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CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES SUMMER 2024 ISSUE 2• VOLUME 9 RISK TRANSFER: THE SOUFFLE OF CONSTRUCTION LITIGATION AI: GET ON BOARD OR MISS OUT Key Provisions in the Battle Between Subcontractors and General Contractors Good Work Over Bad One Company For All Your Consulting Needs EXPANDED SERVICES Expert Disciplines A-W Architects Biomechanical Engineers Building Envelope Certified Industrial Hygienists (CIH) Civil Engineers Delay Claims Consultants NEW Dram Shop & Public Safety NEW Electrical Engineers Environmental Consultants Fire and Explosion Investigators General Contractors Geotechnical Engineers Labor Law NEW Materials Science Engineers Mechanical Engineers Metallurgists OSHA Experts Premises Liability Consultants Premises Security – Police Practices NEW Property Loss Consultants Safety Consultants NEW Structural Engineers Transportation/Traffic Engineers Trial Exhibit Animators UAV (Drone) Pilots Waterproofing Consultants CD & GL Forensic Consulting Property Loss Consulting Construction Consulting mcconsultants.com 800.729.0355 35SUMMER 2024 | 3 THE BONES SUMMER 2024 10 ON THE COVER GOOD WORK OVER BAD WORK Key Provisions in the Battle Between Subcontractors and General Contractors 22 THE IDEAL INVESTIGATION Proper Claims and Litigation Management After a Construction Site Accident 26 RISK TRANSFER: THE SOUFFLE OF CONSTRUCTION LITIGATION Finding Success Through Planning, Preparation, and the Right Ingredients 30 GET ON BOARD OR MISS OUT The Benefits and Risks of AI in Construction and Design 14 California Disruption to Discovery 16 Colorado Housing Affordability vs. Construction Industry Concerns 18 Maryland Phishing Scheme Leaves GC on the Hook 20 Florida Is It Excluded? 4 Inside Counsel Going West 6 Ask the Expert New Rules 8 Survey This Animal Crossing FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine 4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL GOING WEST We’ll be back on the West Coast for CLM’s 2024 Construction Conference, which will be held in Huntington Beach, California Sept. 18-20. Be sure to join us for the largest gathering of insurance and litigation professionals serving the construction claims and litigation management industry. Reconnect with friends and colleagues, and get ready for an in-depth learning experience with many roundtable discussions on the most pressing topics facing construction claims and litigation professionals today. For more information and to register, head to theclm.org, and I’ll see you in Huntington Beach. Construction Claims Are Making Me Hungry In our Winter 2023 issue of Construction Claims, authors Ivette Kincaid and Alexa Stephenson of Kahana Feld took a deep dive into OCIPS, comparing the layers of protections they offer to assembling a burrito. When the proper ingredients are used and careful attention is paid to assembling each layer, you end up with a harmonious success. When flavors clash, it all starts to fall apart. In the case of an OCIP, this can happen when there are differences in interpretation among the many involved par- ties, which can slow down the resolution process. Kincaid and Stephenson wrote, “Contractors and developers, much like discerning burrito connoisseurs, must weigh the pros of comprehensive coverage and cost savings against the potential cons of clashes over interpretation and limited customization. Just as constructing the perfect burrito requires careful consideration of each ingredient, making the most of OCIP policies involves thorough assessment, open communication, and a dash of legal expertise.” In this edition, Kincaid and Stephenson return to whet our appetites once again. This time, they compare the careful planning and development necessary for risk transfer strategies to making a souffle. Both require planning ahead; and essential, quality ingredients. “Early preparation, planning, and the right ingredients are necessary for effective risk transfer just like baking a souffle,” state Kincaid and Stephenson. Check out their feature, “Risk Transfer: The Souffle of Construction Litigation” on page 26 to learn the ins and outs of an effective risk transfer strategy. And on that note, I need to decide whether I’m ready to eat lunch or dessert! K PHIL GUSMAN Editor Phil.Gusman@theCLM.org SUMMER 2024 ISSUE 2 • VOLUME 9 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© 2024 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. ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. Williams 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. PRESIDENT Susan Wisbey-Smith VP PARTNERSHIPS Jeremy Campbell SENIOR ACCOUNT EXECUTIVE Laurel Metz ACCOUNT EXECUTIVE Megan Josd DIRECTOR OF CONTENT Phil Gusman ASSOCIATE EDITOR Angela Sabarese ASSISTANT EDITOR Fran ClarkWorld-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 do readers need to know about the American Arbitration Association’s (AAA) recently revised version of the Construction Industry Rules and Mediation Procedures? A: For the first time in nearly a decade, the AAA issued a revised version of the rules applicable to construction industry disputes proceeding before the AAA. The recent amend- ments to the rules, which went into effect on March 1, 2024, were developed with input from various construction industry stakeholders around the country. The AAA advised that the intent behind the updated rules is to promote efficiency, clarity, modern technology adoption, and to meet the evolving needs of the construction industry. A few notable changes in the updated rules include the following: Regular Track Procedures Availability of Videoconferencing: Under the new rules, preliminary hearings may now be held by videoconferencing as well as by tele- phone or in person. Confidentiality: Under the new rules, the AAA and arbitrators are now expressly required to keep all matters proceeding before the AAA confidential, and arbitrators now have the spe- cific authority to issue confidentiality orders. Consolidation and Joinder: The rules con- cerning consolidation and joinder have been amended in multiple respects including that any requests for consolidation or joinder of addi- tional parties now must be filed before appoint- ment of the merits arbitrator for the matter (as opposed to the prior 90 days after filing time period), and adoption of a new 14-day window for responses to such requests. Dispositive Motions: Under the new rules, arbitrators are now required to consider the cost of a dispositive motion in connection with determining whether leave for a party to file such a motion will be allowed. Modification of Awards: Under the new rules, arbitrators now have the authority to “clarify” their awards. The rules previously allowed only for correction of clerical, typo- graphical, technical, or computational errors. As previously, the new rules do not permit reconsideration of the merits of an award. Fast-Track Procedures Applicability: Under the new rules, the ceiling for fast-track procedures has been raised to in- clude any matter in which no disclosed claim or counterclaim exceeds $150,000. Prior to this amendment, the amount was $100,000. Form of Award: Under the new rules, awards in fast-track matters will be a standard form award. Parties are permitted to request a more detailed award, but such request may result in the matter being transferred out of the fast- track procedures. Procedures for Large, Complex, Construction Disputes Appointment of three-arbitrator panel: The threshold amount for appointment of a three- arbitrator panel has been raised from $1 mil- lion to $3 million. Understanding the impact of these newly revised rules on the dispute resolution methods available to parties in the construction industry is important not only in the event a dispute arises, but also at the time of contract formation when dispute resolution methods typically are selected. K NEW RULES David A. Slocum Partner, Freeman Mathis & Gary LLPKEY SPONSORSHIP OPPORTUNITIES AVAILABLE NOW: Sponsorship@TheCLM.org ALL OTHER QUESTIONS: Help@TheCLM.org BUILD THIS INTO YOUR 2024 CALENDAR REGISTRATION NOW OPEN CONFERENCE CONSTRUCTION SEPTEMBER 18-20, 2024 HUNTINGTON BEACH, CA8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS ANIMAL CROSSING Horizontal girders were put into place in time for Earth Day in a “construction milestone” for the Wallis Annenberg Wildlife Crossing. According to ABC, each girder weighs between 126 and 140 tons. The crossing, in Agoura Hills, California, will span the 101 freeway and will “ultimately reconnect long fractured global biodiversity hotspots in the region,” according to the Annenberg Foundation. It is being designed to provide wildlife with a safe place to cross the freeway into other habitats. The crossing, funded through a public-private partnership, is scheduled to be completed in 2026. PHOTO CREDIT: JON KOPALOFF, GETTY IMAGESNext >