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LEGAL ISSUES


Defending a Band-Aid Site Accident Before It Morphs Into a Million Dollar Lawsuit


By Lisa Hsiao and Rosemary Nunn, Musick, Peeler & Garrett, LLP


O


ften, what initially appears to be a minor scrape at a construction site later blows


up into a million-dollar lawsuit. Your company is blindsided by


service of a lawsuit, at a loss because no one appears to remember anything about the allegations. When you finally track down a field guy who vaguely recalls that day, you get an astonished, “Why would we fill out an incident report – that guy walked off the site and drove himself home!” or “She refused medical attention and seemed perfectly fine!” or “He came back the next day and started working!” Tese facts could be accurate,


Force Majeure Continued from page 13


Terrorism Not only do viruses attack us,


sometimes people who are aggressive can take actions which delay your work. A terrorist attack unrelated to your


company or its work can lead to the slowing or shut down of transportation systems. A terrorist setting off a bomb at the airport, the shipping port, a local subway or a local power plant will impact your ability to finish a project. An equally significant event could be the pirating of a ship on which your materials are located, but here is where definitional problems occur. A pirating event might be considered a purely economic event and not a terrorism event. Must a terrorist attack have political


ramifications, or is any act which attacks the functioning of society a terrorist attack? One could of course define “terrorism” within the clause itself. For all the drafting challenges, a


clause which even mentions “terrorism 14 May/June 2020


but they won’t prevent an expensive lawsuit. So, how can you mitigate unexpected collateral damage from a band-aid accident?


Devil is in the Details Whether a catastrophic injury or


just a minor scrape, the devil is in the details. You must preserve evidence to prevent field rumors from taking root, leading to false memories that witnesses later swear are the truth. Swift action mitigates damage to your reputation and EMR, and provides an advantage in diffusing frivolous lawsuits brought by enterprising, plaintiff-side lawyers. While insurance may cover the bills


for your legal defense, wouldn’t you rather enter the litigation buttressed


or the ripple effect of terrorism” is far better than what I see in most contracts.


Hacking Computer viruses, hacking,


malware, ransomware, and other computer related problems are probably the equivalent of weather as a current problem for companies; when it hits, the impact is far worse than a bit of bad weather. More than ever, computers are at


the core of construction. CAD, digital pictures and videos, drones, robot installers, tablet-based systems running off the project WIFI are just some of the digital tools contractors use. Computer problems are here and


now. Tere are new systems every day, including augmented reality systems and systems run by AI. It could all crash in a second. Yet, find me a standard contract which addresses hacking in a force majeure clause. Hacking does not have to occur


on your computer. Your cloud system exists remotely and could stop working remotely, meaning your company


Rosemary Nunn Lisa Hsiao


with evidence to lessen liability, if not completely exculpate your company? Moreover, liability can arise from


unexpected sources that may not trigger insurance: a signalman could sue over your employee’s negligence in dumping cement; a bystander could trip and fall walking over a debris pile; a motor- cyclist driving in the street could hit a large berm in the road left by your


comes to a stop here and now even though your computers are just fine. Once again, the issue is not just that your company is hacked. Te issue may be that your vendor is hacked or your bank is hacked. In the event of ransomware, fixing the issue can take days and weeks. No issue cries out more for contract risk management than computer hacking. Given the enormous risks


resulting from hacking, you should have a force majeure clause that anticipates these issues and gives you the ability to buy some time (assuming you can email or text the other parties to your contract).


Conclusion Te time has come to update your


force majeure clause to reflect the realities of our times. Stay healthy. 


Larry Lubka is a partner with Lubka & White LLP, Monrovia. Visit the firm online at www.lubkawhite.com.


California Constructor


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