I heard a contractor recently tell me how he makes sure to place everything in writing, including change orders. As we talked more, I learned that he only puts change orders in writing when it will increase the amount of the contract. This strategy can be a bit short-sighted. All change orders, regardless of whether they increase the amount of the contract, should be in writing. Written change orders protect a contractor when someone else attempts to make the argument that the contractor went rogue and did something that was not asked of that company. When change Whenever possible, put it in writing.
Add Comment The article located at http:/www.jdsupra.com/legalnews/the-brief-fall-2012-vol42-no-1-75896/ reinforces the comments I made in a prior post regarding ESI. A business threatened with litigation must take immediate action to preserve not only paper documents that might be relevant to the anticipated litigation, a business is required to preserve electronically stored information (ESI) maintained by the company. If this information is not preserved by the company, then when suit is filed, a spoliation of evidence claim will likely be asserted claiming that the company intentionally destroyed relevant documents - - documents that the jury should presume would be adverse to the company. Even if a spoliation charge is not ultimately submitted to the jury, but the company is determined to have acted negligently in allowing ESI to be destroyed, the company may still be sanctioned by the Court, which could range from a monetary sanction to an inability to present evidence to defend the allegations being made against it. For a business that has never been sued before, or one that has never been on the receiving end of threatened litigation, it would certainly be prudent to contact an attorney with experience in business litigation that can guide the business in determining what information constitutes electronically stored information that needs to be preserved. In turn, it may become necessary to retain a computer specialist that can compile and image all the company's ESI so that it can later be produced, if necessary, in the anticipated lawsuit. In short, if litigation is anticipated, a business should take immediate efforts to preserve ESI, or face potentially losing the war before the first battle is fought. A business owner dealing with an employee accident or contractor injury on its premises will likely face some investigative action by OSHA. If you are the company's designated representative to investigate employee/contractor accidents, remember that early notification of legal counsel is the key to protecting the company. Counsel can immediately assist in securing the scene, notifying OSHA, preparing for media inquiries, identifying and interviewing witnesses, and addressing liability insurance and property damage issues. A client's prompt retention of legal representation may even enable it to avoid an OSHA enforcement action or just as important, a liability lawsuit brought by the injured worker or his family. I have discussed previously a situation where a company client did not contact counsel promptly. Rather, that company, who did not believe the accident was a "serious" one, did not contact legal counsel until one week following a fall at the company's warehouse. When the attorney began his work on the file and visited the site, the new HR Director, believing he was doing everyone a favor, including OSHA, handed him written statements from at least a dozen employees, some of whom did not even witness the accident. The accident resulted from an alleged premises defect on the floor, and the written statements were inconsistent regarding what was seen and heard that day. Moreover, the statements referenced facts that were wholly unrelated to the witnesses' personal knowledge of the facts of the accident. In Texas, witness statements are discoverable, in the story above, when the contractor eventually sued the premises owner, the contractor's lawyer had ready-made access to at least a dozen "witnesses" with whom he could create inconsistencies, which in turn, directly impacted the businesses' ability to defend the claims against it. It should also be noted that the witness statements were also required to be provided to OSHA as part of OSHA's investigation. Needless to say, OSHA issues several citations that may not have otherwise been issued had these written statements not been procured. In addition, the lawsuit resulted in a larger than normal settlement for the injuries being claimed, in large part because of the inconsistencies in the statements. I have defended numerous companies over the years, and I like to think that a decent liability defense can be developed in most cases, but based on the story below, there are just some situations where the conduct defies reason. Of course, the injured teen is not entirely without fault. The story can be found at http://www.businessinsider.com/stomach-removal-due-to-liquid-nitrogen-2012-10. This story was originally published by journal.ie. Doctors in the U.K. have been forced to remove the stomach of an 18-year-old woman after she drank a cocktail containing liquid nitrogen. Gaby Scanlon, from Heysham in Lancaster, was celebrating her 18th birthday at a bar last Thursday when she drank the cocktail. She began to feel breathless and developed severe stomach pains before being brought to Lancaster Royal Infirmary at about 11pm where she was diagnosed with a perforated stomach. Doctors were then forced to perform an emergency operation to remove her stomach in order to save her life. Lancashire Police said the bar has now stopped selling the cocktail following last week’s incident, and that an investigation is underway. A police spokesperson said: “The investigation is still in its early stages and we are still interviewing witnesses to establish the full facts. “The premises involved have fully cooperated with all agencies and have suspended drinks involving liquid nitrogen.” Liquid nitrogen is a liquefied gas which vaporises at -196C and has recently become a popular method to flash freeze foods in kitchens. It also creates a cloud of vapour ‘smoke’, which can make cocktails attractive. However, it should only ever be used to chill glasses or freeze ingredients as it can cause rapid cold damage to flesh and tissue or lethal internal damage when ingested. It appears that Zurich is writing insurance coverage that pays for attorneys' fees if the covered party loses at trial or summary judgment. The "pilot program" was started in California, but has now been rolled out to Texas, Illinois, Florida, New Jersey, and New York. In Texas, if proper presentment is made pursuant to the Texas Civil Practice and Remedies Code, a party that is sued for breach of contract is responsible for paying for the prevailing party's attorney's fees. In commercial disputes, attorney's fees can often exceed the amount of the underlying amount in controversy. In addition, it is not uncommon for an attorney representing the plaintiff in a commercial dispute to threaten to run up the attorney's fees in an effort to squeeze the defendant into settling early to avoid the uncertainty of a considerably larger verdict following a trial on the merits. Coverage for "loser pays" attorney's fees would certainly counter any leverage the plaintiff had in negotiating a settlement based on the uncertainty of future costs and expenses. With this coverage, a business owner who is sued for breach of contract would be able to assess the company's risk based solely on the amount of the contract damages and not based on the uncertainty of what amount a jury might award for attorney's fees following a trial on the merits. I am interested in seeing a copy of the policy that Zurich has previously issued to see what exclusions exist. I am curious whether an insured's knowledge or notice of "potential" or "threatened" breach of contract litigation is excluded and how the policy defines those terms. In the commercial contractor setting, it is common for the contract between the general contractor or premises owner and the subcontractor to contain an indemnification clause and an insurance clause. In the subcontract, the general contractor will usually require the subcontractor to carry liability limits in an amount of at least $1 million dollars per occurrence. In addition, the contract will require the subcontractor to ensure that the general contractor is named on the subcontractor's CGL policy. The rub occurs when the subcontractor, in an effort to lower its premiums, agrees to a large SIR (self-insured retention) that I have seen as high as $500,000. If an accident happens and the general contractor is sued, it will certainly look to the subcontractor's carrier for coverage. However, even if the tender is accepted, the general contractor/premises owner will be subject to the same SIR as the subcontractor. Of course, the subcontractor can be sued for breach of contract for failure to comply with the terms of the contract, but that just means another lawsuit against a company that may very well be judgment proof. As a general contractor, make sure that the subcontract specifies that the subcontractor is required to obtain liability insurance naming the general contractor as an additional insured AND that the insurance will not include a SIR (at least concerning the additional insured). Once the insurance is procured, make sure that it is reviewed closely to confirm that it contains the specified liability limits, that it names the general contractor as an additional insured and not just a certification holder, and that it does not have a self-insured retention. It is Friday, and in an article from the Associated Press: PHILADELPHIA – A lawsuit says that a bachelor party mishap at a Philadelphia strip club landed the groom-to-be in a hospital with a ruptured bladder. The Philadelphia Daily News reported Friday that Patrick Gallagher had been invited to lie on the stage at the Penthouse Club as a dancer slid down a pole. The lawsuit filed last week in state court alleges the woman landed with such force on Gallagher's abdomen that his bladder ruptured. Gallagher, of Lansdale, needed surgery after sustaining the injury in November 2010. The lawsuit accuses the club of negligence and seeks at least $50,000 for medical costs, pain, humiliation and mental anguish. The Daily News was unable to reach the club's owner for comment. The Associated Press could not reach a club representative Friday morning. Read more: http://www.foxnews.com/us/2012/10/05/lawsuit-claims-philadelphia-dancer-pole-act-injured-groom-to-be/#ixzz28QuTLQgi I ran across an article explaining the personality trails of a good lawyer. The article was written by Marilyn Kennedy Melia and published on September 27, 2012 on bankrate.com. In it, here is what she writes about lawyers. Is it accurate? JOB: LAWYER How to tell: Watching the nightly news with you is a downer, because you tend to see everything from political upheaval to unusual weather as pervasive and uncontrollable. Your pessimistic nature is suited for the law. Why: If you're an optimist -- someone who views negative news events as "local, temporary and changeable," you have an attitude that will help you succeed in most professions, writes Martin E. P. Seligman in his book, " Authentic Happiness: Using the New Positive Psychology to Realize Your Potential for Lasting Fulfillment." However, being a pessimist is a plus for lawyers, Seligman writes, "because seeing troubles as pervasive and permanent is a component of what the law profession deems as prudence. A prudent perspective enables a good lawyer to see every conceivable snare and catastrophe that might occur in any transaction." It's this approach that enables an attorney to help his or her clients defend against any eventuality, Seligman says. However, this pessimistic trait doesn't have to be inborn because "law school will teach it to you," Seligman says. But it's a big reason lawyers tend to be more unhappy than other professionals, Seligman writes. I ran across a helpful article written in 2004 by from Glenda Wertz, a financial services broker (at least at that time) as American E&S, a specialty excess & surplus lines broker and MGA. She answers questions regarding the meaning of E&O insurance and who should obtain it. I have represented a number of companies over the years that thought they had sufficient coverage under the usual general liability policy package that learned later that there were holes in the coverage that could have been filled by a tailored E&O coverage. Most of the comments below are from Ms. Wertz article. The complete article can be found at http://www.insurancejournal.com/magazines/features/2004/07/19/44745.htm. What is E&O insurance? Errors and omssions (E&O) is the insurance that covers your company, or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. It is often called malpractice insurance or professional liability insurance. In short, E&O coverage provides protection for you in the event that an error or omission on your part has caused a financial loss for your client. Most E&O policies cover judgments, settlements and defense costs. Even if the allegations are found to be groundless, thousands of dollars may be needed to defend the lawsuit. They can bankrupt a smaller company or individual and have a lasting effect on the bottom line of larger companies. Who needs E&O insurance? Obviously, professionals such as doctors, lawyers, accountants, architects, engineers, etc. need E&O coverage. However, less thought about individuals range from advertising agencies to commercial printers, Web hosting companies to wedding planners. If you are in the business of providing a service to your client for a fee, you have an E&O exposure. Why does my company need coverage? By not purchasing E&O a company can be taking a serious financial risk. These types of losses are not covered under a general liability policy. And, as stated earlier, even if you are not at fault, litigation is both time consuming and expensive. There is no “one size fits all” E&O policy.Each policy must be read carefully to make sure that the coverage being offered fits your exposures, and a legal professional who specializes in insurance coverage and who knows your business should be consulted to examine the proposed coverage. In an article posted at http://www.jdsupra.com/legalnews/five-most-common-personal-injury-claims-16778/, that was originally written by a law firm representing personal injury claimants, the five most common personal injury claims are listed. I am quoting the article verbatim.
I have devoted a number of prior posts to the potential litigation potential that private businesses face from workplace injuries, slip and fall accidents, and defective products, and I have offered suggestions on how a business might choose to mitigate its risk of being sued, but more importantly, of being financially unable to continue operating the business. As set forth above, the risks are real. | 
 AuthorSince 1997, I have represented a variety of businesses, ranging from the commercial contractor to the large petrochemical plant, in the resolution of insurance coverage and commercial disputes, as well as construction defect claims and general liability suits brought by contractors and employees. I have also represented major insurance companies as preferred legal counsel, handling hundreds of first party insurance claims. I have served as lead counsel in a wide variety of cases, ranging from the simple non-subscriber accident claim to the complex insurance coverage and commercial dispute. ArchivesOctober 2012 CategoriesAll |
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