Blog, Construction Law, News
New Protections for Architects, Engineers and Other Design Professionals Senate Bill 230 Becomes Law
On July 1, 2019 Senate Bill 230 becomes law giving important new protections for architects, engineers and other design professionals (DPs). The DPs “duty to defend” their clients becomes null and void for contracts entered into after July 1st. This duty was uninsurable and exposed DPs to significant costs during litigation, prior to any finding of negligence. Also on July 1st, indemnification between parties to construction contracts is reconfirmed, reversing a prior Court ruling. Greg Cafouros, Chair of KGR’s construction law practice group, assisted the American Council of Engineering Companies in shepherding this new law through the Indiana Legislature. Greg is standing third from left at the bill signing ceremony with Governor Holcomb, with Rep. Jerry Torr and Sen. Mark Messmer.
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Construction Law, News
NEW LAW PRODUCES SIGNIFICANT CHANGES IN THE FIELD OF DESIGN PROFESSIONAL LIABILITY – SENATE BILL 230
A significant change has occurred in the field of design professional liability during this session of the Indiana Legislature. Senate Bill 230 was passed and it has been signed by Governor Holcomb. This new law fixes a troubling decision from the Court of Appeals and eliminates a design professional’s duty to defend its client if the client is sued. A discussion of both aspects of the bill follows. The Anti-Indemnification Statute One of the hallmarks of a standard construction or design contract is the inclusion of an indemnity provision, which can be found in all AIA and most other construction contract documents. Essentially, indemnification is when one party to a contract (known as the “indemnitor” or “promisor”) agrees to pay any amounts which the other party to the contract (known as the “indemnitee” or “promisee”) is required to pay in a lawsuit (including defense costs). The typical scenario involving indemnity agreements occurs when a general contractor subcontracts out different portions of a construction project, and the employee of a subcontractor is injured on the job site. If the subcontractor’s employee receives workers compensation benefits, the subcontractor’s employee will be prohibited from suing his employer. However, a typical plaintiffs’ attorney will file a lawsuit on behalf of the injured subcontractor’s employee against the property owner, the general contractor, and in some cases the architectural/engineer/design firm that prepared the plans for the project. Normally, the plaintiffs’ attorney for the injured subcontractor’s employee will sue the property owner, general contractor, and/or architectural/design firm under a vicarious liability theory. As…
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Construction Law, Uncategorized
Timber!
Timber is coming to tall building construction. The International Building Code is set to include all-wood high rise construction, up to 18 stories, in its 2021 edition. Depending on fire resistance, allowable heights from 85 feet to 270 feet would be available to architects and engineers. Indiana incorporates many parts of the IBC into the building code and can accept or reject these new construction regulations once issued. Wood is a carbon-neutral building material and can perform as well or better than concrete or steel. Testing by the Federal ATF and Department of Agriculture indicated that mass timber structures provided more fire protection than currently required by the IBC for conventional tall building construction. We can expect vigorous lobbying by the American Wood Council as the states debate the new code provisions. As expected, the Portland Cement Association thinks this is a bad idea.
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Blog, Construction Law
Contract disputes remain most common problem in construction
According to the 2018 Global Construction Disputes Report, which found that contractual errors and omissions, poor contract administration and contractual misunderstandings are the leading causes of conflict. The report further found that such disputes take, on average, 18 months to resolve — an increase over 2016. Read the full article here
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Blog, Construction Law
No. 1 Cause of Construction Disputes
No. 1 Cause of Construction Disputes? The survey says: Errors and Omissions in contract documentation, due in part to poor design management Poor contract administration Owner/Contractor/Subcontractor failure to understand their contract E&O in contract documentation was the most common cause of disputes in North America for the fourth year running. The annual survey by Arcadis, the multi-billion global dollar consulting firm, documented their findings in a recent report: “Global Construction Disputes Report 2018”. The most common methods to resolve disputes were: Party to Party Negotiation Mediation Arbitration The average time to resolve a dispute took nearly18 months, an increase over 2016. The good news is that early resolution techniques, including mediation, resulted in an 82% success rate before trial. The lesson is that early communication with the project team, including your claim professionals and attorneys, can successfully resolve disputes without the need for trial. Arcadis’ complete report can be found here
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Blog, Construction Law
LOOK, UP IN THE SKY!
Nope, not Superman or Supergirl, just a drone. And there are more at work with architect and engineering firms, according to a recent study by Blue Research http://go.skyward.io/rs/902-SIU-382/images/2018%20State%20of%20Drones.pdf Bottom line: 35% of large construction and engineering firms now use drones. They save time, money and capture more information. One big obstacle is getting employees to embrace the new technology. The other is the red tape and “overly stringent” regulations of the FAA. Compliance with ever-changing laws and regulations, both local and Federal, can be a challenge. Your attorney can be a good resource to control the risk of violating these regulations and help you keep your drones flying. Saving time and money, and being your own Superhero.
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Blog, Construction Law
BIM (Building Information Management) in Dispute Resolution
According to Arcadis, the average construction dispute that ends up in mediation or arbitration takes 14 months to resolve at an average value of $21 million. The source of these disputes most commonly involves errors and omissions and unsubstantiated claims. Building Information Management (BIM) models are transforming how buildings are designed and constructed. This recent report indicated that BIM (Building Information Management) had been used more and more to avoid the time and costs of resolving these disputes. BIM can forensically verify whether the completed work matches the contract’s scope of work and when things went off the rails. BIM then permits owners to accurately assess potential claims arising from alleged construction defects or design errors and omissions, using real data. Because BIM keeps a record the progress of a project’s construction over time, change orders, etc., BIM can run models to verify delay claims, for instance, or the impact of design changes, as well as their true cost in time or money. Of course, this only works if the model is kept up to date during construction with detailed, accurate information, which is often a criticism. For design professionals, BIM can also be used to during design to rectify design conflicts or design errors before final plans are approved or a notice to proceed is ever issued. This reduces the chances of disputes with owners and contractors during construction, along with the attendant costs and headaches of dispute resolution. BIM is still a work in progress for most design professionals and contractors. But it can…
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Prevailing wage law repealed.
Michigan’s Republican-led legislature voted to repeal its prevailing wage law for state-funded projects on June 6, 2018. Michigan joins 22 other states without a prevailing wage law, including the recently added states of Arkansas, Kentucky, West Virginia and Indiana. Wisconsin lawmakers passed a partial repeal in July 2015.
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Blog, Construction Law
The Residential Renewable Energy Tax Credit is back!
The Residential Renewable Energy Tax Credit is back pursuant to the Congressional budget compromise reached last night. What this means for homeowners is that if you are considering upgrading your heating and cooling system to geothermal, you now could get up to a thirty percent federal income tax credit on the amount you spend. A phase-out of the credit will begin in 2020. Geothermal systems are expensive to install, and we always recommend hiring a lawyer prior to entering into any construction contract. For all your real estate legal needs, please contact Justin Leverton at jwl@kgrlaw.com
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Blog, Construction Law
A 3-D printed bridge?
Leave it to the Dutch to create the world’s first 3-D printed concrete bridge. 800 layers of pre-stressed reinforced concrete spanning 26’, and designed for bicyclists. (It is in the Netherlands after all). The bridge uses less concrete than in traditional construction and took three months to print out. For more information, https://www.theguardian.com/technology/2017/oct/18/world-first-3d-printed-bridge-cyclists-netherlands It’s a developing technology that may well shake up the construction industry’s old school building practices.
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