LIABILITY ASSOCIATED WITH EMERGING CONSTITUENTS OF CONCERN IN THE ENVIRONMENT

Liability Associated with Emerging Constituents of Concern In the Environment

    Modern industrialized societies rely on thousands of chemicals in everyday life, for agricultural, manufacturing and domestic applications. As of September 2014, there were more than 45 million organic and inorganic substances listed in the CAS registry of the American Chemical Society, with about 4000 new substances added each day.

    In contrast to classic “priority pollutants” (or persistent organic pollutants), such as PCE, PCBs or PAHs, whose primary sources are industrial solvents/drycleaners, transformers and combustion processes, many of the “emerging contaminants” of current interest have domestic waste as their predominant source – either in the form of sewage or septic tank effluent or landfill leachates.

    Research is documenting with increasing frequency that many chemical and microbial constituents that have not historically been considered as contaminants are present in the environment on a global scale.  These "emerging contaminants" or “emerging constituents” or “contaminants of emerging concern” are commonly derived from commercial, residential, municipal, agricultural, and industrial wastewater sources and pathways.  Types of contaminants include some pharmaceuticals, lotions, soaps, sunscreens, insect repellents, household cleaners, over-the-counter medications, herbicides, pesticides and chemicals used in manufacturing such as bisphenol A (BPA).  See table below for a partial list of detected constituents.

U.S. EPA and several states are working to improve its understanding of a number of CECs, particularly pharmaceuticals and personal care products (PPCPs) and perfluorinated compounds among others.

These newly recognized contaminants represent a shift in traditional thinking as many are produced industrially yet are dispersed to the environment from domestic, commercial, and industrial uses.

"Emerging contaminants" can be broadly defined as any synthetic or naturally occurring chemical or any microorganism that is not commonly monitored in the environment but has the potential to enter the environment and cause known or suspected adverse ecological and (or) human health effects.  In some cases, release of emerging chemical or microbial contaminants to the environment has likely occurred for a long time, but may not have been recognized until new detection methods were developed.  In other cases, synthesis of new chemicals or changes in use and disposal of existing chemicals can create new sources of emerging contaminants.

 While not a public health issue, the emerging contaminants have been detected in drinking water supplies at trace levels and can affect some consumers’ perception of drinking water quality.  In fact, an independent survey conducted recently indicated that 63 percent of Americans are concerned about pharmaceuticals and other contaminants in their drinking water.  In California where the water will soon be almost as valuable as gold, and with the plans for using more and more of recycled water, the presence of these constituents in the water is of major concern.

       Emerging Constituents are usually unregulated chemicals. However, regulatory requirements will change as new information is developed. To that end, additional data are needed to characterize the presence and persistence of Emerging Constituents in various water sources. This information, along with epidemiological and toxicological data, is used to set priorities for developing new drinking water standards, new water quality standards, new state notification levels and new monitoring requirements.

Once Emerging Constituents have been detected, the question naturally arises as to what effect, if any, these compounds may have on people and the environment.  Several different regulatory agencies share responsibility for determining the acceptable concentration of these chemicals.  This is a formidable task as there are tens of thousands of chemical compounds in common use.  Consequently, state and federal authorities rely on sales/usage information and monitoring data (from studies such as this one) to help determine appropriate research and regulatory priorities.

Emerging Constituents are not targeted for removal by filtration or other treatment processes, but continue on to other water sources.  As water moves from its origin (headwaters) through cities and downstream, each reiteration of this process works to concentrate those compounds not removed in either the drinking water or wastewater treatment process.  Although Emerging Constituents can be removed by some modern facilities, not all treatment facilities are equipped to effectively remove Emerging Constituents.  Traditional wastewater treatment does not effectively remove these Emerging Constituents, allowing them to move into the environment even after water has been treated.

The Sarbanes-Oxley Act of 2002 established new standards for all U.S. public company boards, management and public accounting firms. This landmark legislation triggered massive changes to virtually every aspect of corporate governance, business processes and management controls, financial management, external reporting and disclosures, independent auditing, and securities regulation. Similar legislation to improve corporate governance and management has also been enacted internationally.

Environmental liabilities – and their impacts on corporate financial statements – have not escaped the changes brought on by Sarbanes-Oxley.  Stakeholders are seeking a higher level of accuracy and assurance when it comes to resolving environmental liabilities arising from legacy contamination. All of this overlies the "routine" technical complexities inherent in environmental remediation, including: uncertainties in the nature and extent of subsurface contamination; ever-tightening cleanup levels; changing regulatory requirements; emerging contaminants of concern; multiple technological approaches; impacts on facility operations and real estate values, and external drivers such as stakeholder reaction/acceptance. The responsibility to deliver this higher level of accuracy and assurance typically falls to corporate environmental managers, their staff, and their external environmental consultants and advisors.

In response to these changing requirements and expectations, the environmental and management professions have developed new standard practices/guidance, analytical methods and software tools for improving the cost estimating and cash flow management for environmental liabilities.

The effects of emerging claim and coverage issues on the insurance business are uncertain.  As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claim and coverage may emerge.  These issues may adversely affect the business by either extending coverage beyond the underwriting intent or by increasing the number or size of claims.  Examples of emerging claims and coverage issues include, but are not limited to:

·         judicial expansion of policy coverage and the impact of new theories of liability;

·         the assertion of "public nuisance" or similar theories of liability, pursuant to which plaintiffs seek to recover monies spent to administer public health care programs, abate hazards to public health and safety and/or recover damages purportedly attributable to a "public nuisance";

·         medical developments that link health issues to particular causes, resulting in liability claims;

·         claims relating to unanticipated consequences of current or new products

Biological Activity of Steroid Hormones in U.S. Streams

 A technician deploying a passive sampler in a tributary of the Shenandoah River, Virginia. The passive sampler employed a solid absorbent material that collects chemicals from water that flows through the sampler.

       Testing of U.S. streams has detected glucocorticoid and androgen biological activity. In a collaborative study between the National Cancer Institute (NCI), Laboratory of Receptor Biology and Gene Expression, the U.S. Geological Survey (USGS), and others, scientists studied the potential for the biological activity in streams of glucocorticoids and androgens hormones—both potential endocrine-disrupting chemicals. Scientists tested water samples using a new cell-based bioassay that tested for molecular responses triggered by the presence of glucocorticoids and androgens in water. They found glucocorticoid and androgen activity in 27 and 35 percent of the water samples, respectively, potentially indicating the widespread occurrence of these hormones in streams.

       Glucocorticoids—steroid hormones commonly referred to as "stress hormones"—are known for their potential to decrease immune responses. Glucocorticoid-based pharmaceuticals (hydrocortisone and prednisone, for example) are widely prescribed to relieve inflammation. Androgens are anabolic steroids that affect the development and maintenance of male characteristics, as well as other physiological functions. Depending on the timing of exposure, glucocorticoids and androgens can affect the endocrine systems of living organisms, but unlike estrogenic chemicals, not much is known about their occurrence in the environment.

      USGS scientists provided extracts for testing from more than 100 water samples from streams and rivers located in 14 States. The testing method the NCI researchers developed allowed them to detect the activation of cell receptors or genes that respond specifically to glucocorticoids or androgens. Activation of fluorescently tagged cell receptors led to visual evidence of the presence of glucocorticoids or androgens in the samples of stream water. Other molecular methods were used to confirm that specific genes were turned on.

Considering that both glucocorticoids and androgens influence body development and metabolism, and have the potential to influence normal reproductive, endocrine, and immune system function, their presence in the environment has potential implications for wildlife and human health.

Chemicals from Land-Applied Biosolids Persist in Soil

       Soil sampling in Eastern Colorado indicated that some chemicals introduced to nonirrigated farmland through biosolids application persisted through 468 days, and some chemicals were sufficiently mobile to be detected in soil as deep as 126 centimeters below land surface.

       A study by scientists from the U.S. Geological Survey (USGS) and Colorado State University-Pueblo shows that some chemicals in biosolids that are applied to nonirrigated farmland are sufficiently persistent and mobile to move into the soil beneath farm fields. Biosolids are the treated solid-waste component of wastewater treatment plant effluent; about 50 percent of the biosolids produced in the United States are applied to land as a fertilizer.

The field-scale study was initiated in 2007 in a semi-arid environment in eastern Colorado on land with no previous history of biosolid application. Typical agronomic practices were employed in the study. The biosolids, soil, and crop were monitored for a year and a half, which enabled the evaluation of the persistence and movement of contaminants from biosolids into the soil column after biosolid application.

Measurements indicate that nonylphenols (commonly used in detergents and other manufacturing), benzo[a]pyrene (a polycyclic aromatic hydrocarbon and byproduct of incomplete combustion of organic matter), diethyl phthalate (commonly used in plastics), d-limonene (a solvent obtained from citrus fruits), HHCB (galaxolide, a polycyclic organic musk used in fragrances), and triclosan (an antimicrobial) had migrated downward through the soil by 468 days after application. The study also showed indications that uptake by mature wheat plants was minimal. Soil and biosolid samples that were collected before and after biosolids application and incorporation in the soil were analyzed for 57 chemicals of potential environmental concern. During harvest, wheat samples were collected from control fields and from fields on which biosolids had been applied.

Complex Mixture of Contaminants Persists in Streams Miles from the Source

Natural processes in stream ecosystems such as dilution and microbial degradation are known to attenuate some contaminants to below levels that can cause harm to ecosystems. However, a team of U.S. Geological Survey (USGS) scientists has shown that many chemicals discharged from municipal wastewater treatment facilities persist for miles downstream at levels known, or suspected, to cause adverse health impacts to aquatic organisms—including endocrine disruption in fish. The study also showed that these persistent chemicals occur in complex mixtures with unknown ecological consequences.

 A USGS scientist collecting a water-quality sample from Boulder Creek, Colorado. The scientist is following a set of protocols to ensure the water sample is representative of all the water flowing down the creek at sampling station.The Complex Mixture

Overall, there were 73 organic chemicals detected in the effluent from the Boulder, Colorado, wastewater treatment plant (WWTP) and 56 chemicals detected in Boulder Creek stream water below the WWTP discharge point. There were 98 organic chemicals detected in the effluent from the Ankeny, Iowa, WWTP and 71 chemicals detected in Fourmile Creek below the WWTP discharge point.

The mixtures contained metal complexing agents, detergent degradation products, personal care products, pharmaceuticals, steroidal hormones, pesticides, and other compounds. The highest concentration compounds (greater than 100 micrograms per liter) detected in both WWTP effluents were ethylenediaminetetraacetic acid (EDTA – a metal complexing agent) and 4- nonylphenolethoxycarboxylate (a detergent degradation product).

Concentrations of pharmaceuticals were lower (less than 1 microgram per liter), and several compounds, including carbamazepine (a drug used to control seizures) and sulfamethoxazole (an antibiotic), were detected throughout sections of the two streams that were studied.

The results, published in Environmental Science and Technology, are part of a long-term study of the fate, transport, and ecological effects of the wastewater discharged into two streams (Boulder Creek, Colorado, and Fourmile Creek, Iowa) from municipal wastewater treatment plants. In a unique field application, the scientists used a sampling approach that involved multiple locations along the streams (Lagrangian) to ensure water samples and chemistry were representative of a parcel of water as it flowed downstream from the point of wastewater discharge. Many of the contaminants from the complex mixture of multiple types of chemicals (see text box) showed little decrease in concentration, other than that due to dilution, as they flowed down the approximately 6- to 8-mile segments of the streams studied. Importantly, some of these contaminants persisted at concentrations that are known, or suspected, to cause sublethal health effects to exposed organisms. Furthermore, several chemicals in the complex mixtures identified in this study are steroidal hormones and/or other chemicals that mimic estrogen, which could have additive health effects. The ecological consequences of the complex contaminant mixtures the scientists identified are poorly understood.

This study was funded by the USGS Toxic Substances Hydrology Program and Hydrologic Research and Development Program. Additional support was received by the U.S. Environmental Protection Agency.

Detergents in Streams May Just Disappear

The Story of 4-n-nonylphenol Biodegradation in Stream Sediments

USGS scientist measuring pH and other water properties on the banks of Fourmile Creek, Iowa, before collecting a sediment sample for laboratory biodegradation experiments

Since about 2000, U.S. Geological Survey (USGS) scientists have been finding the chemical breakdown products (degradation products) of household detergents in streams downstream from wastewater treatment plants WWTPs. Detergent degradation products are among the most frequently detected compounds in stream samples and are among the compounds measured at the highest concentrations. Environmental professionals are concerned about these compounds because scientists have shown that a class of degradation products known as nonylphenols can disrupt normal hormonal (endocrine) function in fish. To help determine the environmental fate and transport of detergent degradation products discharged into streams from WWTPs, USGS scientists assessed the potential for naturally occurring microorganisms to remove one common detergent degradation product (4-n-nonylphenol) from stream sediments.

This process of natural degradation by microorganisms is called biodegradation. In a laboratory setting the scientists tested the ability of 4-n-nonylphenol to biodegrade naturally in the environment using actual stream sediment from three streams. Sediments were collected from upstream and downstream of WWTP discharges. The experiments demonstrated that naturally occurring microorganisms that inhabit the stream sediments can biodegrade 4-n-nonylphenol in sediments under oxic (with oxygen) conditions in the laboratory; however, no biodegradation was observed in the laboratory under anoxic (without oxygen) conditions. These results help explain the presence and absence of these compounds in the environment, and may suggest ways to enhance natural removal mechanisms. For example, WWTP practices that produce high dissolved-oxygen concentrations in sediment and water downstream of wastewater discharges could improve the potential for natural removal. Environmental professionals, water resource managers, and WWTP managers can use this information to develop sound programs and practices regarding the occurrence of emerging wastewater contaminants in the environment.

Reference

Bradley, P.M., Barber, L.B., Kolpin, D.W., McMahon, P.B., and Chapelle, F.H., 2008, Potential for 4-n-nonylphenol biodegradation in stream sediments: Environmental Toxicology and Chemistry, v. 27, no. 2, p. 260-265, doi:10.1897/07-333.

Metropolitan Engineering, Consulting & Forensics (MECF)

Providing Competent, Expert and Objective Investigative Engineering and Consulting Services

P.O. Box 520

Tenafly, NJ 07670-0520

Tel.: (973) 897-8162

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HOW TO MANAGE CONSTRUCTION DISPUTES TO MINIMIZE SURETY AND CONSTRUCTION CLAIMS. PART 3: FORCE MAJEURE CLAIMS.

HOW TO MANAGE CONSTRUCTION DISPUTES TO MINIMIZE SURETY AND CONSTRUCTION CLAIMS.  PART 3: FORCE MAJEURE CLAIMS.

Construction is a business fraught with risk.  Disputes over even the smallest of issues can quickly escalate, with crippling consequences to the project and the parties.  Over the years, the construction industry has developed various methods of contractually allocating the risk of project delay and disruption.  Some of these methods include liquidated damages provisions, "no damages for delay" clauses, mutual waivers of consequential damages, provisions that limit liability, claims notice provisions, and provisions addressing responsibility for the adequacy of the construction plans and specifications.  Parties frequently litigate the sufficiency of these risk-shifting efforts in conjunction with the underlying merits of delay and disruption disputes.

Construction Claims & Disputes

In Part I of our series of how to manage construction disputes to minimize surety and construction claims, we addressed the construction delay claims and the methods typically used to analyze them.

We indicated there that the most frequently encountered claims include:

1.            Construction Delay Claims

2.            Disruption and Loss of Labor Productivity Claims

3.            Design and Construction Defect Claims

4.            Force Majeure Claims

5.            Acceleration or Compression of the Schedule Claims

6.            Suspension, Termination and Default Claims

7.            Differing Site Conditions Claims

8.            Change Order and Extra Work Claims

9.            Cost Overrun Claims

10.         Unacceptable Workmanship or Substituted Material Claims

11.         Non-payment Claims (stop notice (or Notice to Withhold) claims, mechanics’ lien (only for private construction projects) and payment bond claims)

Part III of this series discusses item 4 above: Force Majeure Claims

Third Party / Force Majeure

Those engaged in construction or other closely related fields know that the wording of a contract can make or break your entire business.  Some contractors will create their own agreements to bind themselves and clients together while some will utilize a standard industry form contract purchased from a third party. Either of the scenarios can yield unfavorable results if due care isn't taken in ensuring that certain clauses are included and are written correctly.

When contractors and other construction professionals hear "force majeure," many think of an "act of god" or visions of lightning strikes or an earthquake. But force majeure can mean so much more. A well-drafted contract or agreement will define exactly what a force majeure is and what will happen if such circumstances arise.

The direct translation of force majeure is “greater force”, or in other words a force that is out of the hands of any party to the contract.  Typically, these clauses are inserted into contracts to excuse a party from liability if an event which could not be foreseen prevents that party from fulfilling its contractual obligations.  See Pacific Vegetable Oil Corp. v. C.S.T., Ltd. (1991) 29 Cal.2d 228).  Examples of typical force majeure events include natural disasters, insurrections, war or “Acts of God”.  The Supreme Court of the United States has indicated that a force majeure event is one that is “…unexpected, something beyond reasonable foresight and skill.”

Force Majeure are those unforeseen events with causes beyond the contractor’s control, for which the contractor is deemed excusable in their failure to perform within the required time limits.  Force Majeure schedule impacts are commonly known as unforeseen events, causes beyond the contractor’s control, and events without fault or negligence.  Contracting Common examples of delays that are beyond the control and without the fault of the contractor include but are not limited to:

•Acts of God or of the public enemy

•Acts of the Government in either its sovereign or contractual capacity

•Fires

• Epidemics

• Quarantine restrictions

• Strikes

• Freight embargoes

• Unusually severe weather.  See Wickwire, J.M., T.J. Driscoll, S.B. Hurlbut , and S. B. Hillman (2003), “Construction Scheduling: Preparation, Liability, and Claims, Construction Library Law”, 2nd ed., Aspen Publishers, USA.

Under such provisions, the contractor is entitled to an extension of time to complete work if the delay is deemed excusable.  An Act of God typically refers to a natural occurrence caused directly and exclusively by natural forces without any human intervention, which could not have been reasonably foreseen or prevented by the contractor or any other party to the contract.  This category includes earthquakes, landslides, tornadoes, hurricanes, lightning, and floods.  Liquidated damages are not to be assessed during this extended performance period, provided the delay is not directly or indirectly the fault of the contractor.

Abnormal weather conditions can greatly influence the execution of activities, in turn affecting completion of the project on time.  Most contract documents state that the only weather that should impact the completion of the project within schedule is “unusually severe” weather conditions. Weather can have both a direct and indirect impact on construction. For example, if unusually severe rainfall amounts stop all earthwork activities, there is a direct effect and stoppage of work.  In addition to the days that the rain has taken place, the indirect effect of the rain is that the earthwork activity cannot be started until the soil has dropped to a workable moisture content.

Not all unexpected events or conditions, however, are situations that will excuse performance of a contractual obligation.  To obtain relief under the force majeure clause the contractor must generally clear three hurdles: First, something unexpected must occur.  Second, the risk of the unexpected occurrence must not have been allocated to either party by the agreement.  Finally, the unexpected occurrence must render performance commercially impracticable.  If a contractor fails to protect itself from a foreseeable contingency, it has assumed that risk.  Furthermore, a contractor is expected to take measures to prevent the harmful effects of uncontrollable events whenever reasonable - known as "mitigation."  Reasonable weather protection measures should be employed even if the contractor has no notice of a "freak" storm brewing.

If no Force Majeure Clause, then the Contractor bears the Risk

When there is no force majeure clause in the contract, the risk of loss for any unexpected or unforeseen event generally falls on the contractor.  Since force majeure events are generally acts of nature (or God), it is said "because the same rain falls on the owner's head as on the contractor's" both parties share the risk; therefore, the contractor is entitled to a time extension, but not compensation.  Therefore, if the event causes a delay in performance, a contractor could be allowed to raise the doctrine of force majeure to obtain an extension of time without penalty and as a defense against assessment of liquidated damages.  Nevertheless, the contractor will not normally be permitted to recover losses or damages resulting from that delay.  Moreover, contractors typically bear the costs to demobilize and remobilize, or repair work caused by an "Act of God" event.

It is not uncommon, therefore, for parties to include a force majeure clause in their contracts to limit the risk that a future event will prevent them from performing and subject them to liability.  Force majeure provisions serve two purposes: allocating risk and providing notice to the parties of events that may suspend or excuse performance.  If an event that triggers a force majeure clause occurs, theoretically, the burden will be borne by the party that assumed the risk. 

Parties seeking to limit their exposure to a force majeure event should be careful, however, to use specific and detailed language in defining the scope and effect of a force majeure clause.  Sun Operating Ltd. P’ship v. Holt, 984 S.W.2d 277, 283 (Tex. App. Amarillo 1998, pet. denied); see also Maralex Res., Inc. v. Gilbreath, 76 P.3d 626, 636 (N.M. 2003); R&B Falcon Drilling Co. v. Am. Exploration Co., 154 F. Supp. 2d 969, 973 (S.D. Tex. 2000).  The traditional boilerplate language contained in most force majeure clauses is too general and vague for modern circumstances because courts tend to narrowly interpret such language and limit its application to the events specifically listed.    

Even if a force majeure clause properly and adequately describes the types of incidents that are covered by the clause, problems could still exist if the clause is not completely clear.  For example, if a contractor is laying a building's foundation, and a flood would be considered a force majeure, if a flood occurs, what is the course of action for the contractor to take?  And what happens to his contract? Does it terminate, or does the contractor have the ability to continue work?  If additional work is needed how much compensation is due to the contractor?  These provisions should also address important questions, such as: What are all the events or conditions that are considered force majeure?  Who is allowed to invoke the clause?  What is the appropriate remedy where the clause is invoked?  Which contractual obligations are covered by the clause?  How should the parties determine whether the event creates an inability to perform?

A properly written force majeure clause will address these questions and more to protect the contractor from exposure to unexpected liability.

Much of the jurisprudence surrounding the interpretation of force majeure clauses is rooted in the cases addressing the doctrines of impossibility and commercial impracticability (including Section 2-615 of the U.C.C.).  More importantly, these doctrines often set the default rules around which the parties to a contract may bargain for more or less protection.  In dispute resolution, courts evaluate weather delays on a case-by-case basis, considering such factors as the job site’s geographic location, the nature of the work performed, the contractor’s previous experience in the area, and the contractor’s reasonable anticipation of weather conditions [Wickwire et al. 2003].  Anticipating weather can be done by looking at historical data for typical “rain days” in the same geographic location, accounting not only for the time of year, but also for that specific location.

Weather impacts are not strictly limited to rain and the rainy season; also included but not limited to abnormal humidity, frozen earth, winter weather, extreme heat, severe weather outbreaks, wind, and hurricanes.  See Bramble, B.B. and Callahan,  M.T. Construction Delay Claims. Third Edition. New York: Construction Law Library, Aspen Publishers, 2000; Bramble, B.B., D’Onofrio, M.F., and Stetson, J.B. Avoiding & Resolving Construction Claims. Kingston, Massachusetts: R.S. Means Co., 1990.

What is not a force majeure?

Often, if a contract defines force majeure events, unless language expands that list by stating “including without limitation,” then an event not specified in the clause may not excuse nonperformance.  For example, if the contract defines force majeure as a flood or hurricane, then a lightning strike may not excuse nonperformance unless a phrase such as “including without limitation” is in the force majeure clause.

Most force majeure clauses only provide relief in the form of an extension of time without penalty or without assessment of liquidated damages for a period equal to the force majeure. Clauses seldom provide any compensation for the costs to demobilize and remobilize; to repair work; for the escalation of material and labor prices; or the premium demanded by transporters still operating in the affected areas. However, the contractor should review the changes or claims clause to see if it may still be able to recoup costs.

The majority of jurisdictions hold that a force majeure event discharges the party’s performance even if there is no force majeure clause because the party did not assume the risk of performance under any and all circumstances. A minority of jurisdictions hold that, in the absence of a force majeure clause, the party prevented from performing will be held liable for nonperformance consistent with the terms of the contract addressing default or nonperformance

Classifying Schedule Impacts

Once recognized that an event has occurred in the as-built completion of a project that differs from the established schedule of record, which potentially has an impact on the schedule and is attributable to a party, the next step is to classify the delay, so that a schedule impact technique can be applied. Delays are classified into one of the following four categories:

1. Excusable, Non-Compensable Delays

2. Excusable, Compensable Delays

3. Non-Excusable, Non-Compensable Delays

4. Non-Excusable, Compensable Delays

Identifying the category of each delay is essential before applying a schedule impact analysis technique.  Each of these four categories is attributable to the owner, contractor, or third party / force majeure , and will be explained in further detail.

In the northern part of the United States, the start of spring after a long cold winter is traditionally a welcome event.  However, in recent years, the start of spring has become synonymous with another, less welcome event: flood season.

This spring, several areas of the United States are dealing with record high water levels and many areas of the Province have faced difficulties with flooding.

For the construction industry, flooding and other adverse weather events may have severe impacts on project schedules and costs.  If you’re faced with a situation where your work will be impacted by causes outside of your control, you will want to consult the force majeure provisions in your contract.

Aside from being an occurrence which is truly unforeseen, a force majeure event must be of such significance that the failure to perform in accordance with the contract could not be overcome by the reasonable efforts of the party claiming relief.

The essential purpose of the force majeure clause is to allocate the risk for unexpected events between the owner and contractor (or contractor and sub-contractor or supplier).  Generally speaking, an owner will want a tightly worded force majeure clause which limits the events considered to be force majeure to specifically enumerated events like natural disasters and wars.  On the other hand, a contractor will generally be looking for a more inclusive (or loosely worded) clause which would leave the definition of force majeure open to other events, including the failure of third parties to perform services or supply materials.

Apart from the issue of agreeing as to what constitutes a force majeure event, parties to a contract should also ensure that their agreement includes specific provisions on what happens if a force majeure event occurs.  Is the contractor entitled to an extension of time and additional costs?  Just an extension of time - or just additional costs?  If an extension of time and/or additional costs are to be awarded, do the parties use a change order procedure or is there a separate procedure to account for these claims?  Are there specific notice requirements for a party advancing a force majeure claim?  All of these questions should be answered in a good force majeure clause.

Parties should be aware that even where a force majeure event occurs, parties are not released from their obligations completely - they remain under a positive duty to take reasonable steps to mitigate the damage caused by the event.

So if you find yourself on the wrong side of Mother Nature, fires, epidemics, embargos and so on and need guidance as to whether you’ve got a valid claim for additional time and/or costs, look to the force majeure provisions of your contract. 

ASSISTANCE IN DEVELOPING A CONSTRUCTION CLAIM

Metropolitan provides valuable guidance in developing, analyzing, defending, and negotiating construction claims.  In the highly competitive engineering and construction industry, construction claims management has become an increasingly integral element to maintaining project profitability.  Our construction experts have successfully resolved a broad range of construction claims on a variety of projects located throughout the United States and internationally.

Although there are many programs available on the legal aspects of construction claims, few of these focus sufficiently on the practical aspects of claim entitlement, documentation, preparation, analysis, and negotiation.  .

Successful assertion of a construction claim depends on first establishing entitlement, then properly pricing the claim by assessing both direct and indirect costs.

Our construction experts guide and assist our clients in identifying and developing a basic claim "theme" that is consistent with the contract, the facts and established construction practices.

The experts at Metropolitan Forensics will:

·         provide leadership and support by analyzing contract requirements

·         provide assistance in assessing actual costs, project delays, and impacts when reviewing a claim

·         help identify and develop necessary documentation and data on the project to accurately express the client's claim "theme"

·         provide guidance in assessing claim options and counterclaims

·         assist clients in calculating the costs incurred by pursuing a claim

·         prepare claim text and exhibits and provide continuing support

 

ASSISTANCE IN CONSTRUCTION CLAIMS ANALYSIS

Metropolitan project review and construction claims analysis will provide an objective, independent appraisal of the strengths and weaknesses of a construction claim.

Our construction experts provide clients with significant insight as to their potential liability and accordingly, a recommended course of action. We help clients develop and implement effective strategies for either asserting or defending construction claims.

NEGOTIATING AND RESOLVING A CONSTRUCTION CLAIM

Metropolitan provides valuable guidance in the negotiation of construction claims so that clients may avoid costly litigation and still obtain an equitable claim settlement.

·         Our construction experts proven negotiation techniques facilitate active pursuit of the claim without creating excessive adversary positions

·         We assist in the development and pursuit of successful claim negotiating strategies

·         We lead claim negotiations as authorized by our clients and participate in settlement negotiations on behalf of our clients

Metropolitan Engineering, Consulting & Forensics (MECF)

Providing Competent, Expert and Objective Investigative Engineering and Consulting Services

P.O. Box 520

Tenafly, NJ 07670-0520

Tel.: (973) 897-8162

Fax: (973) 810-0440

E-mail: metroforensics@gmail.com

Web pages: https://sites.google.com/site/metropolitanforensics/

https://sites.google.com/site/metropolitanenvironmental/

https://sites.google.com/site/metroforensics3/

http://metroforensics.blogspot.com/

We are happy to announce the launch of our twitter account. Please make sure to follow us at @MetropForensics or @metroforensics

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