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The Key to Claims-Free Projects: Identifying and Managing Construction Project Risk - Chapter 4 - AAA Handbook on Construction Arbitration and ADR - Third Edition

Author(s): 
Ava J. Abramowitz
Page Count: 
14 pages
Published: 
March, 2016
Author Detail: 

Ava J. Abramowitz is a George Washington University Law School Professorial Lecturer in Law. She serves as a mediator in the federal courts of the District of Columbia. Formerly an assistant U.S. attorney for the District of Columbia, deputy general counsel of the American Institute of Architects, and a vice president of Victor O. Schinnerer & Co., she is also a founding fellow of the American College of Construction Lawyers. Ms. Abramowitz is a senior fellow of the Design Futures Council and served as the first public member of the National Council of Architecture Registration Boards. A graduate of Brandeis University and the George Washington University National Law Center, she is the author of THE ARCHITECT’S ESSENTIALS OF NEGOTIATION (John Wiley & Sons, 2009). This chapter was adopted from a paper first presented to the ABA Forum on the Construction Industry.

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I. Introduction

Containing claims and their costs looms ever larger in the minds of those concerned with profitability and repeat business. In the construction field, the major construction industry groups selected mediation as litigation has become more costly.
 
While everyone expects litigators to suffer some loss of business as a result of the move to mediation, there are two other probable unanticipated results. The first will be a drop in reported cases, as fewer disputants shoot it out in court. This will make legal counseling harder. After all, who can be certain of what courts will say when they lack opportunities to speak? The second will be the rise of the “full-service counselor” who focuses as much on preventing claims as on resolving them.
 
This chapter explores some of the key factors involved in claims prevention and how construction parties and counsel can use this information to succeed by better managing project risk. While the chapter focuses on construction data, its findings are universal. With analysis and strategic thinking, businesses can prevent claims, maintain client relations and profit in the process.
 
Ask yourself, “When does a construction project start to go bad?” You may think it’s sometime after the contract is implemented, perhaps after the parties try to ignore a dispute that has arisen or attempt to resolve it without the benefit of counsel. But research suggests that construction projects get into trouble much earlier, well before litigators are retained to deal with the problem. In fact, the project may already be in trouble even by the time the lawyers begin contract negotiations.