Construction defect lawsuits are among the most common disputes and litigation in the construction industry, with thousands of CD lawsuits filed each year. The good news is that the majority of CD claims settle. In California, 95 percent of CD claims settle, according to the Contractors State License Board Report to the Legislature. But even matters that settle require electronic discovery.

The eDiscovery process involves finding, collecting and sorting through terabytes of electronically stored information from a number of sources. It can also require attorney review and analysis, as well as producing files as needed for arbitration, settlement discussions and for the court. For the construction industry, the eDiscovery process can come with unique challenges, such as the sheer volume of data, the number of parties involved and the frequency of claims.

There are three main challenges and ways to manage them:

1.Data – and lots of it

The amount of data involved in a construction case can add up quickly. Consider the number of sources where data is stored – email, mobile devices, computers, servers, cloud-based repositories and more. The complexity is compounded when files are in proprietary databases, such as construction management software, or atypical formats, such as building information modeling or virtual reality software. Relevant data may also come from chat platforms, social media and texts. To be able to review this disparate data in one place often requires a tailored solution – a combination of being able to read the files correctly and format them as needed so they can be handled uniformly. That requires advanced planning, the right technology and experienced personnel overseeing the process.

The solution. Take the time to outline where all of the company data is, the types of data and who has access to it. The process may be handled internally or through a third party. It will include a thorough custodian questionnaire process, which can be set up and easily handled through an eDiscovery platform. The knowledge gained through the CQ as well as interviews of key custodians about the data will allow the company to determine where any potentially relevant files exist should a legal matter come about. Companies will also be able to do early case analysis and work out a strategy for handling the data and managing the case.

2.Multiple parties involved

It’s common for construction cases to have a number of parties involved with complex, interconnecting relationships. Such parties can include owners, general contractors, subcontractors, architects, engineers, sureties, law firms, insurance companies and others. Each entity could have multiple personnel involved. With that many custodians, there can be a lot of overlap, which could translate into duplicative work.

For example, a large construction company allowed its multiple divisions and offices in various locations to employ different law firms. Here is how that looked, using three legal matters over a six-month span.

Case A required data from three custodians. That data was collected and sent to the applicable law firm and its eDiscovery vendor. Then, Case B required data from 10 custodians. This case was handled by a different law firm, so the attorneys oversaw a data collection from those 10 custodians. That collection was sent to the corresponding firm and vendor – but two of the custodians were also in Case A. Case C was handled by yet another law firm. This case involved the same three custodians from Case A plus five from Case B, but guess what? The law firm collected data from each individual all over again.

Not only was the same data in multiple places – leaving it outside of the company’s control and internal security measures – but different people were coding those documents for privilege and following different protocols for the eDiscovery process, so there was risk from multiple directions.

The solution. Keep all data under control. That means using one platform to collect and maintain the data. Have company law firms work within the platform versus allowing company data to go out-of-house as each firm may request. When looking for the right platform, make sure it has these features:

• A way to handle legal holds – The first step of any litigation process is to notify custodians of their obligations and to preserve information that may be relevant. A platform that enables the company to easily manage it provides automatic emails, reminders, logging, reports, etc. and can reduce costs and time spent.
• A method to collect data – Data will have to be collected for legal matters, and that collection may be done early in the process to ensure data is preserved correctly under a legal hold. Find a platform that lets the company select what data to get from where and that can immediately and automatically start data collection and processing. This is probably best done through cloud-based software, which removes geography from the equation and can be done at any hour of the day or night.
• A repository to house all collected data – Data should only be collected one time, and it should be stored all in one place, including any notes or tags that may have been made for any previous legal matters.
• The ability to work with the data – Once the data is collected and accessible, the platform should allow searches for keywords and potentially relevant files, cull away unneeded documents and perform early case analysis.
• Security – Some cloud platforms are more secure than others, depending on the architecture. Make sure it’s built for the cloud, the data is hosted in a trusted environment and that the all files are encrypted right from the start.

This platform should also be able to handle the custodian questionnaire process mentioned above, and it should allow the data to be easily and securely transferred to another platform as needed, such as a solution for technology assisted review and manual review.

3.Frequent litigation

Unfortunately for the construction industry, legal matters pop up rather frequently. In addition to CD lawsuits, there are also lien and bond claims, payment disputes, breach-of-contract claims, insurance coverage suits, quality of work claims, delay claims and more. Litigation can be costly and time-consuming for any company, especially without a proper process for handling eDiscovery.

The solution. Make a plan. The eDiscovery process should not mean going back to the drawing board every time. In fact, it should be a standard business procedure that is tailored to the company’s requirements and expectations. Work with an expert to outline clear, effective and defensible processes and detail them in a customized book that outlines all company policies, procedures and best practices for each part of the eDiscovery process. That ensures every legal matter is handled consistently and correctly and saves the company both time and money.

When eDiscovery is handled poorly, it can create unnecessary expense and frustration. Thankfully, processes and technology have matured enough to allow every eDiscovery challenge to be solved. These solutions allow complete visibility into the data and the ability to manage it effectively, defensibly and securely. Data beast tamed.