Dnjcon14 session 1 ppt final
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New Jersey Construction Litigation Conference
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Dnjcon14 session 1 ppt final
- 2. Michael Serafino Lend Lease Americas Gary Werner Schenck Price Smith & King LLP Mark Fleder Connell Foley LLP Kelly Heuer Navigant Consulting Inc.
- 4. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule”?
- 5. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule”?
- 6. Time-driven costs which increase as the result of project delay ◦ Idle/extended labor and equipment ◦ Material/labor escalation ◦ Extended storage ◦ Extended field office overhead ◦ Extended home office overhead
- 7. Types of Delay Inexcusable Delay ◦ Caused by contractor, subcontractors, suppliers: no time, no money ◦ Contractor pays late completion damages or recovers lost time at own expense Excusable Delay ◦ Caused by third party or force majeure event – time, no money ◦ Owner grants time extension and gives up late completion damages Compensable Delay ◦ Owner-caused or caused by event owner liable for: time and money ◦ Provided contract does not have No Damages for Delay or Limitation on Delay Damages clause
- 8. Contractor’s Obligation to Mitigate Delay Contractor has affirmative obligation to mitigate owner’s damages Contractor must consider: ◦ Known length of delay/ allow for mitigation ◦ Other ongoing jobs that could use resources ◦ Cost of redeploying resources ◦ Ability to demobilize & remobilize resources ◦ Impact to subcontractors & suppliers ◦ Cost of mitigation activities
- 9. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule”?
- 10. In Claims Resolution ◦ Identification of the Issues ◦ Assist Counsel with Discovery/ Document Management ◦ Detailed Claim Analyses ◦ Assist Counsel with Strategy ◦ Assist Client/Counsel with Negotiation, Mediation, Arbitration or Litigation
- 11. Recommended Practices of Experts ◦ Avoid conflict of interests and appearances of conflict ◦ Qualifications - rely on others qualified in areas beyond own expertise ◦ Obtain all information to avoid reliance on assumptions and, if necessary, be prepared to document/explain ◦ Consider other opinions relative to the issues ◦ Evaluate reasonable explanations of causes and effects ◦ Perform investigations and conduct tests with integrity ◦ Maintain custody and control over materials entrusted to care ◦ Strive to maintain professional, dispassionate demeanor
- 12. Considerations ◦ Investment ◦ Expense ◦ Timing ◦ Objectives ◦ Strategy
- 13. Benefits ◦ An organized, cohesive and comprehensive analysis of the facts ◦ An independent, objective viewpoint ◦ Both advocacy and critique of the claim ◦ True quantification of the value of the claim ◦ Strategy for pursuit of the claim
- 14. Typical Tasks ◦ Site visits ◦ Review claim submittal / substantiation documentation ◦ Identify claim issues ◦ Document organization and control ◦ Develop issue files ◦ Productivity analysis ◦ Damages analysis ◦ Interrogatories ◦ Deposition and discovery support ◦ Responding to opposing party’s experts ◦ Testimony and graphics
- 15. How to Control Costs ◦ Agree on a scope of work ◦ Agree on schedule ◦ Agree on budget ◦ Agree on deliverables ◦ Identify tasks client staff can perform Compile issue files Database development / data entry Deposition support
- 16. Conclusion ◦ Objective is to present a compelling professional opinion based on a credible interpretation of the facts ◦ Make certain the expert follows recommended practices ◦ Make certain the expert has experience with the type of claim ◦ Control/manage costs
- 17. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 18. Extended Field Overhead Escalation Costs Idle Labor and Equipment Storage Costs Additional Material Storage Costs Unabsorbed Home Office Overhead Liquidated Damages
- 19. Field Office Rental Field Office Vehicles Salaries of Field Office Staff Utility Charges for Field Office Other Expenses (consumables) that Support The Field Office
- 20. Financing Costs Costs for Lost Beneficial Occupancy Costs for Facilities Maintenance Costs for Equipment Rentals Costs for Staff Personnel Costs for Project Inspection Storage Costs Potential Moving Expenses Additional Design Services Escalation Costs
- 21. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 22. All Contractual Documents Internal Financial/Expense Records Utility Charges Certified Payrolls Project Correspondence, Emails, Text Messages, etc… Meeting Minutes Personnel Logbooks, Notes, etc… Photographs Video Record of the Project Weather Reports
- 23. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What Is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 24. Costs Incurred to Support the Work on the Project Costs Not Directly Chargeable to a Specific Project but rather Apportioned to each of the Contractor’s Projects
- 25. Salaries of Home Office Personnel Home Office Utilities (telephone, cable, etc.) Home Office Equipment Home Office Rental Expenses Insurance Costs that Cannot be Specifically Assigned to a Specific Project Taxes
- 26. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What is “Unabsorbed Home Office Overhead”? Can “Profit” Be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 27. What is “profit” in the construction contractor’s world Is “profit” (different from “mark-up”) recoverable on top of actual costs for claims? Can a contractor properly assert and collect “lost profits” on work/projects not undertaken because of a claim situation?
- 28. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What Is “Unabsorbed Home Office Overhead”? Can “Profit” be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 29. Owners in privity of contract with the general contractor Construction managers hired by owner and in privity with one or more trade contractors or a general contractor. Property owners where legal liability is created by filing mechanics/construction liens. Subject to being barred by the “economic loss rule”, other parties (such as design professionals) may well be exposed to contractors’ claims.
- 30. What are Project Delay Damages? What is the Proper Role of Damages Experts? What are the Difficult “Items” of Delay Damages Claims? What are Other Sources of Information Useful to Proving Delay Damages Claims? What Is “Unabsorbed Home Office Overhead”? Can “Profit” Be Recovered as Part of Delay Damages? Against Whom are Contractor’s Delay Damages Recoverable? What is the “Economic Loss Rule?”
- 31. Against whom can a contractor recover construction claim damages (NOT personal injury or property damages)? Does the “lack of privity” defense still hold up as good law to block contractors’ “economic losses” claimed against a party where there is no “privity of contract”? Is the “economic loss rule” gaining popularity in jurisdictions by way of court decisions.
- 33. Michael Serafino Lend Lease Americas 212.592.6733; michael.serafino@lendlease.com Gary Werner Schenck Price Smith & King LLP 973.631.7841; gfw@spsk.com Mark Fleder Connell Foley LLP 973.535.0500; mfleder@connellfoley.com Kelly Heuer Navigant Consulting Inc. 646.227.4218; kheuer@navigant.com