Managing Risk of Site Safety and Contracts with Municipalities

Site Safety, Construction ContractsManaging Risk of Site Safety and Contracts with Municipalities

In only limited circumstances can employees sue their employers in court in an attempt to recover for injuries incurred on a job site. Instead, employees injured on the job must make a claim under their state’s workers’ compensation system to recover from their employers. If the injuries are serious or if there is a death, that employee or their estate may then look to others for additional recovery.

“Others” may include design professionals.

For example, in a common construction accident scenario, an employee of the contractor is injured while working to excavate a trench. After recovering from the contractor, the construction worker then sues the design professional alleging that it had responsibility for the safety of the job site and contends that the design professional failed to fulfill that responsibility. The injured construction worker may also claim that the design professional was responsible for making sure that the contractor followed OSHA requirements for construction site safety including sheeting and shoring.

If this project’s contract documents include industry standard language, the contract for professional services and the construction contract and general conditions should clearly articulate that construction job site safety is solely the responsibility of the general contractor. Additionally, the contracts should also include language requiring the general contractor to indemnify the design professional and the project owner if either are sued for a worker’s injuries that were ultimately caused by the general contractor’s negligence. Assuming such language was included, the design professional would be able to bring its own claim against the general contractor for indemnity and recover any amounts that may have been paid to the injured worker and potentially for any amounts spent on attorney’s fees.

The above scenario likely sounds familiar. It is a fairly typical scenario for construction site injuries or death that may involve the design professional. However each situation is unique including those situations where the project owner and the general contractor are essentially one and the same. For example, it is not uncommon for small municipalities to be unable to afford or justify having full time design professionals on staff. Those municipalities instead may contract with a local design professional to provide professional services on an as-needed basis and pay that local design professional a fee rather than a salary. The municipality occupies the position of owner in this situation, but it may also occupy the position of general contractor in this scenario.

For example, if the municipality asks a design professional that is contracted to provide engineering services for a new water line system, and then the employees of the municipality’s water department do the manual labor of installing the new water lines, the municipality is occupying both the position of project owner and contractor. In this situation the design professional should make sure that the applicable contracts take into account the dual role of the municipality. Many contracts only contemplate the project owner-design professional relationship. They outline the responsibilities of the design professional, including attendance at government meetings, work on municipal planning issues, the updating of plans, etc., and they provide the fee structure under which the design professional will be paid. The contracts however may fail to set out the municipality’s obligations when it acts as its own general contractor, including its sole responsibility for its own employees’ safety while working on municipal projects. These contracts may also fail to clearly state that the design professional has no responsibility for construction site safety and to provide that the design professional will be indemnified if sued by a municipal employee for injuries that were actually caused by the municipality’s negligence such as the its failure to use proper shoring while its employees were doing trench work.

Without this important language, the design professional may find itself one of or even the sole defendant in a lawsuit facing allegations that the design professional should have made sure proper shoring was used. The municipality, as the employer of the injured worker, will be protected from suit by the employee by workers’ compensation laws. As such, absent this important language in the municipality’s contract with the design professional, the design professional would have no ability to include the municipality in the lawsuit or to seek reimbursement for any amount it may ultimately have to pay to the injured worker or for the design professional’s defense. When working for a governmental entity (or any other client) that is acting as both owner and general contractor, consult with your legal advisor to make sure that both roles are adequately taken into account in the professional services contract. The failure to do so can create significant problems in the future.

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