By Michael Solender
Verdicts & Settlements (front page), June 12, 1998
One of the fastest growing legal specialties is in the construction defects industry, because indeed it is a burgeoning industry. With a typical condominium defects case, the general contractor probably contracted with as many as sixty various specialty sub-contractors. If the project was built in phases, dozens of additional sub-contractors may be involved, all of whom are insured with one or more carriers. Imagine how many different attorneys need to be involved merely to construct a cursory defense. In construction defects cases, the costs of remediating the construction defects issues for both plaintiff and defense are of paramount importance and are developed and prepared by a team of experts who include cost consultants. These construction experts have at their disposal, an imposing array of aids in order to help them compute the real costs of refurbishment and other remediation measures. These aids include books and computer programs containing fairly comprehensive costing information. These books and programs are generally updated by their publisher every year in order to keep abreast with the changing prices, as determined for the various geographic areas of the USA. Although some cost estimators have little if any practical experience, generally the single most important aspect of cost estimating lies in the practical experience of the estimator and the best estimators generally have the pragmatic knowledge obtained through actual on-site job experience such as general contracting estimating. With this type of experience, the stage is set to accurately estimate construction defects and their various elements.
The second most important element in estimating the construction cost, is the count. This indicates the number of times a particular anomaly or alleged construction defect is found to exist in the subject project. This isn't as simple as it sounds, since different expert's cost estimators often see and count these defect elements quite contrarily from each other. Even when a specific construction anomaly is found on a particular building, the expert's cost estimator may claim that the defect is present in every building in the complex. Indeed, that may very well be the case, but perhaps that particular defect only occurs in 5% of each building. Yet the claiming expert makes it sound as if the problem is universal throughout each building in the complex and will further claim that the condition therefore exists in 100% of the buildings in the project. Of course this is true, but the claim's elements can be very misleading.
The human elements of estimating, which were used long before computers and their marvelous programs were invented, now comes into play. The measurements taken from the job-site and the blue-prints, which are less subject to numerical error by the careful cost estimator, are now tabulated and formulated into the cost matrix. Like it or not, the margin of error in this element of costing often tends to occur in proportion to the experience or the pressure brought to bear on the estimator. Of course this pressure is often of their own making, brought upon by their desire to satisfy their client’s sometimes unreasonable expectations.
Costing is one of the specialty areas that deserves a great deal of respect, but inaccuracy in this particular arena is often caused by those construction experts supplying the particular remediation data together with the count, to the cost expert, who then has the task of completing the construction cost breakdown using those given figures. If this count or remediation method is inaccurate or exaggerated then the document prepared from these figures must therefore be flawed right from the start. Even if the cost expert is truly an expert and prices out all the construction elements accurately, the bottom line will still be incorrect.
Being fair and accurate with the count of the found defects is not merely a desirable requirement, it is as necessary as is the truth in a court of law. Each party to the dispute, brings to the negotiating table, a team of forensic experts and each one assuredly knows how to count. An expert who uses any exaggeration within a system of counting, can therefore be readily disputed by the actual evidence, thus leaving his forensic expertise and reputation as well as his counsel's case, left in the proverbial dust of having to defense the indefensible. Although the truth does not always prevail, most attorneys would prefer to render their services on the side of the truth, for indeed in construction defects cases as in many other genres, the truth can generally be attached to hard evidence. Strict adherence to accuracy is what will generally win the day and those who disregard this dictum, tend to be eaten alive by opposing counsel, let alone opposing experts.
Integrity, when coupled with accuracy and a sound forensic understanding of all the facts, are a tough combination to beat, yet even that amalgam may be overcome by a more persuasive argument and that's generally where experience tends to play a major role. Now a new phenomena is starting to raise its ugly head, wherein construction expert witnesses for the plaintiffs are offering their services with payment for these services to be delayed until the case has settled. What happens should their clients lose or settles for a diminished dollar amount? If this business practice doesn't taint the expert's findings, nothing will.
Cost estimating is very subjective yet every attorney knows that figures can be made to lie and in construction estimating all numbers can easily be expanded exponentially. Take for instance, a 200 unit complex which has an alleged defect which plaintiff s experts contends exists in 100% of the units and the estimated cost is $750, to remediate each unit, for a total cost to repair this particular element in the entire complex of $150,000, plus burden. Another expert has a different point of view and a different method of fixing the problem for a cost of $450 for each unit. Furthermore, he saw this particular defect as occurring in only 40% of the units he viewed, for a total cost to remediate of $36,000, (80 x $450). If each expert adds the same 40% burden to his original figure, the second estimator has now shaved $159,600 from the original estimate on just this one element.
One of the chief problems with inaccurate numbers is that it sends the wrong message to all concerned counsel, especially the cost expert's employing counsel, who now believes and relies on the flawed numbers. Opposing counsel who has an entirely different set of numbers, now sets the stage for the mediation process which because of the disparity in the bottom line dollars is doomed to fail from the outset. Ambiguities, in general are the bane as well as the blessing to the absolutes of the legal profession. The truth, in its simplicity and eloquence does not always receive the most persuasive articulation, thus diminishing the full force of its integrity. Experts who exaggerate the conditions and the frequency of defect occurrences, tend to perpetuate their employment rather than curtailing it, thus preserving their economic continuity. So unless experts are to be held to a higher ethical standard than the rest of the legal community, there really exists many strings to this bow with arrows pointing in numerous directions.
- THE CONSTRUCTION-EXPERT INDUSTRY: NEW DEVELOPMENTS
- CONSTRUCTION EXPERT CAN BUILD, OR DESTROY, A CASE
- EXPERTS CAN RESOLVE THE CONSTRUCTION CONUNDRUM
Standard Construction Seldom Is Really Standard
- IN CONSTRUCTION CASES, BEWARE THE HIRED GUN
- THE COMPOUND CONSEQUENCE OF ONE
DISCERNABLE LEAK INTO THE BUILDING ENVELOPE
- THE PANDORA'S BOX OF WATER INTRUSION LITIGATION
- CONSTRUCTION DEFECTS:
How To Avoid the 'Big Hit' And Costly Litigation
- BUILDING A REMEDY
- WATER TORTURE
- THE WATCHER
A third party may be helpful in
monitoring the expert when figuring
the cost of repairs
A general contractor should have knowledge in related
construction areas to be effective as an expert witness
- EXPERT EASE
OPINION: Construction defect experts
provide lists of failures in
for litigation, and counsel must verify reports for accuracy
- MAKE READY
Properly prepared expert witnesses will save both time and money.
- ON THE WATCH
- THE NUMBERS