Building Chicago -Fall/Winter 2012 - (Page 13)
The Challenges Posed by Electronic Information in Construction Disputes
By Gregory R. Meeder and Livya Heithaus Holland & Knight LLP
rbitration and mediation, two forms of alternative dispute resolution (ADR), are popular forums in which to resolve commercial and construction disputes because ADR is considered less expensive, faster and more efficient than court litigation. In recent years, however, ADR – speciﬁcally arbitration – has been criticized as becoming no different than court litigation due greatly in part to extensive and costly discovery. Much of the escalated expense associated with discovery is attributable to the growing use, management and discoverability of electronically stored information (ESI). ESI is generally considered e-mail, Web pages, word processing ﬁles, databases, codes and algorithms, metadata, computer programs or any other kind of data that can be stored on a computer, BlackBerry, or other personal digital assistant. This article discusses the impending ESI crisis in arbitration and how ADR can help contain ESI discovery in arbitration by managing ESI with speciﬁc guidelines and rules.
The use of computer-driven technology and tools recently exploded in the construction industry and commercial arena. Construction disputes, for example, have historically been document intensive because they involve multiple parties, facts developing over one or more construction seasons and thousands of documents spread among developers, architects, engineers, general contractors, subcontractors and suppliers. Construction ﬁrms are now turning to tablet devices and related applications to develop and manage construction projects. Rapid communication among remote industry segments now takes place over personal digital devices and Web conferences rather than in person. Advanced design modeling systems, such as building information
modeling, is now widely used to identify construction challenges before the project hits the ground. All of these technological advances, which lead to stored electronic media, create a vast amount of ESI that may be discoverable during dispute resolution. Most parties about to embark on litigation are not ready to manage the expanse of ESI that may be related to the underlying dispute. It may be necessary to hire an outside consultant to locate, gather, store and produce the ESI in order to comply with the Federal Rules of Civil Procedure or, alternately, state rules of civil procedure. The parties must also engage attorneys to conduct a lengthy and costly privilege review of all ESI to ensure that attorney-client privilege and work product protections are not waived during production. Although “claw back” agreements, which require parties to return privileged information produced through inadvertent disclosure may alleviate the fear of waiver, it is imperative, nonetheless, that all material be reviewed to avoid providing an opposing party with even a glimpse of protected information. Furthermore, depending on the format of the ESI produced by the opposing party, a party may incur further expenses to convert the ESI into a usable format so that it can be reviewed by attorneys and parties. If left unmanaged, electronic discovery issues will likely have unintended and a potentially disastrous impact on the cost of arbitration or litigation. Notably, failure to produce all discoverable ESI could result in sanctions ranging from attorney fees and costs to adverse inference jury instructions or a default judgment. See FRCP 37; U.S. v. Philip Morris USA, Inc. 327 F.Supp.2d 21 (D.D.C. 2004) (ﬁning the defendant $2.5 million for destroying potentially discoverable e-mails two years after the entry of a preservation order and barred from presenting witnesses at trial who had failed to retain and preserve relevant records).
Flexibility to Reduce Burdens
Most ADR forums have developed electronic discovery guidelines and rules to assist parties, attorneys and neutrals in dealing with requests for ESI, while also maintaining the goals associated with arbitration. Unless otherwise speciﬁed in an agreement to arbitrate, judicial rules of procedure do Building Chicago Fall/Winter 2012 • 13
Table of Contents for the Digital Edition of Building Chicago -Fall/Winter 2012
A Message from the Builders Association President
A Bag of Mixed Greens
I’m Covered by Insurance when the Roof Leaks, Right?
A Method to No Madness
Index of Advertisers
Building Chicago -Fall/Winter 2012