WestCon Tribune

SPECIAL MASTERS
WITH JOHN GRIFFITHS AND BILL NAGLE
SPECIAL MASTERS, MEDIATORS
AND WESTCON HONORARY MEMBERS

Those of you who could not make it to the April dinner meeting missed an excellent presentation given by Special Masters John Griffiths and Bill Nagle. In an effort to better understand the roles of Special Masters, Experts and Consultants, Mr. Nagle was kind enough to allow us to reprint the following article.

THE SPECIAL MASTER PROGRAM AND THE ROLE OF CONSULTANTS
By William L. Nagle, Special Master / Mediator

Background:

As an innovative and creative method of responding to the burgeoning complex litigation of the last decade and a half, our local Superior Courts (primarily in Santa Clara and San Mateo Counties) turned to a Special Master Program. The Special Master manages complex litigation through broad powers granted by the Court or stipulated to by the parties. The Special Master concept emanated from the Referee references in Code of Civil Procedure ¤638-¤645 and in the body of law granting Courts the inherent power to control their own affairs.

During the last decade and a half, the Courts have had to deal with extremely expensive and time-consuming complex litigation cases, including complex construction cases. At the same time, the Legislature has created additional pressures on our local Courts with trial court funding and the Trial Delay Reduction Act (Fast Track).

Both the Legislature and the Courts have recognized the need for management of complex cases such as complex construction cases. In enacting the Fast Track litigation, the Legislature promulgated that the Court, not the lawyers, should control the pace of litigation, and mandated that the judges should not only "actively monitor, supervise and control the movement of all cases," but also should "Éestablish procedures for early identification and timely and appropriate handling of cases within the program which may be amenable to settlement or other alternative disposition techniques." Government Code ¤68607.

The Court has recognized the need to use new procedures to deal with complex litigation through its inherent powers to control its own affairs through cases like Cottle v. Superior Court (1992) 3 Cal.App.4th 1367 and Lu v. Superior Court (1997) 55 Cal.App.4th 1264.

The control of complex litigation is the subject of Judicial Administration Standards Rule 19 and newly enacted Rules of Court 1800, et seq. The Federal Court recognizes the Special Master through Rule 53. The Special Master Program is an innovative, creative, and practical method of controlling complex litigation in a cost-effective and timely manner. The Special Master acts as a "traffic controller" who organizes the many lawyers, focuses the issues, resolves the disputes, and recommends Orders to the Court.

Cost-Effectiveness and Flexibility:

The first job of the Special Master is to halt unnecessary expense. This invariably requires a stay on discovery to stop the lawyers from the costly formal exchange of information through traditional means, such as interrogatories and depositions. Instead, information is shared for purposes of settlement in an informal and non-adversarial manner. Status Conferences are held on a regular basis in order to assure that all parties have the same information, and in order to constantly identify issues and keep the case moving toward a resolution. Among other things, the Special Master, through his broad powers, can conduct Status and Settlement Conferences, hear and rule on motions, apportion payment for necessary costs and fees, recommend findings to the Court, and set deadlines for work to be completed. Primarily, the Special Master keeps the parties focused on the case moving toward a swift and cost-effective resolution.

Litigation Before the Special Master Program:

In our first complex construction cases, formal discovery consumed approximately three to four years before anyone even thought about trying to resolve the issues. In early cases, every plaintiff was deposed. Every person that ever stepped on the project was deposed. Pleading battles lasted a year and a half to two years. The paper consumed in propounding and answering interrogatories devastated forests. Our local clerk's offices had difficulty handling the volume of paper and did not have the physical storage room for all of the papers being filed in these cases.

Our local Courts responded with common sense and pragmatism. Before the Legislature ever thought about changing the code sections negating the filing requirements, our local judges, primarily the Honorable Thomas Jenkins, issued an extremely pragmatic and common sense Pre-Trial Order which we now refer to as our first Case Management Order. Among other things, he ordered that discovery be stayed and only authorized through the Court. To cut down on unnecessary pleadings, the Order included deemed pleading provisions. Document depositories were established for the exchange of documents so that everyone had the same information at one source. Plaintiff was required to provide a Statement of Claims (something we used to refer to as a Bill of Particulars). And, consultants were ordered to work together to try to attain a joint scope of repairs, or where they did not agree on issues, scopes in the alternative. These scopes were then bid by contractors who could perform the repair work. In this way, the dollar figures that counsel were using to settle the case with the plaintiffs were real figures that could be used to repair the work and not imaginary "estimate" figures.

New Role of Consultants:

Strong trial judges like the Honorable Thomas Jenkins and the Honorable William Lanam, began using consultants in a new manner at the Courthouse. Before active Court control of complex cases, the experts played an adversarial role at all times. However, with the management of complex cases through the Court, the judges insisted that the consultants try to work together toward the common goal of identifying what problems existed, if any, and the most cost-effective manner of fixing those problems.

Judge Jenkins would often take the consultants in a jury room and tell them that but for the litigation, they would be retained as consultants to use their professional expertise to identify and resolve problems. But for the litigation, they would use their various disciplines together to come up with a consensus of what problems existed and what cost-effective means would be used to fix the problems. He often lectured the consultants to be consultants and not to be lawyers. Similarly, he would lecture the lawyers to be lawyers and not to act as if they were consultants. Judge Jenkins' advice is still solid today. A consultant's role is not to discuss statute of limitations and laches. It is to identify the construction defect, if any, and assist the parties, counsel, and Court in attaining cost-effective ways of dealing with those defects.

There is a time and place in litigation for advocating positions. A consultant is retained by a party and should represent the interests of that party. However, the consultant should never forget that his primary role as consultant and expert in complex litigation is to be a problem-solver and to assist the parties, counsel, and the Court in identifying and solving problems.

Costs:

Costs in complex litigation are prohibitive. Through the Special Master system, the Court tries to control these costs. The clients in the litigation save legal fees because very expensive formal discovery is curtailed, Court appearances are minimal, and information is exchanged in a cooperative manner. Often, the Court deems it appropriate to appoint a Court Consultant and have the Special Master apportion the cost among the parties. The consultant acts as a neutral, impartial expert in coordinating the consultants retained by the parties, and focusing issues, and resolving the ultimate dispute. This also results in a tremendous savings to the client.

Cost savings are achieved through timely and focused management of the case by the Special Master. Information is more rapidly disseminated. Realistic goals and expectations should be set and met. Reasonableness and common sense should prevail. These cases become more costly when information is not cooperatively exchanged and formal discovery is required.

During the last decade, it has been my experience that the consultants in the Bay Area have more often than not worked very well together in cost-effectively identifying and resolving disputes for the clients. There seems to be a certain accountability in the local area which greatly assists the process.

Conclusion:

The Special Master Program is a creative and pragmatic method of controlling and resolving complex litigation, including complex construction litigation. It provides a vehicle for swiftly and cost-effectively identifying and resolving complex issues. It is designed to identify the large cast of participants including parties, counsel, insurance carriers, consultants, et al. It permits the focusing of legal issues and emphasizes reasonableness, common sense, and pragmatism. In construction cases, cooperation among the consultants is essential to the program and provides a basic tenet in concluding these cases in a timely, cost-effective and satisfactory manner.