• Beware of the Dangers of Internal E-Mail
  • August 26, 2008 | Author: Frank E. Riggs
  • Law Firm: Troutman Sanders LLP - Atlanta Office
  • On today’s construction project, e-mail communications with the home office, and with the other project participants, have nearly taken the place of formal correspondence and, to some lesser extent, of telephone conversations and face-to-face meetings.  E-mail is quicker and easier.  You can dash off an e-mail in the blink of an eye, copying multiple parties, creating a written record which can be easily forwarded to anyone with a need to know.  Everyone with access to a computer or PDA can participate.  So, what’s the problem?  Ask PKM Steel Service, Inc., a steel fabricator whose internal e-mail system recently contributed significantly to a judgment against the company in connection with a delay in the fabrication of steel for a construction project.  The facts of the case may suggest valuable lessons for your firm in dealing with internal and external e-mails and company e-mail policy. 

    PKM Steel contracted to furnish structural and miscellaneous steel and metal deck to Steel Service Corp., the subcontractor responsible for furnishing and erecting the steel for a large air craft service facility.  The project was late, resulting in multiple delay claims from several different parties.  PKM Steel was late in delivering the fabricated steel, but argued that the delay was caused by Steel Services Corp.  PKM Steel sued Steel Services Corp. for its additional fabrication and delay costs.  PKM Steel contended that its fabrication delay was caused by Steel Services Corp.’s delay in providing shop drawings and other items necessary for PKM Steel to begin its work.

    A key fact in the court’s resolution of this delay claim was an internal e-mail from the PKM Steel plant manager in which the plant manager acknowledged that PKM Steel planned to stop work on the Steel Services Corp. project in order to focus on another project.  This internal e-mail was, in effect, a confession that the PKM Steel fabrication delay was not the product of delays caused by others, but was the result of a business decision by PKM Steel as to how it should most productively allocate its fabrication resources.  PKM Steel attempted to characterize this internal e-mail as merely “some meaningless theoretical thinking by a person without decision-making authority.”  The court was not persuaded.  PKM Steel lost its delay claim and was found liable for delay damages incurred as a result of the project delay. 

    There are important lessons to be learned from the PKM Steel experience.  In trying to decide between conflicting explanations of key facts in construction project disputes, courts and arbitration panels frequently consider internal communications to be far more reliable than formal communications which have been carefully crafted by senior management, perhaps with the help of legal counsel.  And, as we said at the outset, e-mails often are created and dispatched with little reflection, no oversight by senior management or legal counsel, and with inadequate concern for the possible consequences of the e-mail message.  Comments and conversations which, in times past, were the subject of relatively-private phone calls or one-on-one meetings, now are routinely broadcasted in written form, copied to multiple parties, and indiscriminately forwarded by some of those recipients.  Although e-mail communication is convenient and easy, its advantages present significant dangers for firms finding themselves in a significant construction project dispute.  Consider the e-mail documentation recommendations set out below: 

    1.  Encourage responsible e-mail practices.  Because e-mail is so easy and quick there is a tendency among all of us to us it more frequently and less carefully than other, more formal means of communication.  Remind your project team that e-mail is a part of your project documentation system.  As such, it constitutes a discoverable collection of project communications in a construction dispute. 

    2.  E-mail practices to avoid.  Just as with written forms of communication, your project team should be advised to avoid the following practices in connection with e-mail messages:

    a. Avoid attempts at humor or sarcasm.  Communicating humor, and especially sarcasm, through an e-mail message can be difficult.  Save it for your telephone conversations.  E-mail messages intended to be funny may not seem humorous to the juror viewing that e-mail message much later.  Instead, the message sender’s sarcasm may be interpreted as a lack of professionalism, or worse. 

    b. Do not say anything in an e-mail which you would not write in a letter.  The informality of the e-mail process encourages a more informal, or less professional, level of communication.  Avoid the temptation. 

    c. Document facts, not feelings. 

    d. Do not be misled into thinking that a deletion of your e-mail message will prevent its later recovery and use as a project record. 

    3.  Include e-mail in your document retention policy.  E-mail messages are frequently stored as part of computer back-up operations.  Deleting a copy of the e-mail message from your hard drive may not prevent the recovery of the e-mail message.  Even if the e-mail message is an internal communication, and not printed out in hard copy form, it still may be part of your company’s computerized back-up files.  Destruction of your project e-mail after a dispute arises can only create problems and harmful inferences.  However, if your documentation retention system specifically provides for the “dumping” of e-mail files after a certain period of time, and if those practices are routinely followed, you may eliminate some of the potential harm resulting from embarrassing internal e-mail. 

    4.  Guard against improper use of e-mail.  Unfortunately, e-mail can be “signed” by someone who did not actually create the message.  It can be forwarded or routed without the originator’s knowledge or consent.  It can be modified, saved, printed and distributed very easily.  Police your firm’s e-mail use on a frequent basis.