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Complex Commercial Litigation
Butler Williams & Skilling Blog
Complex Commercial Litigation
Light Pole Failures At Athletic Fields Create Potential Legal Problems
Large light poles line the athletic fields of many American parks and schools. Without light poles the term "night game" would not exist. However, within the last few years many light poles manufactured by one company in particular seem to have shown signs of compromise and in some cases have failed altogether. The danger posed is evident. A light pole is huge and heavy structure. They can be as high as 100 feet or more and are constructed from heavy steel weighing tons. When one of these behemoths crashes to the earth below, it is easy to envision the potential for extensive damage to property and person.
The risk of a light pole failing should be minimal. Reasonable steps should be taken throughout the design, fabrication, and installation process to ensure that light poles remain safe and usable for the duration of their expected service life. However, according to an April 26th article in the Austin American Statesmen, at least with respect one former light pole manufacturer, it appears there may have been a breakdown in the design process. Per the article, light poles manufactured early this decade by a single, now bankrupt, company have been falling or at least cracking at an alarming rate. The root cause of the problem appears to have been a flawed calculation used to design the poles.
The article does not speak to any current lawsuits and instead points out that because the company is bankrupt, property owners have been forced to shoulder replacement and remediation costs. Nevertheless, the liability which could result from a catastrophic failure of a light pole is not difficult to see. Depending on how and when a light pole fails designers, manufacturers, suppliers, installer, owners, and insurers could all potentially find themselves defending a lawsuit.
Another Richmond Company Files for Bankruptcy
Like so many other towns and cities across the nation, the Richmond area has been hard hit by the weakened economy. Several Richmond corporate institutions have fallen prey to the softened business environment. Companies like Land America and Circuit City who once employed thousands of Richmonders have sought bankruptcy protection or have been forced to liquidate and disappear entirely. Unfortunately, this week we learned of yet another national company headquartered in Richmond which has been now forced to file for bankruptcy. National discount men’s clothier S&K has filed for Chapter 11 protection.
As the economy tightens and credit becomes more and more difficult to come by, a natural by-product will be difficulties for certain brands. According to February 9th Richmond Times Dispatch article, whether or not S&K owes its current predicament to its own failings or simple bad luck, remains uncertain. What appears more certain is that the company looks to need substantial operational changes in order to be profitable. Still more obvious is that the majority of the company’s creditors will now have to proceed before the federal bankruptcy court in Richmond if they hope to recoup monies owed them.
Renovation Cannot Come Quickly Enough for Richmond Landmark
Like so many other urban areas across the country, Richmond, Virginia’s downtown has seen something of renaissance in recent years. The economic slowdown notwithstanding, numerous old buildings in and around the city center have been renovated and repurposed into retail space, offices, and high end apartments and condominiums. One property that seems a perfect fit for revitalization is the old Hotel John Marshall . Built in 1929, the John Marshall was once a grand luxury hotel, but those days have since passed. In 1988, the hotel closed for over ten years and was reopened in a limited capacity in 1999. The building has been largely vacant since the hotel finally shut its doors in 2004.
In the last few years several different developers have unveiled plans for redevelopment, but construction has yet to begin. For a myriad of reasons these projects have failed to get off the ground and the building remains essentially unused. It seems there may now be an additional impetus to get the property back in use; decay. As reported on by the Richmond Times-Dispatch, on December 30-31 several massive limestone panels fell off the façade of the building crashing over 100 feet to the ground and structures below. Fortunately, no one was hurt and the authorities acted promptly to make sure the public stayed out of danger. The incident highlights the need for development of the property and others like it. We all recognize that when buildings go unattended and are allowed to fall into disrepair, surrounding property values decline. However, an often overlooked risk is the danger of a major accident due to decay. Crumbling buildings present both a danger to the public and a potential source of liability to an owner.
Non-Solicitation Agreement During Merger Talks May Be Useless
When firms enter into merger discussions, the smaller firm may wish to protect itself with a non-solicitation agreement to prevent the larger firm from using the merger negotiation as a pretext for poaching members of the smaller firm. In a case arising from a failed law firm merger, a New York judge ruled last week that non-solicitation agreements, though common, are unenforceable because they restrict the right of lawyers to work where they want. Judge Kenneth Fisher ruled that a non-solicitation agreement entered into in 2007 between legal behemouth, Nixon Peabody and a smaller law firm, Taylor Wessing, was unenforceable. The two firms agreed not to hire from each other for two years. After the merger negotiations collapsed, Nixon Peabody hired a dozen Taylor Wessing partners.With Rough Economy Comes Increase In Construction Litigation
As the credit markets tighten and the economy seemingly grinds to a halt, a corresponding uptick in construction litigation has resulted. For the first half of this decade ambitious builders and developers experienced something of a golden age. While large scale construction inevitably leads to disagreement and disputes, during this “boom” period those involved understood that delaying a project due to litigation worked to no one’s benefit. Now, however, as those involved with a project face an uncertain future, we find that construction disputes more and more often make it all the way court.
In the past, parties to a construction lawsuit could typically assume a settlement would be reached prior to trial, but the economic downturn has drastically altered the equation. When the prospect of settlement no longer represents a realistic or profitable option, litigation necessarily emerges. A recent article published in the Virginia Lawyers Weekly describes several construction lawsuit scenarios which in the past would likely have settled. Such situations include;
-Defective Construction
-Construction Delays
-Foreclosure
Certainly, there are other reasons for a construction lawsuit, especially breach of contract for nonpayment. However, that type of suit might find its way into court even under the best economic conditions.
Legal Fees: Billable Hours is Not the Only Option
At Butler Williams & Skilling, we recognize that our entrepreneurial clients are looking for a law firm that is willing to share some of the risks of commercial litigation. Indeed, our willingness to handle a commercial litigation matter on a contigent fee, fixed fee, or blended contingent/hourly fee basis often affords the best opportunity to our clients to have their dispute litigated by a top-notch law firm. According to the Washington Post, the current economic crisis is causing businesses, in-house counsel, and individuals to demand the same alternatives to the old billable hour structure for legal fees, including for commercial litigation matters.
Corporate legal department officials say fees to outside law firms have risen faster than energy costs, salaries and other expenditures. Hourly billing has been the subject of criticism by clients and debates by legal experts, who say they give lawyers incentive to work inefficiently. Most law firms have been slow to embrace alternative billing.
The current crisis may force those firms to change.
New efforts to jettison hourly billing are being driven by in-house corporate lawyers, who say they have grown frustrated seeing fees to outside firms soar even as they slash their own costs. They said they want more certainty in their legal budgets and worry that outside firms are spending unnecessary amounts of time on their matters.
In a recent survey conducted by the Arlington-based Corporate Executive Board, a for-profit organization that does research on best practices, 800 in-house lawyers said they spent 50 percent more last year on large outside law firms than in 2002. They said the hourly rates they paid jumped 70 percent between 1996 and 2005. Those increases obviously cannot continue in the current market.
The Association of Corporate Counsel, which represents 23,000 in-house corporate lawyers, last month launched the "Value Challenge," an initiative aimed at spurring corporate lawyers and outside law firms to develop alternative pricing plans, including fixed rates, volume discounts and lower hourly rates blended with performance bonuses or a contingency fee component.
Most people who purchase a service want to know, "how much is this going to cost?" In the past, the answer from those selling a legal service has been "x dollars an hour for how ever many hours we work on your case, regardless of whether the result is favorable to you." This paradigm is no longer acceptable to many clients. They would prefer their lawyer to either quote a fixed rate or take some of the risk, when appropriate, by taking as their fee a percentage of the recovery.
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