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Construction Law Update March 6, 2003. AGENDA GOOD MORNING! ARE YOU ASKING FOR IT? (TEN TIPS FOR INEFFECTIVE CEOs) CHOOSING A PROCESS WHEN, HOW, WHAT.

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Presentation on theme: "Construction Law Update March 6, 2003. AGENDA GOOD MORNING! ARE YOU ASKING FOR IT? (TEN TIPS FOR INEFFECTIVE CEOs) CHOOSING A PROCESS WHEN, HOW, WHAT."— Presentation transcript:

1 Construction Law Update March 6, 2003

2 AGENDA GOOD MORNING! ARE YOU ASKING FOR IT? (TEN TIPS FOR INEFFECTIVE CEOs) CHOOSING A PROCESS WHEN, HOW, WHAT TO CLAIM LITIGATION PRIMER

3 Are You Asking For It?

4 Top 10 Tips For Highly IneffectiveCEOs

5 Tip # 10 Develop a Culture of Fault (seek out & punish the innocent)

6 Tip # 9 Ignore the Maxim: Think Lots; Say Little; Write Less. (especially in the age of !)

7 Tip # 8 Be “Penny Wise & Pound Foolish” (don’t train staff; don’t pay to have someone look over the contract documents; wait ‘til its too late)

8 Tip # 7 Put Personalities Ahead of Practicalities (silverbacks in the Ruwensori; “I don’t care what it costs” mentality)

9 (try to be somewhere in between)

10 Tip # 6 Plan to Make Your Money at the Back End, Not the Front (forget the bid, just get the job; make profit on extras)

11 Tip # 5 Draw Lines in the Sand, Early & Often (encourage a culture of confrontation & withdrawal)

12 Tip # 4 Rely on Ambiguity & Assumption (i.e. b.s. baffles brains)

13 Tip # 3 Choose Volume over Quality of Business

14 Tip # 2 Ignore “Credibility” as a Corporate Asset (look ahead, examine industry leaders. What is their chief asset? Capital or Credibility?)

15 Tip # 1 Give all your Profit to Lawyers & Consultants

16 10. Develop a Culture of Fault (seek out & punish the innocent) 9. Ignore the Maxim: Think Lots; Say Little; Write Less 8. Be “Penny Wise & Pound Foolish” (don’t train staff; don’t pay to have someone look over the documents) 7.Put Personalities Ahead of Practicalities (silverbacks in the Ruwensori; “I don’t care what it costs” mentality) 6.Plan to Make Your Money at the Back End, Not the Front (forget the bid, just get the job; make profit on extras)

17 5. Draw Lines in the Sand, Early & Often (culture of confrontation & withdrawal) 4. Rely on Ambiguity & Assumption 3. Choose Volume over Quality (TCA program) 2.Ignore “Credibility” as a Corporate Asset (look ahead, pick industry leaders. What is their chief asset? Capital? Credibility?) 1.Give all your Profit to Lawyers & Consultants

18 Keeping Your Options Open

19 Charge of the Light Brigade A British cavalry charge during the battle of Balaclava (present day Ukraine) in the Crimean War in October, A misunderstanding led to British cavalry being committed to an attack up a valley strongly held on three sides by Russian troops. Of 673 men, less than 200 returned from the misdirected charge.

20 When to Claim

21 How to Claim

22 What to Claim

23 Early Claims Resolution Strategies

24 Choosing a System

25 Perfect Procedural Fairness (if the process is right, the result doesn’t matter) Perfect Outcomes (if the result is right, the process doesn’t matter) “Your Case” (individual outcome) “Big Picture” (- societal outcome -fair exchange of values -fair balancing of risks) Golden Rule: “Do unto others etc.”

26 Divine Justice Perfect Procedural Fairness Perfect Outcomes Your Case Big Picture Utopian IdealJustice Circles Coin Toss / Lottery Trend of Courts Trend of ADR (Faith in System) (Faith in person)

27 Choosing A Process

28 CCDC 40 CCDC 40 was developed for use with CCDC , Stipulated Price Contract Provides rules for mediation and arbitration, depending on contract Mediation: entirely voluntary, no-risk process Arbitration: most formal ADR procedure, binding outcome

29 Dispute Review Boards Parties select DRB panelists at outset of contract More formal than jobsite negotiations, less formal than arbitration No discoveries, but full documentary backup DRB first meets after exchange of documents By the time the claim reaches the DRB, DRB should be partially familiar with the claim DRB conducts “meetings”, not “hearings” DRB issues detailed written recommendation for resolution of dispute Any party dissatisfied with outcome can litigate

30 Mediation Non-binding method of dispute resolution Parties select mutually acceptable mediator Parties voluntarily reach their own mutually acceptable solution or settlement Dispute is not translated into legal issues Process is not a litigation look-alike Mediation is usually conducted without prejudice to the parties’ legal positions If mediation does not result in a solution, parties are free to commence litigation

31 Arbitration Binding process of dispute resolution Parties choose one or more neutral arbitrators (panel) Evidence is presented to panel Panel renders award in form of damages or other equitable relief Limited right to appeal binding and final award Enforcement mechanisms under provincial Arbitration Acts

32 Pros and Cons

33 Arbitration Pro Summary in smaller cases Access to expertise on panel It’s all confidential. No-one ever needs to know Con Ends up looking & costing like litigation in bigger cases You end up paying for 3 judges and a courtroom No precedent value – the law stagnates

34 Mediation Pro It works People go in committed to settlement It is not necessary to do production and discoveries Con It works The built-in assumption, going in, is that there is a not payor, not payee People can lie in mediation and get away with it

35 Litigation ProDecisive Coerces settlement Adversary system gets to heart of matter Specialty courts shape an industry, take “big picture view” ConExpensive Investment at point of settlement can be high So do other systems, if done right Little or nothing ever goes to trial anyway

36 Litigation # 2 “He saw a lawyer killing a viper, on a dunghill hard by his own stable. And the Devil smiled, for it put him in mind of Cain and his brother, Abel.” – Coleridge “For, as thou urgest justice, be assured thou shalt have justice, more than thou desirest”. – Merchant of Venice IV, I, 315

37 The Lost Art of Settlement

38 Example: Settling a Lien Claim Preliminary Points: It is not necessary to settle every issue to settle the lien issue Interim or partial settlements are perfectly fine Issues in rem may be separated from issues in personam

39 Settling a Lien Claim II Solicitor’s Role: Bring parties together in such a way that they are likely to reach mutually satisfactory terms Know the parties, be aware of state of various lien claims, status of pleadings and particulars, status of productions and discoveries

40 Settling a Lien Claim III Three essential tools for reaching settlement: Good spreadsheets Good mathematics Good communications

41 Settling a Lien Claim VI For more detail: D.W. Glaholt, Conduct of a Lien Action (to be published by Carswell later this year)

42 When All Else Fails LITIGATE

43 Litigation Primer

44 4. To calculate costs: witness x 2 x 5- 10,000 = trial cost; trial cost x 2 = total cost 3. If it goes to trial, it will cost each side the amount in issue, before you get a judgment 2. Your first loss is your best loss 1.A bad settlement is better than a good lawsuit any day of the week Golden Rules

45 Day # K (Claim) Net Gain Net Loss $500,000 Claim Goal: Get to Zero

46 6-12 Months From Day # K (- 500K claim -150K accrued costs) Net Gain Net Loss A dozen or so letters; two case management conferences; some production; some discoveries

47 12-18 Months From Day # 1 - $250,000 settlement -500K (- 500K claim -250K accrued costs +250K settlement) Net Gain Net Loss More discoveries; more motions; a successful mediation

48 18-24 Months From Day # 1 - $500,000 Judgment -200K Net Gain Net Loss

49 Loss Months From Day # 1 -1,300K (- 500K claim -500K accrued costs - 300K to successful defendant) Net Gain Net Loss

50 Questions?


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