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May 29, 2024

Construction Industry EDR/Dispute Prevention – Fidevia 20 Year Case Study

Dan Cicala
Vasiliki Varvaki via Getty Images

Vasiliki Varvaki via Getty Images

I have spent a lifetime in the construction industry. My grandfather, Donato (Danny) Scorzello, was a loving man and a plumber from the Bronx. My father, Pat Cicala, operated a high-end general contracting firm in NYC and is the most brilliant construction man I know. As a result, construction has been at the heart of what I love and who I am since I was a child.

After 20 years and nearly 300 projects with an aggregate value exceeding $2,800,000,000, Fidevia Construction Management & Consulting has seen virtually no claim survive project closeout. Sure, there are enormous amounts of money to be made in resolving and litigating disputes and there will always be a need for that; however, it is out of respect and appreciation to my family, the ethically dedicated team at Fidevia, and all the designers, constructors and other project participants who have worked alongside us, that I endeavor to share how Fidevia has delivered excellent project experiences and prevented claims because, I believe, the highest ground is in striving to prevent the disputes before they happen.

The following 10 “Considerations” and additional practical suggestions are discussed in the context I know best: construction, but they are fundamentally applicable across all industries and relationships.

10 Considerations

  1. Understanding & Commitment To EDR: Litigation, Arbitration, Mediation, ADR and, more recently, EDR come in all shapes and sizes. At the end of the day, it is all about the never-ending effort to “build a better mousetrap,” to come up with a more tailored and appropriate dispute resolution process to resolve claims in less time with less direct and collateral cost. After a lifetime in the construction industry (as a constructor, litigator, and then Owner’s Representative), I have come to realize and treasure that the best overall value and the best “mouse trap” just so happens to also be the moral high ground – preventing disputes altogether. EDR should be implemented as early as possible, arguably before anyone even realizes there is a dispute to resolve. In short, Dispute Prevention (DP).

    Foundationally, successful DP is directly correlated to the breadth and detail of one’s subject matter and legal knowledge, ideally, to such a degree that one can actually foresee the extrapolated dispute at an extremely early stage. This foresight can be achieved by acquiring a deep practical background in construction, coupled with litigation experience to know how construction process gone awry gets sorted out in the claims world. Whether that’s visualizing the eventual impact of sensitive correspondence hastily written, insensitive communication between parties, or a poorly assembled and administrated project meeting, we can’t insert thoughts into someone’s subconscious like Leonardo DiCaprio in Christopher Nolan’s Inception. However, subject matter knowledge with legal experience will arm the committed EDR professional with the prospective insight to practice DP ethically and successfully.
  2. Building A Collaborative Team: Developing a feeling of family serves as the best model for team building and collaboration. Creating meaningful appreciation and respect for everyone involved in the project as well as in their respective roles and responsibilities is paramount at every step of the construction process. Everyone should succeed. Parenthetically, team building done well creates lifelong friendships.
  3. Listen And Earn Trust: Revering the words attributed to St. Francis of Assisi, “seek to understand before being understood.” This idea is an integral part of the learning and fact-finding process. After all, if one is to employ EDR, one must truly understand where others are coming from, and the method to accomplish this end is to truly listen and seek understanding. How beautiful it is when our opinions are respected, and we feel truly understood. As we universally strive to listen and respect everyone and their opinions, over time we continue to build trust, the bedrock of Fidevia’s success in DP. This nexus between listening, understanding and building trust between the parties and in those who are assigned or assume leadership roles is artwork.
  4. Develop And Execute A Plan: “If you aim at nothing, you are sure to hit it!” or “If we fail to plan, we might as well plan to fail.” In short, establish goals, get all project participants to buy into them as early as possible, and positively reinforce rules of engagement throughout the project. This includes reining in and/or providing support to weaker or straying project participants.
  5. Professional Resolution At The Root: Create an expectation that the entire team is comprised of respected professionals, all obligated to play an integral part toward the overall success of the project. Wherever possible, resolve/prevent project issues where they arise; in the field between individual workers, with supervisors if necessary, with project management if still not liquidated, etc. Just like with a wound, the longer we allow most problems to fester, the more difficult it is to resolve them amicably.
  6. The Goal Of A Handshake: While today’s world requires the memorialization of important documents and events, the symbolic value of a heartfelt handshake while looking directly into someone’s eyes to cement a meeting of the minds, harkens to a time when a person’s word was his/her bond. This consideration cannot be understated.
  7. Belief In Human Connectivity And The Table Paradigm: While virtual communications are becoming more and more productively utilized, aspire to emulate if not accomplish having the team sit around a table to discuss and resolve problems. Table logistics should support all participants being able to see and hear each other and if it can be over a meal, all the better! ‘Breaking bread’ can bring people together on many levels.
  8. Finish On Time: Construction delay claims are some of the most difficult claims to resolve due to the complexity of schedules, the number of parties involved, and issues normally interconnected. So, use EDR and finish on time!
  9. Reasonable Contracts: Contractors, particularly on public projects, often do not have a say in contract language. Regarding those who draft contracts, there is a tendency to create over-zealous terms to hyper-insulate their clients; however, equitable, commercially practical agreements are best. In any event, we should use the contract as a shield and not a sword. Additionally, some multi-step dispute resolution process with litigation as a last resort is what we typically recommend. Projects with the most successful EDR do not need to fall back on contract language. Where DP and EDR are not possible, exert the extra time to make sure everyone fully understands the facts and the law as well as the contractual dispute resolution process moving forward, including the time and costs associated with litigation, how and when cases are settled and the likelihood/unlikelihood of success.
  10. Flexible Approach With Unwavering Principles: As the wise Jedi Master Yoda guides us, “Do or do not. There is no try!” While you may not have all the answers or know exactly how to get to where you are headed, don’t let that stop you from moving forward. EDR requires a great deal of flexibility, but never at the expense of ruining credibility for failing to maintain principles. Have faith and stay committed. EDR is worth it!

Preventing The Most Difficult Disputes

The most difficult disputes invariably involve parties with a previous history of conflict, an axe to grind, or negative personal traits (inflated ego, selfishness, insecurity, fear, etc.), and/or where team leadership is absent. Some ideas to consider:

  • Isolate Issues whether that be people or problems
  • Delicately Handle Communications – Be private to avoid egos; Speak publicly to create consensus; Avoid name calling or labels – The words you speak become the project you build.
  • Challenge Difficult Parties to Step Up – Encourage them to be accountable and professional.
  • Seek Reasonable Communicators – Inject reasonable people into the project, within or outside of the organization… whoever may be able to better communicate or reason with a difficult party.
  • Extend Rope – While risky, in the long run, exercise best efforts and ‘extend rope’ to difficult parties until they realize they are only hanging themselves with their behavior.
  • Exert patience – Backing off or taking more time to address an issue better facilitates effective EDR. The parties (and the overall project) benefit from learning to resolve disputes among themselves … in short, patience provides the opportunity for organic collaboration to occur.
  • Work Harder/Occupy the Moral High Ground – Tirelessly uphold your respect for others and selflessly commit to EDR. 

Be Ambitious

The moral high ground in leadership is the most important factor of successful EDR.

  • The Peacemaker – A Beatitude within The Sermon on the Mount (arguably the greatest speech ever made) calls us to be peacemakers.
  • The Golden Rule – Supporting “what goes around, comes around,” “those who seek equity, must do equity,” – the principle of treating others as you would wish to be treated is universal (The Golden Rule is still Golden!)
  • There is Always a Solution – Aspirationally, with requisite intention, effort, and commitment.
  • Love – Finally, notwithstanding its seeming misplacement in the context of a construction project, if we possess and convey love in all we do and to those we engage, anything, including excellent EDR is possible!

In summary, strive to resolve disputes as early as possible and prevent them where you can. You will save time, money and preserve professional relationships. But most importantly, by practicing EDR you are disseminating the qualities that we all look for in our most important relationships – foresighted compassion, willful understanding, and a selfless love and respect for others. The highest ground .. and shared with others.

    Dan Cicala

    Fidevia

    Dan Cicala is an attorney licensed in NY, NJ, and PA and is the founder and leader of Fidevia, a Construction Management & Consulting Firm with a home office in Pennsylvania. Dan wishes to warmly thank Maddie Landis, an aspiring law student, for her assistance in researching and editing this article.

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