Litigation-I Win, You Lose vs. Mediation-Win/Win

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  Litigation is a zero-sum game.  It destroys relationships and fosters enmity between the parties.  Parties rarely walk away happy.  Even if they win, the expense of litigation is enormous, and collecting on judgments is difficult. Disputes ultimately resolve, but the focus on winning at any cost can lead to prolonged legal battles.  Living with a lawsuit causes ongoing stress, which can distract you from your business and even have an effect on your health. In a courtroom, the final decision lies with a judge or jury who may not fully grasp the complexities of the case. Parties relinquish control over the outcome, potentially leaving them dissatisfied with the final judgment. Mediation has the opposite effect.   Rather than polarizing people, it enables the parties to attack the issues and not each other.     The process promotes open communication, collaboration and problem-solving, which enables parties to actively participate in crafting ...

Coronavirus and Construction-Slow the Spread!


Yesterday I received my first call from a client with a corona-virus related legal question: If their company suspended projects for two weeks, would they get sued?  Would they be facing legal liability?

So, I would like to provide some reassurance and advice for those of you in the construction industry.
First, the disclaimers.  I am not a medical professional.  We have not formed an attorney-client relationship (unless we have one already).  I am not advising you on your unique situation.

Photo by CDC on Unsplash

1.       Can I put projects on hold without facing liability?

Yes.  At the end of the day, this is a national emergency.  You have the right to protect yourself, your employees, subcontractors and your customers.

2.       Are there clauses I can put in my projects that will protect me?

Yes. Some of you have one already, but it can be expanded.  If you have ever wondered what “force majeure” means, it refers to natural disasters or Acts of God.  Many of you have “no damages for delay” in your contracts.  If you don’t, you should.  In addition, we can now spell out that a pandemic is one of the circumstances that would prevent damages for delay.  I would add the following:

Contractor reserves the right to suspend or cancel projects in the event of a pandemic, natural disaster or other force majeure events in order to protect the health and safety of its workers and customers.  Contractor will make every effort to resume its projects once, in Contractor’s discretion, it has been deemed safe to undertake its regular business operations.

If you prefer, you can also give your customers the same right to suspend or cancel.

Here’s another clause:

In no event will Builder be liable to Owners or any other party for any special, incidental, delay, emotional distress or consequential damages arising from this Contract.  Builder shall not be liable to Owners for any damages resulting from coronavirus or other force majeure policies enacted by Builder.

3.       Should I suspend operations?

It depends.  This is clearly a decision that is unique to each company.  If you are performing new construction or an addition, it may be easy for you to continue working, as long as your workers maintain social distancing.  If you are in the remodeling industry, the situation is different.  If your workers can block off an area of a house or building and keep the owners from entering the area, they may be able to continue working.  If so, it’s time to rent that Port-a-Potty and tell your workers not to use the Owner’s bathroom.  They should wear their masks to prevent transmitting illness to customers.  They should not interact with their animals or children.  They should sanitize or wash their hands as frequently as possible.  If workers are even slightly ill, they should not come to work.

4.       Can I get sued for suspending or canceling a job?

Yes.  Anybody can sue anyone at any time for any reason.  That said, a lawsuit based on delay or breach of contract related to coronavirus will probably not survive a motion to dismiss (this is just my opinion).  What court or jury would award someone damages for protecting public safety?

5.       Create a policy for your workers and enforce it.

I found out I was exposed to coronavirus on a Saturday.  I had an arbitration that Monday.  I had no way to contact the parties in advance and needed to decide how to proceed.  I did reach the other arbitrators, and we agreed I would participate by telephone as long as the parties agreed.  It would have been much easier if there was a procedure in place in advance.  Here are some ideas:

a.       Create a private company Facebook page where employees can post.
b.       Utilize an interactive software program so you can keep customers aware of what is happening with their projects.
c.       Agree to respond to texts (limit to emergencies if you prefer).
d.       Remind your workers to check these forms of communication every day so they are up-to-date on the latest issues.

I will send out another newsletter if I receive more questions from clients or think of more challenges that the industry may be facing.  I implore everyone to use common sense and work to slow the spread of the virus.

Please feel free to call or email me with your questions.

Sincerely,

Andrea

Goldman Law Group
60 Austin Street, Suite 210                                              
Newton, MA 02460                                                                
 T: 617-953-3760
agoldman@goldmanlg.com
www.GoldmanLG.com

“Massachusetts Builders Blog” www.buildingconfidence-llc.blogspot.com
"Home Contractor vs. Homeowner Blog"  www.andreagoldmanlaw.blogspot.com

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