Speed Costs Money: How Fast Do You Want to Go in Industrial Litigation?
Industrial litigation costs can be reduced by applying project management discipline and integrating technical expertise early in the process. Clear scope, strong communication, and focused data analysis help accelerate resolution and avoid unnecessary expense.
Key takeaways
- Effective project management principles can reduce both litigation cost and time to resolution.
- Integrating technical experts with legal teams improves efficiency and reduces rework.
- Poor scope definition and lack of oversight can significantly increase litigation costs.
- Early identification of relevant data helps avoid delays and unnecessary expert analysis.
- Fast, well-supported technical conclusions can lead to quicker and more favorable outcomes.
“Speed costs money – how fast do you want to go?” is a famous saying in the drag racing and hot-rodding community. It is recognized as a theoretical statement linking increased performance with increased cost. Experienced drivers, top-notch crew and the best equipment all contribute to success on the track. But costs generally escalate as teams push for the fastest, most innovative machines.
In industrial litigation, the opposite may be true. Efficient execution of a lawsuit following successful project management principles can significantly reduce both cost and time to resolution. Key factors include:
- Defining a clear scope of work
- Establishing a schedule with milestones
- Setting concrete objectives
- Maintaining excellent communication
- Integrating the right team of legal and technical experts
A lawsuit requires owner oversight like any large capital project. This is because the financial and operational impact of a major accident and resulting litigation can rival that scale. We have observed cases where the owner’s law firm is well organized, but the opposing law firm is content to move slowly, which significantly increases cost.
This work typically involves accidents, injuries, equipment failures, product quality issues, and other refinery or petrochemical plant matters that require understanding complex technical details. It is critical that the plant assign personnel familiar with the incident to be integrated into the legal team. This facilitates rapid data transfer and resolution of open issues.
Lawsuits are extraordinarily expensive, with high legal rates and timelines that can drag on for months or even years. The number-one rule in minimizing litigation cost is to avoid a lawsuit altogether. This can be accomplished through high standards for projects and equipment, disciplined oversight during project execution and commissioning, and employees who are well versed in procedures and safety requirements.
Despite these safeguards, your company may still face the unpleasant experience of being sued. In many cases we support, the owner has not properly defined scope, budget, work direction or oversight. Significant capital project are sometimes tossed over to contractors with limited direction from clients: “Build us a plant; we will touch base in two years.” We find the same problem in lawsuits related to accidents, equipment deficiencies and other issues. The problem is turned over to a law firm without clear direction or technical integration. In both cases, the result is a high-cost disaster, a plant that does not meet expectations or an unfavorable judgement.
How technical integration reduces litigation cost
We often see a disjointed or compartmentalized approach to legal work, including:
- Limited involvement from plant or corporate engineers who are closest to the facts surrounding the incident
- Delays in reviewing incident reports and gathering key documents needed to support the case
- Inefficiencies in developing conclusions due to lack of coordination between technical and legal teams
- Increased legal fees driven by poor integration and rework across the team
Owner’s engineers understand complex systems and should be integrated into the legal team. The assigned engineer must communicate effectively, understand the incident in detail and maintain credibility with legal counsel. This level of integration is standard in turnarounds and capital projects, yet it is rarely applied in litigation.
When we are engaged as experts, we need “just the facts, Ma’am,” as Sergeant Joe Friday famously said in Dragnet. But in many cases, we receive gigabytes of irrelevant data and are expected to find the needle in the haystack. Thousands of pages of contract documents describing feedstock purchases are not helpful when looking at a piping failure. Again, support from an owner’s engineer integrated into the legal team can improve efficiency, eliminate unnecessary high-cost expert hours and help reach conclusions quickly. Our new slogan becomes “Speed saves money – how fast do you want to go?”
The wheels of justice can turn slowly. For example, there will be delays while discovery documents are assembled. It is important that the expert witnesses as well as the owner’s engineer contribute to defining required documents early in the process, which can prevent a lot of recycle while expert reports are being prepared. Rework and missing documents slow down the process and cost hours at a premium rate.
Example where delays and poor decisions increased cost
One case illustrates how litigation costs can escalate without the right expertise on the owner’s legal team, followed by an arbitration with limited chance for success.
Gulf Coast heat recovery project
We partnered with a highly respected construction cost analysis and litigation firm on a dispute involving a Gulf Coast project. The plant was estimated at $65 million but had completed at $110 million. The owner believed they had been overcharged and pursued recovery. However, engineering and construction had been contracted separately, and the owner procured major equipment directly. This project experienced engineering delays, late equipment delivery and weak construction oversight. The project manager lacked experience with large-scale facilities, and the owner’s team did not have the required expertise. After detailed analysis, we advised that recovery was unlikely and recommended ending the claim. The owner proceeded with litigation anyway and was unsuccessful, incurring millions in legal fees and arbitration costs.
Examples where speed reduced cost and improved outcomes
These case histories illustrate how the right expert witness and approach can reduce cost and increase the probability of a favorable outcome.
Fatal dryer explosion
A two-person team investigated a fatal explosion involving chemical drying. We identified that incorrect equipment had been selected and subsequently failed during initial use. Supporting documentation showed that the chosen process presented a high likelihood of failure. A review of historical data would have identified this risk. Speed, accuracy and expertise quickly zeroed in on key aspects of the case, resulting in a favorable outcome.
Violation of life-critical procedures
A three-person team was engaged in a case involving an explosion and injuries to two contract employees. After reviewing the circumstances of the accident, including a site visit and analysis of plant procedures and accident reports, we immediately determined that the contract employees had violated two life-critical procedures. Our in-depth knowledge of plant operations and industry safety standards supported rapid resolution, and the lawsuit was dropped.
Code and forensic analysis of fire damage
Our engineers served as experts on an insurance dispute following a fire at a plant in the Gulf Coast. Several insurance companies proposed reusing multiple damaged vessels without complete inspection or repair. The team’s forensic analysis determined that replacement of some vessels and detailed inspection of others would be required. The resulting settlement exceeded the initial proposal by $500 million. The analysis was completed efficiently and supported a defensible outcome.
Timeline evaluation of alleged exposure
An engineer served as an expert witness in a case involving an asbestos-related death. The family of a deceased employee claimed that he had contracted mesothelioma from asbestos exposure at a specific plant. We evaluated autopsy reports, an employment timeline and potential asbestos exposure at other plants. We concluded that the individual was not present during relevant construction or operation phases, and that he had left the company prior to any insulation work on the plant. The case was immediately dismissed, thus eliminating continuing litigation and a jury trial.
Example where schedule pressure led to major losses
Finally, this case is a well-known example of the consequences of exceeding safe operating limits under schedule pressure.
Collapse of the “Big Blue” crane during stadium construction
In 1999, during construction of the new Milwaukee Brewers stadium, a critical lift was being performed using the Lamson “Big Blue” crane to install sections of the retractable roof, each weighing approximately 400 tons and comparable in size to a commercial aircraft. The crane normally operated under wind speed limitations, but lift-specific calculations were not performed that would have established even lower allowable limits.
During a late-afternoon lift driven by schedule demands, a wind gust reached approximately 26 MPH, causing the crane to collapse. The incident resulted in approximately $100 million in damage and three fatalities. The subsequent trial led to a $99 million award, largely assigned to the construction contractor. At the same time, a major pressure vessel lift involving another “Big Blue” crane in Texas was delayed several months to assure all aspects of the Milwaukee collapse had been evaluated.
Litigation support that controls cost and improves outcomes
Becht provides litigation support and expert witness services backed by over 1,000 experienced professionals across refining, petrochemical, power, and related industries. Our teams bring decades of field experience and technical knowledge to cases involving accidents, equipment failures, fire damage, crane incidents, patent disputes, tax matters and operational issues. We have reached many successful outcomes at reasonable cost due to the level of expertise of our personnel.
If you need expert advice for a legal case, please reach out to Rick Hoffman, Becht’s Manager of Litigation and Due Diligence Services, by filling out this form or calling +1 970-389-9950.
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