Verdicts & Settlements (front page), December 12, 1997

In the field of construction defects, an experienced general contractor is most important if the observed defects cross over into more than one field of expertise. A knowledgeable general contractor should have the ability to link the other construction disciplines (such as plumbing, electrical and structural engineering) together into a cohesive entity so as to thoroughly define the connectivity between all the other various construction disciplines. Without this cohesiveness, it is possible to see only a narrow perspective of these construction issues.  Furthermore, without the appropriate connectiveness of the various trades, the costing procedures will be prone to errors because of duplication of the numerous construction procedures involved.

Additional importance is placed on the contractor's ability to be successfully deposed or to testify at trial in the field of construction forensics. But the contractor's real test comes with the ability to aid counsel at arbitration or mediation meetings. The capacity to work with opposing experts and to understand the true significance of compromising the issues in order to amve at a settlement that is agreeable to all parties is extremely important. An expert's understanding of how this process works best comes only with time and experience. Those attorneys who use inexperienced experts will sow the seeds for their eventual crop failure. Yes, experts must gain experience somewhere, but they should be brought along slowly by experienced personnel during a training period prior to their trial by fire.

In construction defect cases that involve more than one discipline, the general contractor is in a similar posidon to an army colonel who coordinates and directs the lower echelon officers, who in turn direct and coordinate the companies and squads to provide a cohesive army in order to satisfy the goals of the colonel.

Similarly, a good general contractor will coordinate and marshal the other construction experts into a cohesive and organized entity to benefit the employing attorney. just as any colonel starts out from the nanks of the most junior officers and goes through the routine training that will enable him or her to attain the next rank, a general contractor should learn the various disciplines of the other trades from the ground up in order to understand all the construction procedures that make up the completed project. Such understanding by the general contractor will be parlayed into the required forensic doctrines that will provide the solid groundwork found to be most useful to counsel.

This merger of the construction and legal disciplines is of paramount importance to counsel's successful pursuance and conclusion of the case, whether for the plaintiff or defense. Without this cohesive merger, the case is probably doomed to fall into a type of infinity that doesn't serve the best interests of the parties -‑ because, for example, there is the added expense of continual litigation, often long past the point of fiscal practicability. And the construction issues in the case tend to become far more important than the legal issues, thus pushing the case closer to the expense and uncertainty of trial rather than to mediation or arbitration. The greater the complexity of the case's construction issues, the greater the need for coordination between the experts and counsel; without this organization of disciplines, the confusion of issues together with their calculated costs can become a litigator's nightmare.

The cost breakdown prepared to remediate the alleged defective construction conditions is a document always subject to the most stringent of challenges by all parties. Among those challenges, by reason of the costed defect itself, are how often the defect occurs or where it occurs, or why the defect is in fact a construction defect. Other challenges include how the cost to remediate was arrived at and what sources were used in order to develop an accurate costing of the particular defective element. And finally, challenges involve how the determination was made to class the alleged defect as a defect and whether the defect provide consequential damages to other construction elements.

Today, more than ever before, with the many huge negotiated damage settlements, carriers are looking to the consequential damages provisions in their policies for payout protection. These provisions generally state that unless the damage caused by the alleged defective labor or materials installed by their policyholder causes damage to another construction element, there is no coverage for that defect.

Therefore, the question is whether the subcontractor's work caused damage to another contractor's work. The lack of fire safing or improperly nailed shear panels, are generally code violations as well as probable deviations from the approved plans. But they may not in and of themselves he sufficient to qualify as consequential damages and therefore be covered by the insurance policy. Of course, without adequate policy coverage, there is generally no case; without an appropriate cost breakdown of the proposed remediation work, there can be no fiscal settlement of the issues.

These questions must all be appropriately answered for the case to proceed to a successful conclusion, because the cost‑breakdown document is at the heart of the matter. The soul of the matter is the accuracy, strength and fortitude of the testimony of the various experts. The body of the case of course, is the counsel's ability to marshal an those forces in the most practical manner to accomplish the settlement goals.

Counsel's ability to see the big picture should not always be transmitted to each expert, but should be apportioned on a need to know basis. Although many experts are capable of handling more of the case than their specialty requires, the attomey must remain the general of his or her small army.

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