All construction lawyers are aware of pass-through claims, which arise when a subcontractor suffers impacts—such as delay damages, disruption, or extra work—caused by the owner, and the prime presents the subcontractor’s claim (along with its own) to the owner. But many construction lawyers struggle with the practical aspects of bringing them, and the important setup which can be critical in resolving them.
This panel will address the foundational legal issues, the more advanced and nuanced practical and legal considerations, and the contract provisions (both in the subcontract and in a liquidating agreement) that can streamline these claims and promote resolution.
Key legal Issues include prime contract entitlement (and the Severin Doctrine) and whether Subcontract defenses (i.e.: no damages for delay or other waivers) are available to the owner. Key practical considerations include claim validity and factual entitlement, cooperation between claimaing parties (and the consequences of no cooperation), and the allocation of costs and settlement proceeds.
Best-practice subcontract and liquidating agreement provisions address sponsorship and cost allocation, information and documentation obligations, liability limitation and recovery-based payment, settlement authority and amount, cost allocation, and defenses to counterclaims by the owner.
