The Forensic Marketplace 2020 and Beyond... Part 3: Economic Mega-Trends

Introduction

The American Institute of Architects (AIA) hosted their 2009 National Convention this past spring in San Francisco, CA. Nearly 22,000 AIA members attended the 4-day event which included an extensive selection of seminars on specific topics to interest both practitioners and consumers of architectural services alike. Among the seminars personally attended was a 90-minute discussion provided by the Advanced Management Institute for Architecture and Engineering as a review of the mega-trends that are anticipated within our industry along with their expected impacts within the next decade or two. Rather than reframe each of the concepts as presented by Mr. Steven Isaacs, Assoc. AIA on that day, the intent of this series is to offer a personal forecast of how the construction litigation industry may specifically be impacted by these social, technological, economic, political and environmental mega-trends. The expert consultants engaged within this industry will need to address a rapidly evolving architectural and engineering marketplace and must adjust their focus to properly assess the conditions specific to this new marketplace. Given the broad scope and nature of the pending discussion, I have elected to I submit a series of posts on a weekly basis to allow for a more concise presentation of readily digestible content. Each post will focus upon just one of the five total mega-trends to be discussed.

The following is the third installment within a discussion of how the construction litigation industry may specifically be impacted by social, technological, economic, political and environmental mega-trends.

Part 3: Economic Mega-Trends

Cyclical growth, or boom and bust economics will continue to be the roller coaster ride it has always been. However, the aging world-wide population as previously discussed will become the new middle class. This world-wide middle class will then become the target consumer and will seek USA quality products to be combined with local values.

CONSTRUCTION INDUSTRY IMPACT:

Although domestic energy needs are crucial, the USA is expected to place a priority upon the replacement of deteriorated infrastructure. Publicly held mega corporations will be positioned to become the dominant player as the construction industry in general consolidates. Mega corporations are believed capable of funding or owning public or infrastructure projects. Attached to the focus of these mega corporations will be an increased pressure to participate in the global marketplace. The competition and search for the talent and brain power necessary to facilitate their construction projects will become a global pursuit as well. This increased competition for global marketshare will result in higher costs for both human talent and construction materials. From their provisions of labor (brainpower) and raw materials, China and India will continue to flex their economic muscle in the global marketplace.

CONSTRUCTION LITIGATION IMPACT:

While big governments will behave as corporations, big business or mega-corporations will in turn assume the mantle of "city-states" as they commission infrastructure projects. As governments and mega corporations are cast in multiple roles of project owner, financier, and potentially as their own insurer, the process of litigation may be altered in ways difficult to anticipate. Generally speaking, today's insurance carriers currently fund construction litigation investigations and in most instances will ultimately provide the means for retribution or repairs as negotiated or resolved through the court system. It appears the insurance industry, as a component of the mega corporation, will in all likelihood continue to direct a transformed process of construction litigation. However, as the line between parties involved within a dispute and the entities who provide coverage to those parties becomes blurred, or conceivably within a mega corporation, eradicated altogether, the manner by which disputes become resolved is open for speculation.

Within a scenario as described, several questions come to mind. Will a plaintiff, presumably a public organization of some description, have the resources to bring allegations and follow through with an investigation against a mega corporation? Will the mega corporation with all their might have a reduced incentive to resolve disputes when cast in the position of defendant? Consider also the potential for a mega corporation as plaintiff. Could a smaller entity such as a project consultant or construction trade ever be provided with a level playing field?

Victor Dominelli, AIA