Made with FlowPaper - Flipbook Maker
CONSTRUCTION CLAIMS BUILDING BETTER OUTCOMES WINTER 2022 ISSUE 4 • VOLUME 7 ALLOCATION OF RESPONSIBILITY IN CONSTRUCTION- DEFECT LITIGATION DESIGNERS AND CONTRACTORS WORKING TOGETHER AND SPLITTING APART THE CATASTROPHIC CONSEQUENCES OF AVOIDING FORWARD-THINKING CONSTRUCTION Building Toward the FutureTHE ANSWER IS One Company For All Your Consulting Needs GENERAL LIABILITY & CONSTRUCTION FORENSICS WHO HAS PROVIDED THE GL & CD FORENSIC INDUSTRY WITH EXPERT SERVICES SINCE 1989? 34 mcconsultants.com 800.729.0355WINTER 2022 | 3 THE BONES WINTER 2022 10 ON THE COVER BUILDING TOWARD THE FUTURE The Catastrophic Consequences of Avoiding Forward-Thinking Construction 22 CLEANING UP THE MESS What Happens When Construction Lien Claims Beget Construction-Defect Counterclaims, and How To Avoid Both 26 FROM THE GROUND-UP Allocation of Responsibility in Construction-Defect Litigation 30 CAN THIS MARRIAGE BE SAVED? Designers and Contractors Working Together and Splitting Apart 14 California Who’s Responsible? 16 Washington Coverage Too Narrow 18 Arizona Contract Terms Vs. Public Policy 20 Florida Updating the ‘25% Rule’ 4 Inside Counsel Managing Relationships 6 Ask the Expert Solving the Labor Shortage 8 Survey This A Late Sendoff for Hurricane Season 34 Back to School FEATURES STATE-BY-STATEDEPARTMENTS4 | CONSTRUCTION CLAIMS TheCLM.org/Magazine INSIDE COUNSEL MANAGING RELATIONSHIPS Relationships are a key to success, both in life and in business. In the construction industry, relationships are often strained when something goes wrong on a project, whether it’s the relationship between the owner and the general contractor, the gen- eral contractor and subcontractors, or the designer and the contractor. In this issue, we examine the disputes that typically arise between the various parties involved on a construction project, and how claims and litigation profession- als can best navigate those disputes. “From the Ground-Up” (pg. 26) takes a detailed, scientific look into allocating responsibility among multiple parties in a construction-defect claim. “Cleaning Up the Mess” (pg. 22) looks at how to untangle the ugly situations that can arise when owners file construction-defect counterclaims in response to contractor payment claims on newly built projects. And “Can This Marriage Be Saved?” (pg. 30) examines the rela- tionship between designers and contractors and the important role designers play in the resolution of various types of disputes that can arise on a construction project. Also in this issue, authors Terence Kadlec and Maren Mooney follow up on Kadlec’s feature from our last edition about building structures that can withstand the more frequent natural disasters we face. Since Kadlec wrote his last feature, “Fortifying Against the Apocalypse,” Florida’s west coast was devastated by Hurricane Ian, and this issue’s cover feature, “Building Toward the Future” (pg. 10), in part looks at how some structures built to stricter building codes fared during the massive storm. We Want To Hear From You In our last issue, we ran the cover feature, “According to You,” where we surveyed CLM’s construction professionals and asked them whether they believe the construction claims environ- ment is getting better or worse. We received great responses and positive feedback on the article, so, beginning in 2023, we will be reaching out to you each issue to answer a question about the construction claims marketplace. It is an opportunity for us to connect more closely with our readers, and a chance for you to see where your peers stand on the biggest issues facing the industry. Keep an eye out for the surveys, and we look forward to hearing from you! K PHIL GUSMAN Editor Phil.Gusman@theCLM.org WINTER 2022 ISSUE 4 • VOLUME 7 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© 2022 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 ACCOUNT EXECUTIVE Megan Josd SENIOR MANAGING EDITOR Phil Gusman VP OF CONTENT Eric Gilkey ART DIRECTOR/ PUBLISHING OPERATIONS MANAGER Jason T. WilliamsWorld-class. Global reach.800.580.3228 rimkus.com YOU HAVE QUESTIONS. WE PROVIDE ANSWERS. WHAT HAPPENED? WITH SO MUCH AT 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 factors are contributing to the continued skilled labor shortage in construction, and what needs to be done to create a strong pipeline of available talent? A: The Associated General Contractors of America and Autodesk each year partner to measure the state of construction workforce shortages. The results of this year’s Workforce Survey show that construction labor shortages remain severe. One of the main reasons labor shortages are so severe in the construction industry is that most job candidates are not qualified to work in the industry. The most common explanation for difficulty in filling posi- tions, cited by 77% of firms, is that available candidates lack the skills needed to work in construction or cannot pass a drug test. These shortages are exacerbating the impacts of widespread supply chain disrup- tions that have made it difficult for firms to get materials delivered on time and are driving up the cost of those materials. Eighty-two percent of firms report projects they work in have been delayed because of supply chain challenges and two-thirds—66%—have projects that have been delayed because of labor shortages. Many construction firms are working aggressively to cope with and/or overcome workforce shortages. In addition to raising base pay rates, 45% are providing incentives and bonuses, and a quarter of firms have also improved their benefits packages. Beyond improving compensation, they are also getting more involved in preparing future workers for careers in construction. Fifty-one percent of survey respondents—up from 37% in the 2021 survey—report they have engaged with career-building programs such as high school, college, or technical school construction programs. The Associated General Contractors of America and chapters like the AGC of New York State are supporting the industry with a broad range of workforce development initiatives. This includes the national associa- tion’s Construction is Essential targeted digital recruiting campaign and its Culture of Care workplace retention program. We are also calling on federal, state, and lo- cal leaders to invest in the kinds of career and technical education programs that will expose more existing and future workers to the many career opportunities that exist in construc- tion. These programs also provide the essential skills employers are seeking. Public officials must also continue work- ing to untangle supply chains. These supply chain problems have a similar potential to undermine new infrastructure and manu- facturing investments. Addressing labor shortages and supply chain problems will ensure that the con- struction industry can upgrade America’s infrastructure, modernize our manufacturing sector, and help deliver a more reliable and cleaner energy grid. K SOLVING THE LABOR SHORTAGE Stephen E. Sandherr CEO Associated General Contractors of America2023 CONFERENCES & EVENTS theclm.org/events DATES, LOCATIONS, TOPICS, AND EVENT NAMES SUBJECT TO CHANGE. Sponsorship: sponsorship@theclm.org Speaking: help@theclm.org Networking and Education In-Person DATE CONFERENCE/EVENT LOCATION MARCH 29-31 CLM Annual Conference TAMPA MAY 17-18 Work Comp, Casualty & Risk Management Conference CHICAGO JUNE 6-8 Claims College (Level 1) VIRTUAL JUNE 21 Spotlight: Product Liability NEW ATLANTA JUNE 22 Spotlight: Transportation NEW ATLANTA JULY 18 Spotlight: Product Liability NEW PHILADELPHIA JULY 19 Spotlight: Transportation NEW PHILADELPHIA AUGUST 16-19 Claims College (Levels 2, 3 and ACP ) BALTIMORE SEPTEMBER 27-29 Construction Conference AUSTIN OCTOBER 19-22 Litigation Management Institute CHICAGO TBD One-Day Conference/Holiday Party NYC TBD Women’s Forum & Emerging ClaimsTech TBD TBD Litigation Management Symposium TBD TBD Preventing Nuclear Verdicts Workshop TBD8 | CONSTRUCTION CLAIMS TheCLM.org/Magazine SURVEY THIS A LATE SENDOFF FOR HURRICANE SEASON Damage to beachfront homes from Hurricane Nicole in Daytona Beach, Florida. The storm made landfall near Vero Beach, Florida early in the morning on Nov. 10 as a Category 1 hurricane, about a month and a half after the much stronger Hurricane Ian ravaged Florida’s west coast. This issue’s cover story, “Building Toward the Future” (pg. 10) discusses how outside-the-box thinking is required to ensure our structures survive future natural disasters of all types, from hurricanes to wildfires. CREDIT: GETTY IMAGESNext >