Presentation at the 2010 Green Matters Conference in New Orleans, LA, scheduled for Friday, October 15th. Scott Wolfe is co-presenting this topic with Chris Hill, focusing on Litigation caused by or associated with the LEED Certification Process. This is the powerpoint presentation that will be used.
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LEEDigation: The Impact of LEED 3.0, Litigation & Building Regulation
1. LEEDigation
The Impact of LEED on the Practice of Law
Christopher Hill
Scott Wolfe The Law Office of
Wolfe Law Group Christopher G Hill, P.C.
Louisiana | Washington Virginia
wolfelaw.com christopherhill-law.com
constructionlawmonitor.com constructionlawva.com
LEED AP LEED AP
5. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated
6. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated
• Schedule: Completion took longer than
planned
7. Unmet Expectations
• Cost: The project cost more than expected
• Scope: The project’s scope was more
expansive than anticipated
• Schedule: Completion took longer than
planned
• Quality: The workmanship quality was
inferior to expectations.
12. What is Green Building?
also known as green construction or sustainable
building, is the practice of creating structures and
using processes that are environmentally
responsible and resource-efficient throughout a
building's life-cycle: from siting to design,
construction, operation, maintenance, renovation,
and deconstruction. This practice expands and
complements the classical building design
concerns of economy, utility, durability, and
comfort.
http://en.wikipedia.org/wiki/Green_building
15. Law Ark Building Blog
“ The bad news is that attorneys, especially those already
practicing in construction law, will soon realize that aside
from green design and construction’s sometimes
specialized and occasionally ill-defined vernacular, there’s
no real novelty in the types of claims that might arise.
No new frontiers of jurisprudence need be explored–a
leaky green roof is still a leaky roof–whether it also
requires regular mowing and landscape maintenance
changes little from a legal perspective.
http://www.lawarkbuilding.com/?p=104
16. Best Practices Construction Blog
“ Cole may be right that there is no novelty to the
traditional types of claims (contract, tort, statutory, etc.)
that may arise in green construction disputes.
However, the novelty in the green building industry is the
new set of standards that will inevitably become part of
the legal dispute. In other words, while “a leaky green
roof is still a leaky roof” … there will be new risks to be
allocated, different types of damages lost, additional
players involved, varied proof required and, yes, perhaps a
novel cause of action alleged because that leaky green
roof system failed.
http://bit.ly/diszmS
18. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?
19. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?
• Rating: Did the building achieve the planned
LEED rating or other certification?
20. Still...
Unmet Expectations
• Energy Performance: Is the building’s energy
systems performing as expected (or
promised)?
• Rating: Did the building achieve the planned
LEED rating or other certification?
• Long-Term Sustainability: What is the
project’s impact on the environment, and is
this as expected?
22. “
Green Growth is phenomenal
across the globe.
Harvey M. Bernstein, McGraw-Hill Construction
23. 2005 - 2008
Green Building Construction
Grows 5x ($10b to $49b)
2009 - 2013
Could Triple, reaching $140b
Green Outlook 2009: McGraw-Hill Trends Driving Change Report
26. Shaw Development v. Southern Builders
• Problem: Contract required building to
meet Silver Certification. It didn’t.
27. Shaw Development v. Southern Builders
• Problem: Contract required building to
meet Silver Certification. It didn’t.
• Whose Fault?: Developer sued builder, but
there was no clear allocation in contract of
who was responsible for certification
28. Shaw Development v. Southern Builders
• Problem: Contract required building to
meet Silver Certification. It didn’t.
• Whose Fault?: Developer sued builder, but
there was no clear allocation in contract of
who was responsible for certification
• Damages: $700k+ in lost tax credits
29. Shaw Development v. Southern Builders
• Problem: Contract required building to
meet Silver Certification. It didn’t.
• Whose Fault?: Developer sued builder, but
there was no clear allocation in contract of
who was responsible for certification
• Damages: $700k+ in lost tax credits
• Result: Unknown - Settled.
31. Washington DC v. Washington Nationals
• Problem: Expectations for “Green” LED
Scoreboard wasn’t met. Owner claimed
project wasn’t substantially complete and
withheld funds.
32. Washington DC v. Washington Nationals
• Problem: Expectations for “Green” LED
Scoreboard wasn’t met. Owner claimed
project wasn’t substantially complete and
withheld funds.
• Damages: Not too clear in settlement
materials released, but $3.5 Million was
withheld based in large part on the
scoreboard dispute.
33. Washington DC v. Washington Nationals
• Problem: Expectations for “Green” LED
Scoreboard wasn’t met. Owner claimed
project wasn’t substantially complete and
withheld funds.
• Damages: Not too clear in settlement
materials released, but $3.5 Million was
withheld based in large part on the
scoreboard dispute.
• Result: Unknown - Settled.
36. Show Me The Money!
• Tax Credits: Missing a certificate level can
effect tax credit eligibility
37. Show Me The Money!
• Tax Credits: Missing a certificate level can
effect tax credit eligibility
• Energy Efficiency: If property is not as
energy efficient as promised, damages can
include increased energy costs
39. Unique Damage Situations
• Missing Certification: If a property expects
to have Gold certification, but only gets
Silver, and this doesn’t have any tax credit
implications...what are the damages?
40. Unique Damage Situations
• Missing Certification: If a property expects
to have Gold certification, but only gets
Silver, and this doesn’t have any tax credit
implications...what are the damages?
• Goodwill: How will courts calculate loss of
good will if green construction misses
expectations.
42. Unique Liability Situations
• LEED Responsibility Allocation:
Responsibility for LEED points is distributed
between architect, owner and contractor. If
energy efficiency is not as expected, how do
you assign liability?
43. Unique Liability Situations
• LEED Responsibility Allocation:
Responsibility for LEED points is distributed
between architect, owner and contractor. If
energy efficiency is not as expected, how do
you assign liability?
• Energy Efficiency: Energy efficiency of a
building relies on factors: (i) climate; (ii)
property placement; (iii) property use; (iv)
etc. How do you clearly blame a party for
inefficiencies.
46. Preparing for the Risk
• Control
Expectations
• Limit Exposure
By Contract
47. Preparing for the Risk
• Control
Expectations
• Limit Exposure
By Contract
• Be Careful, and
Keep It Simple
48. Control Expectations
“ ...Expect the unexpected. Always
sounds like good advice.
Except, of course, if you are
expecting the unexpected, then well
then it really isn't really unexpected
anymore. Is it? And that leaves you
vulnerable to the truly unexpected.
Because, you're not expecting it.
51. Control Expectations
• Clear terms identifying scope of work
• Clear terms in Subcontracts
52. Control Expectations
• Clear terms identifying scope of work
• Clear terms in Subcontracts
• Very specific specifications, making them as
independent from specific certifications as
possible
53. Control Expectations
• Clear terms identifying scope of work
• Clear terms in Subcontracts
• Very specific specifications, making them as
independent from specific certifications as
possible
• Get team together ahead of time (BIM,
Charette)
54. Shaw Development
v. Southern Builders
Contract required “Silver LEED Certification,”
but lacked clear specifications.
Two lessons:
- Builder’s obligation to achieve certification and
build to specs must be aligned;
- Certification is not a guarantee, and architects /
builders should be weary of promising a
certification.
56. Limit Risk in Contract
• Avoid warranties of long term energy
performance
57. Limit Risk in Contract
• Avoid warranties of long term energy
performance
• Set performance expectations at time
building complete, not some time in future
58. Limit Risk in Contract
• Avoid warranties of long term energy
performance
• Set performance expectations at time
building complete, not some time in future
• Clearly allocate responsibilities between
owner, builder and architect
59. Limit Risk in Contract
• Avoid warranties of long term energy
performance
• Set performance expectations at time
building complete, not some time in future
• Clearly allocate responsibilities between
owner, builder and architect
• Get LEED AP to consult
60. Things That Affect A Building’s
Energy Performance
A building’s energy performance can be a very
complex matter, affected by things out of the
builder / architect’s control:
- Climate
- Use and Users of Building
- Third Party Interference
61. Allocate Responsibility
The LEED Program allocates responsibility for
points between the Owner, Builder and
Architect.
It is an error to not allocate responsibility for
green building design and construction when
contracting.
64. Non-Contractual Actions
• Check and Double Check Subcontractors’
and Consultants’ Credentials
• Be Careful with Advertising. Keep it Simple
and Don’t Greenwash.
65. Non-Contractual Actions
• Check and Double Check Subcontractors’
and Consultants’ Credentials
• Be Careful with Advertising. Keep it Simple
and Don’t Greenwash.
• Require Communication in Contract
66. Non-Contractual Actions
• Check and Double Check Subcontractors’
and Consultants’ Credentials
• Be Careful with Advertising. Keep it Simple
and Don’t Greenwash.
• Require Communication in Contract
• Consider Green Building Insurance
67. What is Green Washing?
Greenwashing (green whitewash) is the practice
of companies disingenuously spinning their
products and policies as environmentally friendly,
such as by presenting cost cuts as reductions in
use of resources. It is a deceptive use of green PR
or green marketing. The term green sheen has
similarly been used to describe organizations that
attempt to show that they are adopting practices
beneficial to the environment
http://en.wikipedia.org/wiki/Greenwash
68. Novel Insurance Products
• Green Washing Insurance
• Green Certification Insurance
• Heightened Risk caused by certain green
building practices like Vegetative Roofing,
Alternative Energy Generational Systems, etc.
69.
70. LEEDigation
The Impact of LEED on the Practice of Law
Scott Wolfe Christopher Hill
Wolfe Law Group The Law Office of
Louisiana | Washington Christopher G Hill, P.C.
wolfelaw.com Virginia
constructionlawmonitor.com christopherhill-law.com
LEED AP constructionlawva.com
LEED AP
Notes de l'éditeur
Introduction
Before talking about the specific (green building litigation), it’s important to get a grasp on general construction litigation...and what causes this type of litigation.
Generally, litigation arises because of unfulfilled expectations.
Generally, litigation arises because of unfulfilled expectations.
Generally, litigation arises because of unfulfilled expectations.
Generally, litigation arises because of unfulfilled expectations.
Before specifying what causes green building litigation and how to prevent it, an overview of just what green building is could be prudent. The presentation title focuses on LEED, but we should try to keep discussion broad to encompass green building in general.
From the LEED website, defining LEED
A “competitor” of the LEED Certification Process
EPA’s Energy Star Ratings and Standards
A basic definition for “green building”
What exactly is LEEDigation, and how is it different from ordinary litigation?
Introduction
This debate between Gary Cole and Matt DeVries really underscores the point of our presentation, and that is, how does green building issues bring anything unique to the practice of law and the world of litigation. How? It provides attorneys and clients with new risks to be allocated and managed. It presents unique “damages” situations. It adds new parties to the fold, and the like.
Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
Generally, litigation arises because of unfulfilled expectations. The same thing for LEED or other green building projects...its just different expectations.
Is all this hypothetical, or is it probable to happen? The next slides take a look at some figures about the growth of green building. There’s no reason to believe that green building disputes will be “immune” to litigation.
How are these green building cases going to be resolved? Unfortunately, no one really knows right now.
These green building cases present unique damages issues.
How Do You Prepare for these green building vulnerabilities?
How Do You Prepare for these green building vulnerabilities?
How Do You Prepare for these green building vulnerabilities?
A basic definition for “green washing”
A basic definition for “green washing”
A basic definition for “green washing”