, other government par- cate pages will be active on September ticipants, unions, employer’s trade asso- 14, 2020, for employers to enter their inciations, institutes, employee interest or- formation and print their certificate. To ganizations, and safety equipment man- download a participation certificate, visit ufacturers. https://www.osha.gov/StopFallsStand Companies can conduct a Safety Down/index.html#cert. Stand-Down by taking a break to have a If you want to share information with toolbox talk or another safety activity OSHA on your Safety Stand-Down, Fall such as conducting safety equipment in- Prevention Programs or suggestions on spections, developing rescue plans, or how we can improve future initiatives like discussing job specific hazards. Manag- this, please send your email to oshasers are encouraged to plan a stand-down tanddown@dol.gov. Also share your that works best for their workplace any- Stand-Down story on social media, with time. OSHA has a number of free ideas to the hashtag: #StandDown4Safety. natarajan.joann@dol.gov use for a stand down event at https:// 512-374-0271 x232
