December 05, 2018

How to Structure a Persuasive Prehearing Brief in Construction Arbitration

By Kate Krause, Krause Dispute Resolution, Denver, CO, Division 8 (International Construction)

The prehearing brief submitted in a construction arbitration is one of the most powerful opportunities you will have to positively influence the arbitrator to find in your client’s favor. Although the actual presentation of the evidence at the hearing is critical, all the evidence in the world will not be enough if the arbitrator cannot piece the evidence together into a coherent picture of the facts and law supporting your claims or defenses. Moreover, the prehearing brief may be the only place where the applicable legal principles undergirding a party’s position can effectively be presented (the law can sometimes be presented in a post-hearing brief, but arbitrators often do not request such briefs).

To be persuasive, the prehearing brief must provide a roadmap for the arbitrator to follow to apply the law to the facts of the case to arrive at the findings and conclusions that will support an award in your favor. This roadmap serves multiple purposes. First, it can assist you in preparing for the hearing to ensure all necessary evidence is presented. Second, it will help the arbitrator follow the evidence during the hearing and understand how each piece of evidence fits into the legal framework of the case. Third, it will present the facts and the law in the light most favorable to your client, enhancing your prospects of winning your case. And, finally, it can be used by the arbitrator as a checklist to ensure that the award addresses all of the claims and evidence adduced at the hearing, thereby minimizing the possibility of any challenges to the award.

The prehearing brief of any party must persuade the arbitrator of the validity of each of the claims or defenses asserted. At a minimum, it must include the law setting forth the elements of each claim, the facts establishing each element or the absence thereof, and the exhibits and witnesses that will present those facts. However, to be persuasive, the prehearing brief must also tell a story: what was the nature of the project and the work required to complete the project; what were the parties’ contractual obligations; what were the means and methods required to perform the work; how did the disputes arise; what, if anything, did the parties do to attempt to resolve the disputes; and why is the claiming party entitled (or not entitled) to prevail on its claims. This story must be carefully woven throughout the brief to enhance the arbitrator’s understanding of your case and persuade the arbitrator of the validity of your client’s position.

The following outline can be adapted to almost any case to present a cohesive and persuasive prehearing brief. The format can be used by the Claimant or the Respondent, selecting those sections that apply to the party’s case.

1.  Summary of the Project. The first section of the brief of either party should present a brief summary of the project to put the story into context. Describe the project, identify the contractual relationship between the parties, and summarize the progress of the work. If there is a dispute about the means and methods employed by one of the parties, provide a short summary describing those means and methods (never assume that the arbitrator is familiar with the particular construction processes used on the project). Next, briefly enumerate the disputes that arose between the parties and how those disputes led to the filing of the demand for arbitration.

2.  Claims for Relief. This will be the second section of the Claimant’s brief. If the Respondent is asserting counterclaims, this section will follow the Respondent’s section setting forth the defenses to the Claimant’s claims.

a.  In general.  Each of the claims (or counterclaims) should be presented in its own subsection, with the following suggested subheadings:

                        (i) Elements of the Claim. Outline the elements of the claim, cite the applicable law, and attach copies of the cited cases.

                        (ii)  Evidence Establishing the Claim. Summarize the facts that will be presented to establish the existence of each element of the claim. After each fact is identified, include a list of the key exhibits and witnesses that will provide evidence of that fact. For example: “The Claimant performed the change order work immediately upon receiving direction from the Owner. [Exhibit C-3 (2/15/16 email from Owner to Claimant directing the change order work); Exhibit C-5 (3/10/16 email from Owner to Claimant confirming completion of the change order work); Testimony of Messrs. Adams and Jones.]” Identify any contractual notice requirements or other conditions precedent, and include a list of key exhibits and witnesses demonstrating compliance with those requirements. The type and amount of damages being claimed should not be discussed in these sections, as they will be addressed in one or more separate sections on damages.

                        (iii)  Defenses Asserted by the Other Party. Discuss any affirmative defenses raised by the other party, setting forth the legal standard that must be met and why such defenses cannot be established. Again, list the key exhibits and witnesses supporting your position.

b.  Delay claims. In most cases, a delay (or acceleration) claim will require some form of schedule analysis to establish that the delay in performance of the work was attributable to the other party’s actions or was otherwise outside your client’s control. Schedule analyses are usually presented by expert witnesses and are difficult to summarize in a prehearing brief. However, it is important to prepare the arbitrator for the expert testimony by presenting an explanation of the methodology used by the expert (e.g., critical path as-planned vs. as-built), the acceptance of this type of analysis in the industry, and the results of the analysis. For example, the results might be presented as follows: “The expert concluded that the 10-day delay in the contractor’s receipt of the final design documents was the direct and sole cause of the 10-day delay in the contractor’s start of the excavation, and this in turn resulted in the 8-day delay in the contractor’s completion of the work (the contractor having accelerated the work to reduce the potential delay).” As with the presentation of any claim, the key exhibits and witnesses should be identified.

c.  Damages. The damages that may be available for breach of a construction contract are often quite unique, and both entitlement and quantum must be addressed in the prehearing brief. Although entitlement to some form of damages will be addressed in the subsections on the elements of each claim, entitlement to certain types of damages should be addressed in the damages subsection. Extended overhead and lost labor productivity, for example, will require proof of entitlement beyond merely establishing that a breach of contract has occurred. Once entitlement has been addressed, if necessary, the calculation of damages must be discussed. Expert testimony may again be required to establish the proper methodology to calculate damages, and the same type of presentation of the evidence should be made as discussed in the section on delay claims. If there is more than one accepted method for calculating damages, present all of the methods in case the arbitrator determines that your preferred method is not supported by the evidence. It is also important to ensure that the list of key exhibits includes the underlying project cost records that were used in calculating the damages.

d. Interest. Following the discussion of damages, a subsection should be included on entitlement to and calculation of interest. Calculations based upon alternate damages awards (if only certain claims are successful) should be provided.

4.  Defenses to the Other Party’s Claims. This will be the second section of the Respondent’s brief (following the Summary of the Project). In the Claimant’s brief, defenses to any counterclaims should follow the Interest subsection. Each of the claims should be addressed in separate subsections, with the responding party setting forth its analysis of the elements of the claim (citing the applicable law and attaching copies of the cited cases). Next, discuss the ways in which the claiming party failed to establish one or more elements of each claim, and include the key exhibits and witnesses that will support the underlying facts. Finally, highlight any errors in the proposed methodology and/or calculation of delay, damages and/or interest, summarizing any expert testimony that will be presented.

5. Costs and Attorneys’ Fees. The legal basis for an award of costs and/or attorneys’ fees should be presented here. The amounts of the fees and costs being requested should not be included, as they will not be fully known until completion of the hearing, at the earliest. In most cases, the total amount requested will be presented through an affidavit of fees and costs submitted after the hearing.

6. Summary.  The brief should end with a short summary of your claims or defenses, the damages and interest sought, if any, and whether you are seeking an award of costs and/or attorneys’ fees.

7.  Attachments. Copies of all cases cited in your brief should be attached. In addition, it would be helpful to attach a chronological list of all exhibits referenced in your brief, using the same descriptions as your exhibit lists (which should be sufficiently detailed to help identify the exhibit for the arbitrator, both during the hearing and when the arbitrator is preparing the award; e.g., “2/15/18 email from Contractor to Owner re: Change Order #2,” rather than “February email re: changes”).

A prehearing brief that is structured in accordance with this recommended outline, that weaves in the history of the project and the disputes throughout the narrative, and that persuasively presents the facts and law supporting your case, will significantly increase your chances of success.