Robinson+Cole’s Construction Group has been ranked #35 in the second annual The Top 50 Construction Law Firms™ list published by Construction Executive magazine on June 19, 2020.
“We are honored to receive this ranking and be listed among the top 50 firms in the country,” said Robinson+Cole Construction Group Chair Gregory R. Faulkner.
In recent months, Robinson+Cole’s construction lawyers have worked across the country on many significant and unique projects worth billions of dollars in construction value. Our clients are owners, designers, and contractors, and we advised them on all aspects of these projects, from the earliest stages of project delivery selection to the ribbon cutting. This work
In November 1989, I was a second year law student interviewing with firms in Connecticut and New York for a summer associate position. During the Thanksgiving Holiday, I scheduled an interview with a small firm in New Haven. The firm’s primary area of practice was construction litigation. I had no idea what “construction litigation” entailed,
I suppose that it is apropos that I have been delayed in writing this final piece in the four-part Limitations of Liability series, relating to subcontract pay if paid and flow through clauses. Being more than one step removed from a project’s funding source, subcontractors are used to being dealt with last, and only after a lag in the schedule, whether foreseeable or not. Subcontractors will tell you that “it” tends to flow downhill, and financial issues and project glitches tend not to improve by the time they make their way to the subcontractor, whether the issues or glitches are tied to the subcontractor or not.
Their concerns regarding delays in payment appear to be justified. In a recent ENR survey, thirty percent (30%) of payments from contractors to subcontractors were late, by an average of 36.4 days. Eighty-Three of the subcontractors surveyed reported that more than 6 in 10 payments were past due. Although most states now have prompt pay laws, with varying degrees of penalties, the survey reflects that these laws seem to have minimal impact on the timing of payments. Perhaps these timing issues relate to project owners holding funds as long as possible to earn additional interest, but with interest rates so low, that seems unlikely. Maybe project owners are being cautious and remain as far ahead of their contractors and subcontractors as possible in the funding of the project. More likely, subcontractors are reluctant to harm their business relationship with contractors, or simply don’t wish to incur added costs in pushing the timing of payments.
Continue Reading Limitations of Liability – Scenario 3: Pay if Paid and Flow Through Clauses
This is the third post in the four-part series “Limitations of Liability—The Elephant in the Room.”
Owners often attempt to limit their liability to contractors through what is commonly known in the construction industry as a “no damages for delays” clause. Much like waivers of consequential damages, a “no damages for delays” clause, which limits damages for construction delays, accelerations and other inefficiencies, can serve a fair purpose, despite the perceived severity to a contractor who falls behind schedule for reasons beyond its control. These delay-related costs (especially indirect costs such as extended home office overhead or lost bonding capacity) tend to be speculative and difficult to prove. Proving and defending delay claims is also a very expensive proposition, both as to entitlement and quantum. Finally, project owners presume that contractors are better prepared to confront project delays, and to carry costs for such a contingency in their pricing.
In many jurisdictions these clauses are fully enforceable, albeit with limited exceptions that courts have restricted in recent years. Contractors that choose to ignore these clauses do so at their peril.
Nonetheless, no contractor can anticipate every delay or impact, and a protracted delay in a project can have a devastating financial impact on the construction team. There should be a means by which contracting parties can fairly allocate the cost issues that come with unexpected delays, without leaving the door open for speculative claims.
Continue Reading Limitations of Liability— Scenario Two: No Damages for Delay Clauses
This is the second post in the four-part series “Limitations of liability—The Elephant in the Room.”
Waivers of consequential damages have become the industry standard, and these clauses are found in most industry templates. Let’s pick on the AIA form, since it’s still the most commonly used on commercial construction projects. The AIA A201 General Conditions, § 15.1.6, states:
§ 15.1.6 CLAIMS FOR CONSEQUENTIAL DAMAGES
The Contractor and Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. This mutual waiver includes
.1 damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and
.2 damages incurred by the Contractor for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit except anticipated profit arising directly from the Work.
This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination in accordance with Article 14. Nothing contained in this Section 15.1.6 shall be deemed to preclude an award of liquidated damages, when applicable, in accordance with the requirements of the Contract Documents.
The origins of this clause in the construction setting are often traced back to a New Jersey case called Perini Corporation v. Great Bay Hotel and Casino, Inc., involving the construction of a casino in Atlantic City. The casino owner won $14.5 million in lost profits in an arbitration against the contractor on what was originally a $16.8 million GMP project. The New Jersey Supreme Court affirmed the arbitrator’s decision. The AIA and other industry groups reacted almost immediately by adding a clause to their contract forms, like the one above, purporting to waive “consequential damages” that may be claimed by either party arising out of the contract.
Continue Reading Limitations of liability—Scenario One: Waivers of Consequential Damages
This is the first post in the four-part series “Limitations of liability—The Elephant in the Room.”
One or more of the following scenarios takes place in my office virtually every day:
Inevitably, when I flag these clauses for my clients, they tell me that they either didn’t contemplate such risks when they first got involved, or they don’t anticipate that these clauses will present an issue for them. It’s understandable.
Continue Reading Limitations of Liability – The Elephant in the Room
Those of us who work in the design and construction industry have a good idea of what drives a successful project. In short, we see a successful project as one that finishes on time and within the budget.
I am incredibly grateful for all that our group has achieved as a construction practice, thanks in large measure to the support of the construction industry and the community in which we do business. It has been an R+C tradition to acknowledge our place in the community and in the industry to which we provide
On February 26, 2015, Roy Cooper of Arcadis and I reprised our popular Workshop for the University of Hartford’s Construction Institute, “Managing Legal Exposures.” One of the slides in our presentation quotes a wise jurist on the subject of construction project scheduling:
Except in the middle of a battlefield, nowhere must men coordinate the movement of other men and all materials in the midst of such chaos and with such limited certainty of present facts and future occurrences as in a huge construction project…Even the most painstaking planning frequently turns out to be mere conjecture, and accommodation to changes must necessarily be of the rough, quick and hoc sort, analogous to ever changing commands on the battlefield.
Blake Constr.Co. v. C.J. Coakley Co., 431 A.2d 569 (D.C. App. 1981).
Of course, the stakes on even the largest construction projects are not nearly as significant as those on the battlefield. That said, nothing creates as much exposure to a construction project team as the failure to manage and promptly address scheduling changes. Similar to the battlefield, the one thing that can be anticipated is the unanticipated. Those who are successful are those prepared for the unexpected.
Risk mitigation for project delays can and should be addressed as early as the selection of the project team, and in the preparation of the contract documents. The following should be considered long before the “chaos” of construction: