Mass Timber Reduces Construction’s Carbon Footprint, But Introduces New Risk Scenarios
March 04, 2024 —
Michael Bruch & Franck Fumat - Allianz CommercialMass timber has the potential to be a critical building component for the cities of the near future given the need for the construction sector to reduce its reliance on concrete and steel to lower its Co2 emissions. However, as this market grows and mass timber buildings evolve to greater heights, the construction risk landscape will also be transformed, bringing risk management challenges for companies, according to the new Emerging Risk Trend Talk
report from Allianz Commercial.
“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial. “However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”
The need for mass timber
The building and construction sector is among the largest contributors to Co2 emissions, accounting for over 34% of energy demand and around 37% of energy and process related Co2 emissions in
2021 [1]. Given emissions reduction is essential to meet climate change commitments around the world, the need for more sustainable solutions in the built environment has become increasingly important, driven by growing investor and consumer concerns, and legislation, regulation and reporting requirements evolving quickly in many jurisdictions around the world.
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Allianz Commercial
Judicial Economy Disfavors Enforcement of Mandatory Forum Selection Clause
December 16, 2023 —
David Adelstein - Florida Construction Legal UpdatesMandatory forum (venue) selection provisions are generally construed in favor of enforceability. Parties agreed to the forum for disputes so why not enforce them, right? A recent federal district court case out of the Eastern District of Louisiana exemplifies an exception grounded in judicial economy which disfavors the enforceability of mandatory forum selection provisions. Keep in mind that this judicial economy exception is fairly limited but the fact pattern below demonstrates why enforcing the mandatory forum selection provision was disfavored due to judicial economy.
In U.S. f/u/b/o Exposed Roof Design, LLC v. Tandem Roofing, 2023 WL 7688584 (E.D.La. 2023), a sub-subcontractor filed a Miller Act payment bond lawsuit against the prime contractor and the prime contractor’s Miller Act payment bond sureties. The sub-subcontractor also sued the subcontractor that hired it. However, the sub-subcontractor’s subcontract with the subcontractor included a mandatory forum selection provision in a different form. The subcontractor moved to sever and transfer the sub-subcontractor’s claims against it to the forum agreed upon in the subcontract. The trial court denied the severance and the transfer. Below are the reasons.
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Rulemaking to Modernize, Expand DOI’s “Type A” Natural Resource Damage Assessment Rules Expected Fall 2023
December 23, 2023 —
Amanda G. Halter, Jillian Marullo & Ashleigh Myers - Gravel2Gavel Construction & Real Estate Law BlogThe U.S. Department of the Interior (DOI) anticipates proposing a new rule that would revise its “Type A” Natural Resource Damage Assessment (NRDA) regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) in Fall 2023. The proposed rule would modernize DOI’s rarely used simplified Type A procedures for assessing damages for natural resource injuries tailored at sites involving minor releases of hazardous substances, with a smaller scale and scope of natural resource injury occurring in either coastal and marine areas or Great Lakes environments (the “Type A Rule”). (See 88 Fed. Reg. 3373; see 43 C.F.R. Pt. 11 Subpt. D.) The Type A Rule was last updated in 1997.
DOI previewed the proposal in January 2023 in its Office of Restoration and Damage Assessment’s (ORDA)
Advanced Notice of Proposed Rulemaking (ANPR). In the ANPR, the ORDA surmised that the Type A Rule was rarely used in part because of its restricted scope, but also because “the model equation for each Type A environment is the functional part of the rule itself—with no provisions to reflect evolving toxicology, ecology, technology, or other scientific understanding without a formal amendment to the Type A Rule each time a parameter is modified.” Calling the existing rule “inefficient and inflexible,” the ORDA stated that its proposal to reformulate the rule “as a procedural structure” would “modernize the Type A process and develop a more flexible and enduring rule than what is provided by the two existing static models” (88 Fed. Reg. 3373).
Reprinted courtesy of
Amanda G. Halter, Pillsbury,
Jillian Marullo, Pillsbury and
Ashleigh Myers, Pillsbury
Ms. Halter may be contacted at amanda.halter@pillsburylaw.com
Ms. Marullo may be contacted at jillian.marullo@pillsburylaw.com
Ms. Myers may be contacted at ashleigh.myers@pillsburylaw.com
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Embracing Generative Risk Mitigation in Construction
February 12, 2024 —
Georgia Stillwell - Construction ExecutiveProject delays have long plagued the construction industry, with risk often identified as the primary culprit. However, finding effective solutions to mitigate risk on complex projects has remained daunting. Traditional methods for simulating risk primarily focus on extending project timelines, overlooking the diverse range of opportunities available for risk mitigation. With the construction industry’s digital transformation, generative methodologies have emerged to handle complex decision-making in uncertain situations. This article aims to shed light on the limitations of existing risk modeling and introduce a novel approach known as generative risk mitigation to enhance decision-making under deep uncertainty.
According to McKinsey, 98% of megaprojects experience cost overruns exceeding 30%. Project delays have become so pervasive that the industry has grown accustomed to them. For example, in 2022, the UK government issued ‘
The Green Book,’ which requires contingency funds in projects, such as a 44% contingency budget for standard civil projects. This implies that for a $100 million project, you should allocate $144 million to manage expected risks. There is no denying significant academic literature on the root cause of these delays: it is ‘risk,’ and there is an entire industry based on it.
Conversations with project directors and risk experts reveal the same issue, different project. And that issue is that we cannot easily forecast risk, qualify the impacts or fully understand the opportunities that exist to mitigate risks and make timely decisions. A method that will finally help us overcome this has emerged within the industry.
Reprinted courtesy of
Georgia Stillwell, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved.
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Seabold Construction Ties Demise to Dispute with Real Estate Developer
April 29, 2024 —
Richard Korman - Engineering News-RecordWhen Harry W. Seabold, co-founder and CEO of Seabold Construction, died unexpectedly in January 2023 at age 69, the Beaverton, Ore.-based general contractor, which had been in business since 1984, kept chugging along for a year on two adjacent North Portland apartment projects.
Reprinted courtesy of
Richard Korman, Engineering News-Record
Mr. Korman may be contacted at kormanr@enr.com
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Compliance Doesn’t Pay: Compliance Evidence Inadmissible in Strict Liability Actions
February 05, 2024 —
Kyle Rice - The Subrogation StrategistIn Sullivan v. Werner Co., No. 18 EAP 2022, 2023 Pa. LEXIS 1715 (Dec. 22, 2023), the Supreme Court of Pennsylvania (Supreme Court) clarified that in light of its decision in Tincher v. Omega Flex, Inc., 628 Pa. 296 (2014), evidence that a product complied with industry standards is inadmissible in an action involving strict product liability.
In Tincher, the Supreme Court overruled prior case law and reaffirmed that Pennsylvania is a Second Restatement Jurisdiction. As stated in Sullivan, discussing Tincher, under the Restatement (Second) of Torts § 402A, a “seller of a product has a duty to provide a product that is free from ‘a defective condition unreasonably dangerous to the consumer or [the consumer’s] property.’ To prove breach of this duty, a ‘plaintiff must prove that a seller (manufacturer or distributor) placed on the market a product in a “defective condition.””
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Kyle Rice, White and WilliamsMr. Rice may be contacted at
ricek@whiteandwilliams.com
The Importance of the Recent Amendment to Rule 702 of the Federal Rules of Evidence
January 22, 2024 —
Andrew G. Vicknair - The Dispute ResolverEvery litigator understands that expert witnesses play a key role in litigation, especially when dealing with construction issues. Expert testimony at trial can be a deciding factor in persuading a judge or jury in your client’s favor. It is so important that, as parties get closer to trial, litigators often spend considerable time filing motions to limit or disqualify certain aspects of expert testimony in an effort to gain an advantage at trial. Because experts are a key aspect of the trial process, it is important to understand the various rules governing use of expert testimony, primarily Rule 702 of the Federal Rules of Evidence.
On December 1, 2023, amendments to Rule 702 of the Federal Rules of Evidence went into effect which added the language in underline below and removed the language which is crossed out:
Rule 702. Testimony by Expert Witness
A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the proponent demonstrates to the court that it is more likely than not that:
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied expert’s opinion reflects a reliable application of the principles and methods to the facts of the case.
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Andrew G. Vicknair, D'Arcy Vicknair, LLCMr. Vicknair may be contacted at
agv@darcyvicknair.com
Missouri Protects Subrogation Rights
April 15, 2024 —
Lian Skaf - The Subrogation StrategistThe point at which an insurance carrier possesses the equitable right of subrogation is an issue on which the states have differed. Some allow carriers to pursue rights of subrogation immediately upon payment and some have taken stricter approaches. Missouri falls into the latter group. By not allowing the carrier the right to file suit against third-party tortfeasors until the insured provides its carrier with an assignment of all its rights, Missouri’s approach has opened the door for challenges to subrogation rights.
In Megown v. Auto Club Fam. Ins. Co., 2024 Mo. App. LEXIS 82, the plaintiff-insureds Michael and Jane Megown (the Megowns) suffered a house fire on February 8, 2016. Their insurance carrier, Auto Club Family Insurance Company (Auto Club) reimbursed the Megowns for their property damage in the amount of $722,433.56. Subsequently, the Megowns sued Auto Club for breach of contract and later amended their complaint to add claims against Tyberius Enterprises, LLC d/b/a Crag Electric (Craig Electric), the third-party tortfeasor, for direct negligence, alleging both property damage and personal injuries. Auto Club intervened in the Megowns’ claim against Craig Electric to protect its interest as subrogee for its property damage payment to the Megowns. Craig Electric settled prior to trial, paying $1,000,000.00 to both the Megowns and Auto Club, to be allocated at a later date. After a bench trial that apportioned the settlement with $722,433.56 paid to Auto Club and $277,566.44 paid to Megowns – and a jury trial awarding no further damages – the Megowns appealed.
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Lian Skaf, White and Williams LLPMr. Skaf may be contacted at
skafl@whiteandwilliams.com
