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Construction firms can learn how to manage risk

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by Shannon Moneo last update:Oct 10, 2014

In the construction industry, getting fully paid and avoiding legal action are high priorities.

At the Buildex Vancouver seminar, Managing Risks and Disputes in Construction Projects, four Vancouver lawyers from the Shapiro Hankinson & Knutson Law Corporation, will discuss risk management, how to rectify disagreements, as well as present a primer on environmental law concerns.

“You can’t 100 per cent protect yourself,” said Marc MacEwing, a recognized expert in construction law in B.C.

“But, you do all you can. You do your due diligence.”

Most owners are aware of what needs to be done to protect themselves.

But, to make it easier, MacEwing said, he’s preparing a to do list for attendees.

He suspects the information in his list may confirm what they already know, but it will leave them with a lawyer-approved, how-to document.

During his 30 years of legal experience, MacEwing has found that one of the leading risks in construction is not getting paid.

He said he will offer sensible and realistic advice about how those owed money should proceed.

Topics will include contracts, what’s covered under legislation, steps to pursue a claim and how to file a builders lien.

Historically, construction has been a volatile industry.

In the past, it was common for workers not to get paid for their labour and supplies, which is why builders liens were created in North America in the 18th century, MacEwing said.

Still, risk can’t be eliminated.

“You try to manage it,” said MacEwing, who has written more than 175 articles related to construction law.

Companies that get into trouble are those where the owner doesn’t read the contract, sign-off on items that are problematic and let large receivables pile up.

While there are plenty of “don’ts”, the “do” list isn’t lengthy.

Companies that have lasted and flourished are competently run and have systems in place to keep all aspects of the business on track.

Successful companies also deal with companies in which they’ve had good, long-standing relationships.

But still, disasters can happen, MacEwing said.

And it just isn’t small companies that can flounder.

Bigger companies can have bigger problems.

While statistics about Canadian companies that run into serious trouble aren’t easily found, Craig Wallace believes it isn’t a widespread difficulty.

“Most projects proceed without problems,” he said.

“We usually hear about the horror stories.”

Wallace has 25 years of experience as a commercial litigation and insurance lawyer.

He’s also a professional engineer, who lectures at the University of British Columbia’s civil engineering department.

During his 30 minutes at the podium, Wallace will focus on what to do when something goes wrong and the types of lawsuits that can develop on the construction site.

He’ll talk about what kind of insurance is available that puts the risk on the insurer, not the owner.

Construction sites are filled with risks.

These include collapsed excavation sites, fires, scaffolding collapses, falling cranes, vandalism and utility disruptions to name a few examples.

The questions is: who ends up paying when something goes wrong?

Gaining traction now is “wrap-up insurance” where the owner buys insurance to ensure that everyone is covered, said Wallace, who also specializes in bonding, product liability and shareholder dispute cases.

In Wallace’s experience, insurance is not overly expensive to purchase.

“But, the cost of not getting insurance can be ruinous,” he added.

Still, there are some situations that are not covered by insurance.

Wallace noted that pollution liability is a grey area.

The third lawyer at the seminar, Vanessa Reakes, a specialist in construction litigation, will discuss environmental liability, one area where pollution plays an important part. Seema Lal, a principal with the firm, is the fourth lawyer participating.

Managing Risks and Disputes in Construction Projects starts at 8:30 a.m. on Feb. 20 at Buildex Vancouver 2014.

last update:Oct 10, 2014

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