The Virtual Shift: Navigating the New Online Construction Litigation Landscape

The landscape of construction litigation has undergone a seismic shift in recent years. Gone are the days of crowded hotel conference rooms for mediations and face-to-face depositions. Today, construction litigators find themselves navigating the complex terrain of virtual proceedings. This paradigm shift, accelerated by COVID-19, has introduced new challenges and opportunities in handling multi-party construction-defect cases.

This article explores the pros and cons of conducting litigation events virtually in the context of complex construction litigation, including how these changes have affected the timeline of cases, altered professional relationships, and impacted judges’ understanding of intricate issues. Additionally, we investigate the claims-management perspective, discussing how virtual proceedings have influenced reporting and claim processing in an environ­ment of stricter court-imposed deadlines.

The Rise of Virtual Proceedings

The construction industry, traditionally reliant on in-person interaction, has been thrust into the virtual realm. This transition has been particularly noticeable in depositions, hearings, and mediations. Virtual platforms, such as Zoom, have become the new courtrooms, mediation spaces, and deposition venues.

Just a few years ago, when virtual interac­tions were considered “novel,” the adoption of online proceedings in construction litigation was initially met with skepticism. However, as lawyers and clients alike adapted to the “new normal” the benefits of this approach became increasingly apparent: Cost savings on travel and venue rentals, increased scheduling flexibility, and the ability to include geographically dis­persed parties have proved to be advantageous.

However, challenges are also read­ily apparent. In virtual depositions, there is a potential for off-camera coaching. For example, in a contentious corporate repre­sentative deposition, there could be suspicion that someone off-camera may be coaching the witness so that he may formulate perfect responses. But, in person, it would be clear if the witness was receiving any assistance. In addition, in a complex deposition of an architect, if the architect struggles to reference complex blueprints virtually, the result could lead to misunderstandings about design flaws and affect the outcome of the case.

Indeed, the intricacies of multi-party, construction-defect cases add another layer of complexity to the virtual litigation landscape.

Pros and Cons

Pros:

• Cost-effectiveness. Virtual proceed­ings significantly reduce travel costs, accommodation expenses, and venue rental fees.
• Increase accessibility and time ef­ficiency. Participants such as experts, witnesses, and clients from different locations can join from anywhere and participate with ease.
• Document sharing. Digital platforms facilitate seamless sharing and presentation of documents and evidence.

Cons:

• Technical challenges. Internet connectivity issues, user errors, audio/video problems, and unfamiliarity with the technology delaying and disrupting the litigation event are all potential challenges. For instance, presenting “as built” plans to a witness can often be difficult to review if zooming in causes the image to become pixelated and difficult to read.
• Reduced non-verbal communication. It is harder to read body language and facial expressions in virtual settings, which can be crucial in negotia­tions and witness examinations.
• Difficulty in building rapport. The informal interactions that often occur during in-person proceedings are lost in virtual settings.
• Attention span and engagement. Participants may find it harder to stay focused during long virtual sessions.

While it is true remote proceedings can reduce travel expenses and streamline scheduling, they also often compromise the nuanced interpersonal dynamics crucial to effective advocacy. In the context of multi-party construction-defect cases, these pros and cons are amplified.

Case Management Impacts

One of the most significant changes brought about by virtual proceedings is the impact on case management. Whileit might seem that virtual proceedings would universally increase efficiency and speed up the process, the reality is more nuanced, and not necessarily beneficial.

On one hand, virtual proceedings can expedite certain aspects of a case. For instance, scheduling can be more flexible (depending on caseload), travel time is eliminated, and document production and review can be streamlined through digital platforms. However, although seemingly efficient, virtual proceedings may come at a cost to legal professionals. As remote options become increasingly prevalent, lawyers find themselves caught in a paradoxical cycle of overwork and over-performance. The expectation for rapid turnaround times, fueled by the perceived convenience of virtual platforms, has dramatically intensified the pace of legal work.

This acceleration has led to a surge in case filings, an expanded workload, and higher client and judicial expectations. Unfortunately, this is despite no corresponding increase in the number of attorneys who specialize in construction-defect litigation. This reality also plagues claims professionals, whose caseloads can exceedthat of the attorneys they work with.

Consequently, all professionals engaged in construction litigation are grappling with heightened pressure to manage more cases simultaneously, manage high-volume discovery on these cases rapidly, and respond to client/legal team inquiries with unprecedented speed. This virtual shift has inadvertently created a work environment where the boundaries between professional and personal time blur, and stress levels are at an all-time high.

Mediator Challenges

Mediators play a crucial role in resolving construction-defect disputes. Accordingly, the shift to virtual proceedings has presented them with unique challenges:

• Building relationships. In virtual settings, mediators may find it more difficult to establish the personal connections that often facilitate negotiations. The informal conversations that occur during breaks or in hallways are largely lost.
• Reading non-verbal cues. Mediators rely heavily on body language and facial expressions to gauge parties’ reactions and emotions. In virtual settings, these cues are often muted or undetectable.
• Managing participation. Ensuring all parties are actively engaged and not distracted is more challenging in a virtual environment where participants may be dealing with home or office interruptions. In construction-defect claims, all parties (attorneys and clients alike) must be engaged for a productive mediation.
• Facilitating private conversations. While breakout rooms are available in most platforms, facilitating quick, im­promptu private discussions is more challenging virtually requiring calls, texts, and emails during mediation.
• Handling technical issues. Mediators now need to be technologically savvy enough to troubleshoot technical prob­lems or have support readily available.

Despite these challenges, many mediators have found innovative ways to overcome these hurdles developing new skills in managing virtual group dynamics and continue to obtain positive outcomes.

Changes in Professional Relationships

The shift to virtual proceedings has significantly affected professional relationships within the construction litigation field. The reduction in face-to-face interactions has altered the dynamics between attor­neys, clients, and other stakeholders.

Positive changes include:

• Increased accessibility. Clients can more easily attend proceedings, leading to greater involvement and understanding of their cases.
• More frequent, shorter interactions. Virtual platforms facilitate quick check-ins and updates, potentially improving communication.
• Expanded networks. The ease of virtual meetings has allowed professionals to connect with a broader range of colleagues and experts across geographical boundaries.

However, challenges have also emerged:

• Reduced informal interactions. The spontaneous conversations that often occur before or after in-person proceedings no longer occur.
• Difficulty in building new relationships. Establishing trust and rapport with new clients or colleagues can be more challenging in a virtual setting. This is especially difficult if one party prefers correspondence via email only.
• Changed team dynamics. The collaborative atmosphere of a shared physical space during intense preparation periods is harder to replicate virtually.

Indeed, with increased accessibility, much of the humanity in relationships has been lost. Personal interactions generally foster stronger trust between attorneys, clients, and stakeholders, which is essential in complex construction litigation cases. Additionally, informal exchanges lead to valuable insights and relationship-building opportunities that are difficult to replicate virtually.

Judicial Understanding of Complex Issues

A significant concern in the transition to virtual proceedings has been whether judges who are newly integrating into the world of complex litigation can fully grasp the issues frequently arising in construction-defect cases without in-person hearings. This concern is particularly relevant given the often-technical nature of construction disputes.

Observations from recent years suggest a diverse picture. Positively, the use of virtual platforms allows for high-quality digital presentations, 3D models, and even virtual site tours, which can aid in explaining complex issues. Additionally, without the burden and cost of travel, expert witnesses from various locations can provide judges with more comprehensive technical information.

Negatively, technical difficulties can prove to be detrimental to arguments and hinder clear communication of complex concepts. Additionally, reduced ability to read the room makes it more difficult for an attorney to gauge a judge’s comprehension of the issue, leading to missed opportunities for clarification if attorneys are not asked to clarify.

For instance, unless it is a quick motion calendar hearing, in-person construction-defect evidentiary hearings are crucial for ensuring a fair and thorough examination of evidence. These hearings often involve complex technical details, physical evidence, and expert testimony that are best evaluated in person. Face-to-face interactions allow judges and attorneys to assess credibility, examine physical exhibits closely, and engage in real-time questioning. Conducting a similar proceeding remotely could impair these functions and cause suboptimal results.

Claims Management

The shift to virtual proceedings has significantly impacted claims management in construction litigation. Claims managers now face new challenges and opportunities in this fast-paced virtual environment.

Key impacts include:

• Accelerated timelines. Courts have often imposed stricter deadlines in virtual settings, pressuring claims managers to process and respond more quickly.
• Digital documentation. The move to digital claim files has improved accessibility but requires robust data management systems.
• Virtual investigations. Site inspections and evidence gathering often now involve remote technologies, changing how claims are initially assessed and documented.
• Communication challenges. Coordinating with multiple parties and experts virtually can be more complex, requiring new strategies to ensure effective communication.
• Increased cybersecurity concerns. With sensitive claim information being shared digitally, ensuring data security has become a top priority and focus.

To adapt, many claims management teams have:

• Implemented new digital tools for claim tracking and analysis.
• Increased their IT support to handle the technical aspects of virtual claims processing.
• Developed new training programs to help staff navigate virtual proceedings effectively.
• Created new protocols for secure digital information sharing and storage.
• Attended lectures and continuing learning programs to assist with keeping up to date on the latest developments.

While challenging, this shift has also led to opportunities for more efficient claim processing and has pushed the industry toward greater technological adoption.

The landscape of construction litigation has been irrevocably altered by the shift to virtual proceedings. While challenges persist in complex multi-party construction defect cases, the industry has demonstrated remarkable adaptability. On balance, the benefits of cost savings, increased accessibil­ity, and scheduling flexibility weigh equally in comparison to the need for new skills in virtual communication and presentation.

As we move forward, a hybrid model combining the best aspects of both virtual and in-person proceedings may emerge as the best approach, but only time will tell. What is clear is that the virtual element in construction litigation is here to stay, shaping how these complex cases are managed and resolved.

This article was originally published in CLM’s Fall 2024 issue of Construction Claims magazine and is shared here with permission from the publication.