Stephen Del Percio from Arent Fox (and W&M Law Alum– w00t!) presented a talk titled “Current Issues in Green Construction Law: Legislation, Claims, and Contracts”.
At the outset, he noted the importance of involving attorneys in the green building process from the planning stage to reduce litigation. Among his major points were state and local legislation, potential causes of action on green projects, other emerging areas of green legal risk, specific green building claims reported to date, standard of care for design professionals, and America’s first green building litigation: Shaw Development.
Del Percio stressed the importance of state and local governments being more outcome oriented, instead of process oriented. The problems of local government implementing LEED programs into their legislation, because the municipality is not participating in the process of LEED changes, he encouraged municipalities to actually revise and consider legislation before extending existing legislation. Another danger problem with incorporating LEED programs into legislation is the inflexibility of third party rating systems, exemplified by Supreme Court cases where manufacturers have brought antitrust suits against third party rating systems because of their inflexibility in certifying a broader array of products. Boston and Dallas have notably adopted “LEED certifiable” standards to be more accommodating of construction inputs. Ultimately, Del Percio believes legislators need to keep in mind the broader legal ramifications of their policies.
Potential causes of action on green building process include: misrepresentation and fraud, negligence and breach of contract, and negligence per se. Many recent claims in green building have resulted from green building include an architect who overstated its green qualifications, or alternatively from the owner perspective, overstating the benefits of green space to lessees. Oftentimes, these claims resulted in litigation and significant damages. These suits reflect the importance of design professionals conducting thorough due diligence to avoid costly damages in design flaws, overstated expectations, or patent infringement.
Finally, Del Percio emphasized the importance in contracting measures to insulate parties from risk. Shaw Development v. Southern Builders demonstrates the importance of contracting measures, in a case where the contract did not reflect the requirement for obtaining LEED certification and as a result the owner lost a significant amount in tax credits. This case reflects the importance of defining the expectations and requirement of what “green” means to the parties. The avoidance of form contracts will ensure that expectations are clearly articulated and more likely to be met, or if not protects parties from risk and litigation.
In incorporating attorneys from the planning phase of projects, both owners and design professionals can potentially avoid green pitfalls and costly litigation.