ABAs Forum on the Construction Industry: Spotting Deception and New Risks
Teaming arrangements on many projects are creating new legal hurdles, such as protection of proprietary information, equipment ownership and the departure or termination of team members, according to Dallas attorney Charles E. Hardy.
"It can get expensive if you're not protected," he said during the fall meeting of the American Bar Association Forum on the Construction Industry.
The former counsel for contractor Austin Industries was among a record turnout of more than 470 attendees, who shared strategies amid much industry change and new levels of risk.
A panel of litigation experts also counseled on how to recognize signs when witnesses or opposing attorneys may not be truthful, something that is discovered only about 54% of the time, said panelists.
Jennifer Evans Morris, a litigation attorney for AT&T, said one key sign was a rise in eye contact and a slowdown in the blink rate. John Freud, a construction mediator and president of Miami-based Mediation Solutions Inc., noted the importance of “emotional components” in mediation cases,
John Freud, a construction mediator and president of Miami-based Mediation Solutions Inc., said untruthful trial participants tend to change the subject quickly and "use too many facts." In an effort to boost the lie-detection rate to a target of 85%, the attorneys told attendees to "be aware of deception markers."
Timothy R. Sznewajs, senior managing director with FMI Capital Advisors, Inc., noted impacts from a spate of consolidation among firms, more complex environmental rules and constrained project finance, among other catalysts. "Owners are expecting firms to respond in ways that are unique," he said. "You can't just wear your contractor or design-firm hat. They want you to fix their problems."
Ernest C. Brown, a former in-house counsel at Fluor Corp., cautioned attendees that the push to modular construction will impact labor agreements and building codes "into the next decade."
Brian Henninger, inhouse counsel at Kiewit Infrastructure Group, added that early termination of a non-performing subcontractor limits the sub's recovery of damages and eases the transition to a replacement.
Peckar & Abramson Vice Chairman Stephen H. Reisman said a joint venture, not just its individual members, must be state-licensed, which can be time-consuming in states such as California and Florida. "It's a hidden trap in some jurisdictions," he said.
The ABA's 6,000-person construction group is on a roll to expand its age and gender diversity, create new education programs and boost outreach to in-house firm attorneys, said Forum Chairman Steven B. Lesser, construction practice chair of Florida-based Becker & Poliakoff. He said the rise in arbitrated and mediated legal cases is spawning "fewer reported decisions outlining problems that arise. It is our goal to identify market conditions."
The Forum has established a new fellowship program for company lawyers to attend two of its meetings each year. "In- house counsel have a breadth of experience dealing with day-to-day construction issues, and our members can benefit from their advice," added Lesser.
