As a construction lawyer involved in complex litigation, I am often asked to prepare a "litigation and discovery budget" for a client. As a construction client, your stomach may turn when you receive one of these budgets from your lawyer. Is there a way to control the costs of discovery in construction litigation?
According to the International Institute for Conflict Prevention and Resolution (the Center), the answer can be found in what is known as an economical litigation agreement. According to the FAQ published by the Center [pdf], the Agreement is like a "litigation prenup" that is intended to reduce the costs and delay of discovery according to the size of the matter. The procedures can be incorporated into a construction contract as follows:
Economical Litigation Agreement: Any Dispute arising out of or relating to this contract, including the breach, termination or validity thereof, whether based on action in contract or tort, shall be finally resolved by civil litigation in accordance with the International Institute for Conflict Prevention & Resolution Economical Litigation Agreement (2010 edition), by a judge sitting without a jury. In jurisdictions where advance waiver of jury is prohibited as a matter of law, or where all parties to this agreement subsequently agree in writing, such Dispute shall be decided by a jury.
If litigation ensues, the parties are bound by the procedures in the Economical Litigation Agreement, including a limited scope discovery procedure in lieu of conventional discovery. Discovery requests are limited and sized proportionally to the amount in dispute. For example, for disputes up to $10.0M, 15 interrogatories and six four-hour depositions are permitted. Discovery disputes are to be resolved by a specially trained arbitrator via telephone conference and with limited briefing. Other areas addressed by the Agreement include:
- Waiver of jury trial
- Escalating negotiations and mandatory mediation
- Waiver of service of process
- Responsive pleadings by letter or email
- Page limit on motions (3 pages)
- Executive summaries provided with each affidavit submitted
- Waiver of oral argument on most motions
- Mandatory discovery with non-electronic discovery limits
- Limits on number of interrogatories, document requests and requests for admissions
- Use of informal witness interviews
As with all other things in the construction world … it looks good on paper. But I am interested in hearing any feedback from those who have used the Center’s alternative to traditional arbitration and litigation. Anyone?