Better managed construction disputes through optimised information management

The amount of information to be collected, organized, assimilated and communicated can quickly take on overwhelming proportions in construction disputes. Plans and specifications, bids, contracts, amendments, disclosures, timelines, minutes, reports, requests and notices of changes, pictures and correspondence: those are the many documents emanating from a work site that will shed light on the ins and outs for the parties, their lawyers and potential decision-makers.

What do you need to know about contractors’ obligations in managing this documentation and, even more importantly, how should you go about it?

The parties to a dispute, existing or merely anticipated, have a legal obligation to preserve the relevant evidence, regardless of its form¹. They also have an obligation to communicate such information, where appropriate and subject to the justification of certain grounds² or privileges to be exempted from doing so. This communication must be orderly, so that the relationship between the information conveyed and the requests is consistent. Sending information “in bulk”, interspersed with information that is not relevant to the requests made, is a practice that is discouraged by the courts, which are increasingly ordering that the information be cleaned up or even going so far as to impose costs.

This places a positive obligation on contractors, both plaintiffs and defendants, to preserve, gather and communicate the masses of information emanating from their work sites. If information is not managed properly, this burden can quickly become overwhelming and costly, resulting in human resources being tied up, multiple interlocutory applications and procedural delays.

This management must be considered with greater importance by contractors acting as plaintiffs, who generally bear the burden of proof. It is up to them to determine the extent of the damages they incurred, as well as their attribution to each of the causes and to each of the stakeholders. To discharge this burden of proof and optimize the chances of success, contractors should be careful to maintain detailed documents regarding the use of workers, equipment and materials on the work site as well as records detailing the work performed each day and the rate of production. Proof of additional disbursements to a supplier should, for example, be supported by each purchase order, invoice and proof of payment. The best proof lies in this raw data and not on the basis of subsequent estimates, which may even be inadmissible as evidence.

Information management processes should systematically be part of the best practices of construction contractors. Here are some suggestions:

• Centralize information: Gathering and centralizing the mass of information is the most basic and effective management measure. Without these steps, the burden of document inventory greatly increases since the search process must be repeated over several platforms: local recordings on several computers, servers, external memories, paper copies. Information has to be extracted from these silos and introduced into a data repository equipped with a standardized, pragmatic information categorization structure. Poorly classified information is often lost information.
• Keep copies: Centralizing information does not eliminate the need to protect against damage. While servers are generally designed to maintain data even in the event of a breakdown, local backups or external memories could be destroyed. Therefore, depending on the type of storage used, it is therefore necessary to provide for a recurring copy procedure. The loss of evidence cannot always justify the presentation of secondary evidence, which could result in the failure of a dispute.
• Provide consistent headings: Naming documents and correspondence in an intelligible and intuitive manner, according to a standardized convention, enables efficient searching and prevents relevant documents from being overlooked when performing a keyword search. For example, we recommend starting headings with a date using the YYYY-MM-DD format, which allows documents to be put in chronological order in one click. Often overlooked, this aspect of information classification is one of the highest cost-benefit ratios when it comes to subsequent management, whether or not data processing software is used.
• Provide cost codes: Associate a unique cost accounting code for all additional expenses associated with a project. It is then easier to manage and prove quantum, which is often a thorny matter in a litigious context.
• Computerize your processes: Data generated in digital format has much more underlying information about its context: who, what, where, when and how. Subsequent management is greatly simplified as information such as the author of the document, the time of its creation, its versions and amendments can be easily be identified. Computerization also reduces losses.
• Publish a policy and appoint a contact person: A chain is only as strong as its weakest link. It is therefore important that all the stakeholders through whom the information passes are informed of the information management processes in place. A single resource person can ensure diligent management of information where a multitude of stakeholders could, on the contrary, compromise its integrity through a lack of standardization or rigour.

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This work may seem tedious upstream, but in reality, it represents only a fraction of the time generally required downstream to manage information in the event of litigation. Implementing efficient information management processes should not be seen as a financial and human expense in managing construction sites, but rather as a guarantee of potential mass savings and, what’s more, a better chance of success in the outcome of a dispute.

In the end, we must avoid believing that these measures should only be implemented in the context of major construction projects. In fact, it is actually the opposite. It is more often in disputes of limited size that there is a disproportionate amount of time wasted tracking down information in relation to the monetary stakes involved.