Three topics affecting the construction industry are discussed in the Winter 2012 issue of the Journal of the American College of Construction Lawyers. These subject areas (in five articles) are as diverse as the practice of construction law.
Dean Thomson’s thoughtful piece on the constitutional deficiency of DBE regulations for federally-funded DOT projects is the Journal’s lead article. What began as research into a bidder’s pout at the lack of DOT regulatory clarity for the use of DBE subcontract bids ripens under Dean’s scrutiny into an analysis of the practical vagueness in DOT affirmative action programs. The article then takes the next step, and posits cogently that these regulations are not only unconstitutionally vague but also inimical to the affirmative action goals they were promulgated to achieve. Last, the article describes a workable alternative, utilizing a system which can prefer DBE subcontractor bid prices by a pre-set percentage. This is an article sure to get those little grey cells spinning
Second is John Cameron’s comprehensive article on contractor warranties. The article begins with an outline of principles governing warranties and defenses commonly raised to warranty claims. These principles form the baseline for the meat of the article – issues involving the duration of a contractor’s warranty. Key to this article is the intersection between a warranty and a correction-period promise, and the overlaid problem of latent defects. John explains the majority and minority common law rule on preemption of potentially competing clauses, and the treatment of the warranty/correction period dichotomy under standard form contracts. This well-researched article also provides drafting tips to achieve clarity of intent.
The third topic is arbitration, and this issue contains three thought-provoking articles. Carl Ingwalson, Adam Mow, and Elysian Kurnick have penned a thorough trip through the compendium of situations in which nonsignatories to an arbitration agreement may nonetheless be compelled to arbitrate. Amply supported by opinions from across the nation, the authors describe and document the “contractual linkage” that must run from the situational dispute covered by the written arbitration agreement to the nonsignatory sought to be compelled to arbitrate. The authors further address recent authority allowing the neutral as well as a court to decide “who’s in.”
Last, Allen Overcash and Mark Friedlander offer two instructional pieces on how to improve the construction arbitration process. These are “views from the tower,” as each of these individuals has more ADR experience than a baker’s dozen of arbitral experts.
In “What’s Wrong with Construction Arbitration – We Don’t Know the Issues!,” Allen Overcash takes on arbitral neutrals. He challenges neutrals to ascertain with particularity the issues in dispute as quickly as possible, prior to information exchange and other discovery. In Allen’s opinion, the matter of formulating the issues should not be left to the parties. This is particularly true, says Allen, if the parties’ counsel differ as to what the issues really are. After all, it is difficult to decide a dispute if it is not clearly articulated. To carry out the expectations of those who have opted for arbitration due to its flexibility and efficiency, the neutral must join, conduct, and conclude the hunt for early and effective disclosure of the precise factual and legal issues in dispute.
Mark Friedlander’s arbitration piece is aimed more at parties and counsel. He implores disputants to consider empowering a “samurai” neutral to provide more decision-related input during the entire arbitration process. Also styled “arbitrator-directed arbitration,” Mark’s revisions to the process would grant the arbitrator, rather than the parties, the primary responsibility for questioning witnesses, with questions from the parties’ counsel being asked afterwards. Also, Mark’s samurai arbitrator would, early and often, candidly share his or her preliminary thoughts about the facts and the law with the parties and their counsel. In this way, the parties would not be in the dark as to the arbitrator’s leanings, and would adjust their presentations to the issues that matter to the arbitrator. Knowing more about what your neutral is thinking would also promote earlier and more cost-effective settlements. Mark’s five samurai rules are worth more than a second look.
These five articles are welcome complements to the Journal's body of legal scholarship. All will be worth digesting and re-reviewing for years to come. My hat's off to the authors and my thanks to the cadre of associate editors at the Journal of the ACCL – Jim O'Connor, Doug Oles, Charles Sink, and Alec Moseley.
A. Holt Gwyn
Conner Gwyn Schenck pllc