Howard Rosen serves as a partner in the construction law group at Peckar & Abramson. In this role, he represents construction companies and developers in private project transactions and disputes. He also has extensive experience litigating claims for public construction contractors in various courts and alternative dispute forums. Howard has been involved in numerous complex arbitrations, representing both claimants and respondents. He has also been successful in using mediation to achieve favourable settlements for clients in matters involving deficient design and defective construction claims arising from high-rise condominiums and commercial buildings.
What do you enjoy most about working the construction sector?
Like most construction lawyers, I enjoy dealing with a tangible product. By this I mean a construction project that can be viewed and visited, and is the culmination of the efforts of different teams of people. (This is in contrast to lawyering about financial instruments, for example.) I also enjoy the challenge of dealing with the legal issues that result from the complexity of a construction project, both the technical issues and the transactional relationships among the numerous parties to each construction project.
What are the most common sources of construction disputes and how do you think clients can minimise the risks of them occurring?
When you come down to it, most construction disputes involve absorbing or deflecting the cost impact of financial risks that were either: not understood or simply ignored at the time of contracting; or reflect an imbalance in negotiating leverage. Clients can try to resist assuming unreasonable risks, or to shift risk to the more appropriate parties. Clients can also try to include larger contingencies within their prices and be proactive in addressing potential problems arising during the project.
What are the main challenges in convincing clients to pursue methods of alternative dispute resolution?
The main challenge in convincing clients to pursue methods of alternative dispute resolution, such as mediation and arbitration, is their perception of the alternative as better. This may depend on whether the client is convinced of the strength of his or her contract if litigated in court. We usually do not have a problem in convincing clients to engage in mediation given its advantages even if the matter is not settled; the mediation often better illuminates the issues that must be resolved in any binding dispute process that may follow.
Which factors are important when negotiating licence agreements pertaining to adjoining building issues and why?
One important factor when negotiating licence agreements is having an early understanding from the developer-client as to what “support of excavation” and protection measures will be necessary, and whether there are other alternatives in the event that the adjoining owners are being difficult. Second, it is important to start the negotiating process early, so that your client is not faced with an upcoming closing of financing that depends on having the licence agreements in place and leaves no time to obtain judicial relief.
What is driving the building boom in New York and how do you see this developing in the near future?
My impression is that the building boom in New York City is being driven by several factors. First, foreign investments that support development of high-rise luxury condominiums. Second, the increase in the number of millennials who wish to live and even start their families in the city (in contrast to moving to the suburbs). Third, public-sector investment in infrastructure in the NYC area, with an emphasis on airports, bridges and subways. This of course, is linked to the population growth and the need for upgrading commercial space. A prime example is the Hudson Yards Development, which could not have occurred without the MTA’s extension of the subway’s 7 line. Without further improvement of infrastructure, the building boom will eventually reach the point of saturation.
How do you see the construction industry in New York benefitting from the increasing interest from international investors?
My impression is that the construction industry of New York benefits from international investors in the high-rise luxury condominium sector. The countries that are supporting that sector have changed over time, from the Irish buyers in the 1990s-2000s to Chinese buyers now. New York City is still perceived as a safe haven for real estate investment, particularly under the current laws.
Looking back over your career, what is the most memorable case you have worked on?
The most memorable case I worked on was an international arbitration involving the construction of a power plant in Rabigh, Saudi Arabia. The claims were huge and the underlying technical and contractual issues were very complicated. The volume of exhibits was a challenge. The arbitration continued for several years and resulted in lengthy arbitrational awards. The matter resulted in a final outcome that was favourable to our client.
What advice would you give to younger practitioners hoping to be in your position one day?
My advice to young practitioners is to become experts on the latest developments in construction law, and also the practice rules in state and federal courts. Go above and beyond to seek out opportunities to second-seat matters and to take depositions in construction cases, because learning from doing is critical. I also recommend writing about issues in construction law publications to better learn about legal trends and to start developing a practice from the beginning.