Since March of 1999, many cases involving construction schedule delay claims have also likely involved Kumho Tire challenges or arguments. That month, the United States Supreme Court decided Kumho Tire Co., Ltd. V. Carmichael, 526 US 137 (1999) and expanded the gatekeeper role of the trial court in allowing or rejecting expert testimony. Previously, science cases and product liability cases invited the Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 US 579 (1993) challenge to an expert’s scientific methodology and bases for opinion. While some cases attempt to expand Daubert to non-scientific experts, the decision was considered fairly limited. Kumho provides a new weapon to challenge a construction claims expert’s methodology.
CONSTRUCTION CLAIMS EXPERTS | TOTAL COST CLAIMS | TOTAL TIME CLAIMS
In Kumho, the plaintiff’s expert was a qualified tire-failure engineering analyst who utilized a “visual-inspection method” in concluding that a tire blowout was due to a defect in the tire. The District Court, and ultimately the Supreme Court, found this method unreliable and without scientific basis. Neither Court found that the expert could reliably determine the cause of the tire’s separation. The Court noted that the methodology was not widely used nor did any articles validate the methodology. The Courts found that the expert’s opinion was too subjective and unreliable, and would not allow the jury to consider it.
Applying “Kumho” to Construction Disputes
The application of Kumho to construction schedule delay and damages analysis could spell the end of total time claims and total cost claims. With the stakes being raised by the Supreme Court, claimants should not be comfortable submitting a claim that does not appropriately identify cause and effect. Likewise, use of the impacted as-planned method, which has been roundly criticized in journals and texts, could jeopardize the value of a claim.
While the generally rejected and simplistic schedule delay analysis methodologies would be suspect, merely labeling an analysis as “but for”, or collapsed as-built, or time-impact, may not end the inquiry. The methodology must be applied correctly. Each delay analysis requires varying levels of subjectivity that introduce varying levels of reliability. In the past, it was considered sufficient if the expert could state the conclusion to a reasonable degree of certainty. However, with the enhanced gatekeeper function of a trial judge [and arbitrators], the proponent of an opinion also needs to defend the methodology and underlying assumptions.
Kumho’s Four Key Elements
Four of the fundamental factors related to reliability are:
1. Has the expert’s theory has been tested?
2. Has the expert’s theory has been subjected to publication and peer review?
3. What is the known or potential rate of error?, and
4. Is there general acceptance of the expert’s theory among the relevant community?
While none of these factors alone resolve the question of reliability, these factors do provide the framework in which the courts can perform their gatekeeper function.
Treatises, articles, presentations and other publications become increasingly important. While not dispositive of the validity of the methodology in a particular case, negative commentary on a methodology can be devastating. The fact that total cost and time claims are nearly universally rejected by triers-of-fact is very persuasive. Commentary on the As-built But-for, or Collapsed As Built methodology, can also weaken those claims if a more accepted method was available.
Owners and contractors evaluating claims and defenses need to be cognizant of the Kumho effect, especially if the project is still in process. When the scheduling or claims consultant is hired, that consultant must establish sufficient data collection procedures to enable application of the most reliable methodology for that particular project. The immediate impact may be to increase the overall cost of preparing or defending a claim, but the overall benefit to either the prosecution or defense of a time or cost claim will be inestimable.
Although now heavily edited for the web, this article was first published in Holloway Consulting’s E-m@il Construction Reporter newsletter in 2001 and co-authured by:
John M. Sier
Kitch Drutchas Wagner DeNardis & Valitutti P.C.
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