Anyone watching what has happened recently in Houston and Florida will immediately think about the safety and wellbeing of those affected by Hurricanes Harvey and Irma. Once the aftermath of destruction is assessed, both areas and their residents will be looking at a long road to recovery. Among the many coming challenges, owners and contractors of existing projects must take steps to assess the effects and identify their contractual rights and obligations.
The construction industry has long accepted that the New York scaffold law imposes strict liability on construction contractors and property owners for injuries suffered by workers who fall or are hit by a falling object as a result of inadequate scaffolding or similar construction structures. A recent decision by the New York Court of Appeals indicates that this common understanding is wrong.
The Third Circuit Court of Appeals recently filed an opinion regarding whether the filing of a mechanic's lien after the commencement of a bankruptcy case violated the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, the Third Circuit's ruling is important.
The economic loss doctrine is widely misunderstood and often misapplied. At its most basic, the premise of the doctrine is that a party cannot recover purely economic losses in a tort action. While simple in theory, the economic loss doctrine has suffered from wide variations in application – for example, states are split about whether the economic loss doctrine bars third-party claims against design professionals.
Given the critical role of written documentation in resolving construction claims – whether inside or outside of the courtroom – it is essential that companies adequately train the individuals who create written documentation. Companies should also be aware of the best practices for generating and preserving construction records to avoid evidentiary challenges to company records if a construction claim is litigated.
A recent decision of the New York Supreme Court Appellate Division, First Department highlights that a party seeking coverage as an additional insured by virtue of a provision in a construction contract must carefully review both the contract and the insurance policies at issue to make sure that they work together to provide the coverage sought.
The use of mobile phones on construction sites can pose significant safety hazards, which are proving of considerable interest to the Occupational Safety and Health Administration (OSHA), law enforcement, insurers and potential civil litigants. As OSHA's enforcement in this regard is expected to have a significant effect on law enforcement, employers in the construction industry should take care to reduce their potential civil and criminal liabilities.
Under the Occupational Safety and Health Administration (OSHA), multi-employer worksites have come under increased scrutiny, particularly in the construction industry. OSHA will likely continue to enforce compliance with worksite safety and health laws and regulations more forcefully, and the newly invigorated multi-employer worksite policy will be another tool that OSHA employs in its mission.
Construction contractors working under government contracts need to understand the complexities of the claims process under the Contract Disputes Act. A slew of recently decided cases have placed limitations on the landmark Maropakis decision, which illustrated the strict compliance requirements of the act. This confusing and evolving area is full of risk for the unwary government contractor.
California has expanded the definition of public works requiring the payment of prevailing wages to include the hauling or delivery of ready-mixed concrete for a public works project. The law blurs the distinction between contractors and suppliers and attempts to expand the number of employees who are entitled to prevailing wages, which are generally higher than regular wages.
While few construction disputes are heard in Delaware, there are some considerations that litigators must bear in mind, including the fact that because many construction lawsuits involve contract claims only, they will likely be heard in Delaware Superior Court. Further, if the dispute exceeds $1 million, it will be adjudicated before a judge assigned to the Complex Commercial Litigation Division, which was designed to streamline commercial litigation in the Delaware Superior Court.
The primary goal for employers at construction worksites – as well as at industry worksites in general – is to protect the health and safety of the workforce. To this end, the Occupational Safety and Health Administration regulates a variety of workplace safety concerns in both the public and private sectors. One of the most complex and heavily regulated areas of concern is confined spaces.
For construction contractors, default termination is the worst-case scenario from both a financial and reputational perspective. Despite the requirement to use discretion, many owners operate as though default termination were both an absolute remedy and a tool for leveraging the contractor should the relationship become strained.
Commercial owners and developers do not appreciate encumbrances on their property. In Texas, construction contracts reflect this self-evident phenomenon. Virtually every Lone Star contractor owes its client a duty to discharge subcontractor liens filed against the land, building or materials that make up the construction project. Fending off subcontractor liens can be a costly and unpleasant (albeit mandatory) exercise for general counsel.
Following a recent court ruling, construction practitioners should carefully assess the manner in which they deal and communicate with experts. Thought should be given to what type of work product the expert will produce and what type of protection from disclosure that work product will receive. Industry clients should understand the consequences of creating internal documents that evaluate risk in the ordinary course of business.
Several significant changes have been made to the laws pertaining to the administration and enforcement of prevailing wage requirements for public works projects by the California Department of Industrial Relations. Affected public agencies and contractors should familiarise themselves with the changes as it is anticipated that compliance will be actively monitored and enforced.
Illinois law was already more favourable to contractors and subcontractors than that of most other states, but the Illinois legislature recently gave them a greater edge against lenders in failed construction projects. Contractors which are unpaid on a project now have priority on the value of the entire improvement – even the value paid for by the lender – and are not limited to the value that they themselves supplied.
An Illinois circuit court recently issued an opinion which illustrates some of the consequences of the Illinois mechanics' lien law and the perils that a real estate lender can face when working out a defaulted loan. In Illinois, a prior recorded mortgage has no priority over the mechanics' lien claims of contractors, subcontractors and material suppliers which supplied work and material for a construction project.
The American Institute of Architects has published the latest revisions to its standard forms of agreement to be used in the design and construction of projects in which architectural design plays a prominent role. Key changes have been made to the owner-architect and owner-contractor agreements.
The discovery of environmental contamination which must be remedied before construction can commence or proceed can lead to claims against the civil engineering firms that prepared pre-construction environmental reports. A recent Seventh Circuit Court of Appeals decision has clarified the issues surrounding the calculation of damages in such cases.