Part 1 of our video series on construction litigation best practices
In this kickoff episode of our “Building the Case” video series, Jerry Crawford shares the document management strategies that keep projects out of lengthy litigation and helps teams build stronger cases when disputes arise.
The Challenge of Construction Documentation
In Part 1 of our “Building the Case” series, Brett Burney from Nextpoint sits down with Jerry Crawford, Principal Director of KGC Consulting Services Limited, to discuss critical document management considerations for construction litigation. With over 44 years of experience in building and civil construction cases across Canada and the United States, Jerry brings invaluable insight into managing the massive amounts of data involved in construction disputes.
Construction disputes generate enormous volumes of ESI (electronically stored information). When litigation teams need to collect this information for review and production, it can be difficult to figure out where to start.
According to Jerry, the answer starts long before a dispute arises.
“It’s vital to have a policy for the location of both physical and electronic documents. Seldom do we see much thought given to this area of the storage of these documents and where they’re going.”
Four Essential Document Management Best Practices
1. Establish Clear Naming Conventions
Jerry emphasizes the importance of implementing good numbering and naming convention systems, especially on mega projects that can last months or even years. “A lot of times teams fail to adopt standardized templates, which is extremely important and helpful,” he notes. Without these standards, teams may talk at cross purposes about the same document or find themselves not on the same page when working through delay issues.
2. Assign Document Custody
Every project should have someone assigned custody of the official records. Contract law typically includes records retention policies, particularly for structural issues, requiring records to be available for seven years due to warranty considerations. Some projects, like solar panel installations, may have warranties extending 20 years or more.
3. Create Robust Folder Structures
Organizations need well-organized folder and subfolder structures for critical document categories, including:
- Schedules
- RFIs (Requests for Information)
- Change orders
- Meeting minutes
- Shop drawings
- As-built drawings
- Commissioning documents
4. Implement Change Management Protocols
“Too often many organizations do not have a robust change management policy,” Jerry observes. Proper tracking of change orders, including their time impact on schedules, is essential for defending or asserting positions in disputes.
Critical Documents for Construction Projects
Jerry highlights several categories of documents that prove particularly important:
As-Built Documentation: As-built drawings and schedules are vital for understanding how a project reached completion. Even if not required under contract, maintaining an as-built schedule helps stakeholders understand the project timeline.
Shop Drawings: These technical documents can become contentious. “It’s not uncommon today to see six, seven, eight submissions on the same component,” Jerry notes, which can significantly elongate the approval process.
Test and Inspection Records: These documents become crucial during handover to facility managers and for warranty tracking.
Health and Safety Records: Modern construction places heavy emphasis on safety documentation, with owners potentially facing hefty fines for accidents, even when contractors have primary responsibility.
The Risks of Poor Document Management
Jerry outlines four key risk areas when document management falls short:
- Financial Risks
Without proper time tracking templates and documentation of change order impacts, defending financial positions becomes extremely difficult. Projects facing audits, whether public or private, need clear paper trails showing where money was spent.
2. Legal Risks
In some jurisdictions, courts can impose fines for improper or poor records. The Sedona Principles, which apply in both the US and Canada, establish standards that should be observed. Perhaps most costly is the risk of losing litigation due to inferior records.
3. Operational Risks
Facility managers need complete handover documentation, including test records, inspection records, warranties, and commissioning documents. Missing or incomplete records create operational challenges and potential liability.
4. Regulatory Risks
Health and safety documentation has become increasingly critical. Contractors and owners must maintain detailed records of safety meetings, training, and policies. When injuries occur, having comprehensive training histories can make the difference in defending legal positions.
Planning for Redundancy and Security
Jerry stresses the importance of having policies for both redundancy and security. “Do you have a backup policy where [records] can’t be hacked and can be easily restored?” he asks. With some construction disputes involving more than half a million documents, organizations need robust systems to handle terabytes of information.
Key Takeaways
When asked for the single most important takeaway, Jerry’s answer is clear:
“A robust document management policy is mission critical today. It’s not an afterthought.”
He continues:
“It needs to be carefully focused and tracked on the risk register. Like an execution plan, how are they going to implement good document management to keep themselves out of lengthy, time-consuming events later, trying to reconstruct the past?”
Organizations that invest in solid document management practices from the start of a project will find themselves far better positioned if disputes arise. Rather than scrambling to reconstruct events from incomplete records, they’ll have the documentation needed to support their positions efficiently and effectively.
To learn more about construction litigation support and document management, visit nextpoint.com. For consulting services on construction claims and disputes, visit Jerry Crawford at kgcconsulting.ga.
Watch the full discussion between Brett and Jerry below:
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