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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES SUMMER 2023 ISSUE 2 • VOLUME 8 THE BUSINESS CASE FOR DEI RISE OF THE MACHINES EXAMINING THE PROS AND CONS IN PROPERTY DAMAGE AND CONSTRUCTION-DEFECT CLAIMS FORENSIC INVESTIGATION Is Your Worth It?800.729.0355mcconsultants.com One Company For All Your Consulting Needs GENERAL LIABILITY & CONSTRUCTION FORENSICS ONE FOR ALL Construction Defect Forensics Construction Related Forensic Expert Consulting Services Pre-Suit Claims Engineering Analysis, Construction Claims, General Liability Claims Accident Reconstruction Commercial Vehicles, Bicycle / Motorcycles Multi-Vehicle Collisions, Driver Factors Cause & Origin Investigations Investigate Claims, Evaluate Damages, Repair Specifications, Reconstruction Oversight Premises Liability Trip / Slip / Fall Coefficient of Friction Analysis Aerial Drone Investigations High Resolution Aerial Photography and Videography MC Virtual-360 ™ 3D Photography 360 Camera / 3D Scanning, Deviation Analysis of Losses, Room or Entire Structure Animation Services Animation Trial Exhibits and Litigation Support VideosSUMMER 2023 | 3 THE BONES SUMMER 2023 10 ON THE COVER IS YOUR FORENSIC INVESTIGATION WORTH IT? Examining the Pros and Cons in Property Damage and Construction-Defect Claims 20 MAKING THE CALL Four Factors To Consider When Deciding To Take a Case to Trial 24 THE BUSINESS CASE FOR DEI As Construction Lags Behind in Diversity, the Conversation Must Shift 28 CHARTING A COURSE After the Pandemic, Supply Chain Issues and Delays Persist 32 BEWARE OF WHAT LIES UNDERGROUND Infrastructure Upgrades After the Big Bill and the Resulting Utility Claims 14 New York A Path Forward 16 South Carolina Narrowing the Playing Field 4 Inside Counsel Survey Says: Caution Needed on Generative AI Tools (Take Two) 6 Ask the Expert Manufacturers Beware 8 Survey This Tops in Q1 18 CLM Says Rise of the Machines FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL SURVEY SAYS: CAUTION NEEDED ON GENERATIVE AI TOOLS (TAKE TWO) Shortly after completing this column for the first time, I decided to go back and rewrite it based on a story that broke that fits almost too perfectly with the topic at hand. I had written about our “CLM Says” section for this issue, where we surveyed CLM’s construction professionals and asked for their views on generative AI tools such as ChatGPT: Will the industry jump on board? When, and how? What are the benefits and what are the concerns? We received a range of interesting responses that you can check out on page 18, but I had written this column about a particular reply from Patrick Kenny, partner at Armstrong Teasdale LLP. He related his personal experiences when trying out ChatGPT. He said that, while ChatGPT is a good “pretender” at generating analyses and arguments, a deeper dive into its sum- maries showed many flaws in the data it cited, even to the point of seemingly making things up. I shared that reply with CLM’s VP of Content Eric Gilkey, and he indicated he had a similar experience when using ChatGPT to assist with a research paper he was writing: It fetched a variety of statistics and figures for him, but when double-checked, those fig- ures were incorrect. And when challenged, ChatGPT essentially “admitted” it was mistaken and then kept humming along. In this column, I used those two experiences to warn that, while generative AI tools hold great promise, the industry must be mindful of their current shortcomings, and that professionals should be careful before drawing any conclusions about trends these tools identify. But the real kicker emerged after the column had been writ- ten: A story began appearing on Twitter, and later in articles, the weekend of May 27 revealing that, as reported by the BBC, a New York plaintiff’s attorney used ChatGPT for legal research and ended up referencing cases that do not exist. “Six of the submitted cases appear to be bogus judicial decisions with bogus quotes and bogus internal citations,” the judge in the case wrote in an order. The attorney said he “greatly regrets” relying on the tool, added he wasn’t aware its content could be false, and accepted responsibil- ity for not confirming the sources. He has now been ordered to explain why he should not be disciplined. The point of proceeding with caution when it comes to genera- tive AI tools perhaps could not have been made any clearer than this emerging story. In addition, cheers to CLM member Patrick Kenny, who had the good sense to experiment with, and thorough- ly test, ChatGPT before relying on it in a setting that could have landed him in trouble and damaged his firm’s reputation. K PHIL GUSMAN Editor Phil.Gusman@theCLM.org SUMMER 2023 ISSUE 2 • VOLUME 8 Construction Claims is published four times a year and covers all aspects of construction-related claims, including construction defect, site accidents/injuries, insurance coverage, subcontractor issues, and new technologies that address both national and regional/ statewide audiences. Copyright© 2023 by the Claims and Litigation Management (CLM) Alliance. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the Claims and Litigation Management (CLM) Alliance. The views expressed in the articles are solely those of the authors and do not necessarily reflect the views or opinions of the Claims and Litigation Management (CLM) Alliance or the companies in which the authors are employed. ADVERTISING Jeremy Campbell jeremy.campbell@TheCLM.org 513-377-7228 EDITORIAL SUBMISSIONS & QUESTIONS Phil Gusman at phil.gusman@TheCLM.org REPRINTS For reprints and licensing please contact Jeremy Campbell at jeremy.campbell@TheCLM.org or 513-377-7228. CHIEF EXECUTIVE OFFICER Ronna Ruppelt VP PARTNERSHIPS Jeremy Campbell SENIOR ACCOUNT EXECUTIVE Laurel Metz ACCOUNT EXECUTIVE Megan Josd SENIOR MANAGING EDITOR Phil Gusman VP OF CONTENT Eric Gilkey ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. WilliamsWorld-class.Globalreach. 800.580.3228 rimkus.com YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. WHAT HAPPENED? WITHSOMUCHAT STAKE, YOU NEED TO KNOW Numerous factors can lead to serious construction-site accidents, from inadequate worker training and safety procedures to faulty products and heavy equipment. Rimkus has decades of forensic experience investigating and evaluating injury accidents across the U.S. and in many foreign countries. Our construction experts and engineers conduct in-depth investigations to determine what happened and can help provide solutions for recovery. If you’re facing a complex forensic challenge of any kind, count on us to uncover the facts.6 | CONSTRUCTION CLAIMS TheCLM.org/Magazine ASK THE EXPERT QUESTION: What are some emerging construction-defect and product liability trends you are seeing when it comes to manufacturers? A: There are several emerging trends in 2023 con- cerning construction component manufacturers. The most notable trend specific to manu- facturers is that their largest customers have now largely decided upon a defense strategy of tendering to and/or adding their subs and suppli- ers, including the manufacturers, to any and all claims, cases, and matters. For instance, some manufacturers never used to add or otherwise join their subs and suppliers to their claims, cases, or matters. However, company strategies have changed over the years. They now tender and/or make demand upon manufactur- ers for almost any claim, case, or matter they receive involving the manufacturer’s products. A second observation is that, for the routine construction-defect claims, we have discovered that oftentimes the addendum (which includes limitations on recovery or modifications to indemnity provisions) is either not attached to the general contractor’s or distributor’s contract docu- ments, or, if it is attached, it is not executed by the general contractor or distributor. This has allowed contractors and distribu- tors to rely on language in their contracts or agreements that is favorable to them and not to manufacturers. This has certainly put manufacturers in unfavorable positions—ar- guably owing defense, indemnity, and/or ad- ditional insured status in many instances—and weakened defenses in some cases. Third, we have seen an uptick in delay claims since the COVID-19 pandemic began in 2020. As for a general marketplace trend, we have seen both an uptick in delay claims (including liquidated damages claims) due to scarcity and/ or sheer inability to supply product or meet prior agreed upon schedules, as well as defect claims related to material substitutions due to material unavailability. Specific to manufacturers, while many of the delay claims received near the start of the pandemic were no doubt caused by the pandemic, we have seen some recent claims that do not appear caused by it, and are actually caused by other emerging factors. For instance, manufacturers may take on more orders than they can handle. Secondly, scheduling departments are com- municating changes in the schedule directly to the contractor or distributor. In these circum- stances it appears the contractor or distributor is learning of the delay at the same time as manu- facturer sales personnel assigned to the account. This, unfortunately, prevents the manufacturer sales personnel, who have the relationship with the customer, from preemptively reaching out to let them know there may be scheduling issues. Managing customer expectations is obviously key to overall business success, but also key in de- fense strategies throughout the claim, litigation, and arbitration phases. In addition, the likelihood of claims and disputes over cyber attacks is becoming more common. As a result, cyber insurance is now more commonplace, and certainly advisable as part of a company’s risk management arsenal. But in addition to cyber attacks causing supply chain issues that result in delay and other claims from customers, we are seeing increased disputes arise when payments are intercepted and other- wise go to bad actors on construction projects. K MANUFACTURERS BEWARE David Toney Partner and Member, Executive Committee, Construction Team Co-Leader Adams & Reese LLP2023 CONFERENCES & EVENTS Networking and Education In-Person theclm.org/events DATES, LOCATIONS, TOPICS, AND EVENT NAMES SUBJECT TO CHANGE. Sponsorship: sponsorship@theclm.org Speaking: help@theclm.org DATE CONFERENCE/EVENT LOCATION JUNE 22 Spotlight: Transportation NEW ATLANTA JULY 19 Spotlight: Transportation NEW PHILADELPHIA AUGUST 15-16 Chief Claims Officer Summit BALTIMORE AUGUST 16-19 Claims College BALTIMORE SEPTEMBER 27-29 Construction Conference AUSTIN OCTOBER 19 Litigation Management Symposium CHICAGO OCTOBER 19-22 Litigation Management Institute CHICAGO NOVEMBER 8 Professional Development Day HARTFORD NOVEMBER 29 Focus Conference & Holiday Party NYC8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS INFRASTRUCTURE UPGRADES UNDERWAY A rendering of the future Walk Bridge in Norwalk, Connecticut. Construction on the $925 million project began in May to replace the original Walk Bridge—a four-track steel swing railroad bridge built in 1896 that spans the Norwalk River. The replacement bridge, which is approximately 80% federally funded and 20% state funded, is expected to be completed in 2029. The White House recently highlighted the Walk Bridge project as benefitting from the over $220 billion in funding from the Infrastructure Investment and Jobs Act (IIJA). On page 32, we examine the potential for utility claims resulting from the many upgrades to aging infrastructure that will take place across the nation in the wake of the IIJA. PHOTO CREDIT: CT DOTNext >