Navigating Construction Accident Litigation

Between 2006 and 2008, there were 7,461 claims involving falls resulting in $243 million-plus in reserves, according to Bradford S. Purcell, a partner at the Illinois-based law firm of Purcell & Wardrope.

During that period, 23 percent of construction accident injuries related to overexertion, 25 percent to falls, and 22 percent involved the injured person being struck by an object.

Purcell, who spoke at the Property Loss Research Bureau’s national conference in Orlando, Fla., said the law allows injured workers to pursue recovery in civil litigation against multiple parties involved in a construction project — even those who had no direct role in creating the hazard or unsafe work practice that led to the injury.

“The law casts a wide net in construction litigation,” Purcell said.

The parties named in a construction accident lawsuit could include: any contractor who subcontracted with the employer of the injured person; general contractor; construction managers; safety consultants; architects and engineers; project developers; property owner; and subcontractors.

Any company that is or has worked on a construction site can be exposed to a claim or lawsuit, Purcell said.

“Because of responsibilities they have on the job site, they have exposure,” he said.

Purcell suggested collecting the following documents relating to the construction project/site:

• Contract, purchase order or other written agreement, bid documents;
• General conditions, safety mandates, specifications and other documents incorporated by reference in the contract;
• Subcontracts, purchase orders;
• Payroll records, time tickets;
• Change orders;
• Safety manuals of all contractors;
• Safety meeting minutes;
• Photos;
• Accident reports, form 45s;
• Entire OSHA file, including statements and photos’
• Certificates of insurance;
• OSHA standards;
• Daily diaries, job progress notes from 60 days prior to the date of loss to 30 days after;
• Any written communication in relation to the job; and
• Site plans, blueprints, schematics.

The Law

According to Purcell, while there is a general rule that one who employs an independent contractor is not liable for that contractor’s negligence, there are exceptions in the Restatement (Second) of Torts §414. Most notably, the direct liability exclusion and retained control exception, he said.

Most states have adopted some form of §414, he said.

The retained control exception is also known as the vicarious liability exception. According to Purcell, the main question raised by this exception is to what degree of control must a construction company defendant exercise to be subject to liability under the theory?

He described the case law as focusing on two factors: the terms of the contract agreed to by the parties and the active participation of the defendant on the job site. While case law exists to assist in determining whether this standard has been met, courts across the country do not view job site control in the same way, he said.

Even construction practices can establish retained control.

“Just that flippant way of sharing tools can establish exposure in some cases,” Purcell said.

He said the direct liability exception focuses on the overall safety supervisory responsibilities of the defendant.

Purcell said courts apply the exception by utilizing two criteria: Did the contract require the defendant to perform an overall safety function on the job site? And did the defendant have pre-accident notice, actual or constructive, of the unsafe work practice or hazardous work condition that caused the injury?

In addition, direct liability can be imposed on a party if it assumes safety responsibilities.

Purcell outlined the following points impacting the notice issue:

• Actual notice.
• Did the defendant actually see the hazardous condition or unsafe work practice prior to the accident?
• Did the defendant receive a complaint about it prior to the accident?
• Did the defendant participate in creating the hazard or recommend the unsafe workplace practice?
• Was the defendant present at safety meetings prior to the accident where the topic was discussed?
• Constructive notice.
• How long did the hazard exist prior to the accident?
• How long did the unsafe workplace go on prior to the accident?
• Did the hazard or unsafe practice exist in an area not readily accessible by anyone other than plaintiff’s employer?
• Was the hazard or unsafe practice visible to the naked eye from a reasonable distance?
• Were there prior accidents involving the same hazard or practice?

Risk Transfer

According to Purcell, there are three main ways to transfer risk in construction accident litigation — indemnity agreements, insurance requirements and contribution.

Purcell said that a minority of jurisdictions allow a party the ability to contract away their responsibility. However, most recognize indemnity agreements as partially enforceable.

“You cannot contract away, by way of an indemnity agreement, your own fault,” Purcell said.

And in some states, indemnity agreements are not enforceable at all, he said.

Most jurisdictions allow insurance requirements as long as they are imposed on other contractors downstream.

Purcell suggested getting all of the applicable policies because with insurance requirements and contribution, it’s important to know all of the parties’ coverage.

“It dictates, many times, how cases are structured,” he said.

He suggested adjusters tender early and often, ensuring a response is received in order to line up coverage. Because of the other insurance clause in a policy, he said adjusters need to determine who is covering who, how much coverage exists, and in what order the policies will pay.

Breach of contract claims can be filed against those parties who fail to procure insurance required by the contract, he said.