By Steve Rizer
During WPL Publishing’s recent webinar on differing site conditions in construction, one of the big questions that popped up in the “Q&A” portion of the program centered on what constitutes a reasonable level of investigation -- and then discovery -- on the part of a contractor. What have the courts said on this issue? What is the best strategy for convincing a court or jury that the contractor did indeed act in a reasonable manner?
Webinar speaker Robert Shaffer, special counsel for Sedgwick LLP, informed professionals attending the event that “unfortunately, as with most of these issues,” determining an appropriate level of investigation “really depends on the circumstances and the nature of the project, the nature of the site, and what a reasonable contractor under those same circumstances would have done in the bidding process. So, really, you have to look at what a reasonable contractor would do, and if a reasonable contractor would have done something that you did not do, then you’re probably going to be on the hook for what you did not discover.”
Co-presenter Marilyn Klinger, a partner in Sedgwick’s Los Angeles office, then provided some insight into how a judge or jury can be persuaded that a reasonable investigation did take place. “We’ve seen trials where the party will bring in experts -- say, geological experts -- to say what should have been there [and] what engineering people know about a project site. But, the better approach is to bring in essentially your competitors, in a sense -- contractors themselves -- to testify as experts about what the people in the industry do and what they perceive as the reasonable level of investigation…. It’s an eyes-of-the-beholder kind of thing, where a court or a jury -- often a jury -- will evaluate and decide whether what you did was reasonable….”
Shaffer then commented on how he has seen cases of this sort unfold. “We’ve seen cases where not visiting the site at all is not reasonable, but we’ve also seen some cases where the contractor is not required to go out and hire experts and conduct borings and other things prior to bid. The courts recognize that the bidding process happens very quickly, and they don’t expect the contractor to expend a lot of funds. So, somewhere in the middle there, depending on the project, is where you should be.”
Earlier in the webinar, Klinger and Shaffer discussed scenarios in which claims for differing site conditions may arise, the history of risk for differing site conditions, contractual provisions dealing with differing site conditions, and the differences between Type 1 and Type 2 differing site conditions.
To purchase a recording of the 90-minute webinar, “Differing Site Conditions: The Big Game of Shifting Risk,” visit http://constructionpronet.com/Products/2014-8-1DSCad.aspx.