SPRAYFOAM Professional - Spring 2015 - (Page 45)
CHOOSING THE RIGHT
STRATEGY FOR COMPLEX
BY GARY A. WILSON
omplex construction claims and disputes bring with
them a variety of factors from a legal standpoint: multiple
parties, a web of legal and technical facts and information,
related insurance issues, and millions of dollars for the parties involved, particularly general contractors.
These same factors make it a pivotal strategic decision
whether to arbitrate or litigate, and in some cases mediate,
complex construction claims. Importantly, the direction
one chooses in these matters must be considered throughout
the contract life cycle. Doing so ensures that the cost impact
can be minimized through careful management of the process,
from contract formation through project completion.
For parties in complex construction claims looking to
make a decision in terms of choosing arbitration, litigation
or mediation, here are some key factors to consider from the
Contract formation: During contract negotiations, it
should be decided if arbitration will be mandatory. Hybrid
approaches can include whether the general contractor will
have the right to select arbitration or litigation after the dispute arises. It should be considered whether or not to require
mediation prior to arbitration or litigation.
Time for a determination: If arbitration is mandatory, the
contract should address whether the arbitration be completed
within a set period of time. Acceleration of the process can be
both cost effective and can provide a definitive determination
of the dispute. Arbitration tends to be less time consuming.
Complexity of project and required discovery:
Arbitration normally results in limited discovery. Depending
upon the complexity of the construction project, there may
be advantages to litigation where more extensive discovery
is usually undertaken. The trade-off is there cost and what
is reasonable for the project.
Cost savings: Arbitration tends to be less costly due to
limited discovery. If arbitration can adequately address the
issues in the dispute with limited discovery, that may be the
preferred option. However, if it is assumed that substantial
discovery will be necessary to develop the facts then, consider litigation.
Expertise of decision maker: Arbitration can allow
for selection of arbitrators with a high level of expertise to
address a construction dispute. Panels
can be composed of lawyers and engineers/
consultants. This specialized expertise can be
very beneficial in a construction case. On the other
hand, a specialized court may also be very beneficial.
If litigation is preferred, a decision should be made at the
contract formation stage to require a jury or a bench trial.
Appeal: Arbitration is normally binding with limited right
to appeal. Litigation allows for an appeal, but the process can
be very expensive and time consuming.
Choice of law and venue: These selections are extremely
important and should be carefully considered at the time of
Rules of evidence: Litigation will require that the rules
of evidence apply. In contrast, arbitration is less formal and
the arbitrators can consider whatever evidence they require,
and will generally allow evidence to be introduced without
the restraints followed by the courts.
To be sure, the inherent complexity of construction claims
requires a thoughtful and strategic approach to construction
contracts. General contractors should consider all of the factors
listed above when choosing their preferred approach; however,
they should also not reach any legal conclusions based on the
information contained above without first seeking the advice
of qualified counsel. o
Gary A. Wilson is a senior principal and co-chair of Post & Schell,
P.C.'s Construction, Government Contracts & Surety Law Practice
Group resident in Washington, D.C. He has over 30 years of
experience in construction litigation, energy/utilities, class action
defense, commercial litigation, arbitration and mediation, reinsurance, contract formation, surety, and dispute resolution. He can
be reached at (202) 661-6956 or GWilson@postschell.com. This
article was originally published at www.constructormagazine.
com. Reprinted with permission from Constructor, a publication
of the Associated General Contractors of America.
| SPRAYFOAM PROFESSIONAL 45
Table of Contents for the Digital Edition of SPRAYFOAM Professional - Spring 2015
Executive Director’s Corner
Foam Business News
Industry by Design
Why I Support SPF
Energy Codes and the Benefits of SPF
Behind the Foam
SPF Industry Prepping for Code Changes in Sweden
How to Make Money and Have Fun Doing It
What You Need to Know Before You File in 2015
Tips on Spraying Foam – Are You Doing It Right?
Choosing the Right Strategy for Complex Construction Claims
10 Ways Your Company Can Use Instagram
Ask the Expert
Calendar of Events
Index of Advertisers/ Advertisers.com
SPRAYFOAM Professional - Spring 2015