Elizabeth Manning is the managing editor of Construction Business Owner magazine.
Addressing the legal implications in the aftermath of the tragedy
On March 15, 2018, a pedestrian bridge undergoing construction at Florida International University (FIU) in Miami, Florida, collapsed. The concrete bridge fell onto moving traffic below, killing six people and injuring 10.
The 174-foot span that made up the main portion of the unfinished bridge was supported by a concrete pylon at either end. The 950-ton piece was unsupported in the middle at the time of the collapse. From what we know thus far, the bridge fractured when two diagonal concrete trusses at the north end of the structure separated from the bridge’s canopy.
The project, headed up by FIGG Bridge Engineers and Munilla Construction Management, was approximately $2.6 million over its $9.4 million budget at the time of the collapse. It was also running behind schedule due to design and engineering changes. Two days prior to the collapse, the lead project engineer noted cracks in a prefabricated segment at the north end of the bridge that would later crumble during the collapse. At the time of publication, five lawsuits had been filed against the general contractor, subcontractors and project owner.
Events like the bridge collapse are worst-case scenarios that contractors spend their entire careers trying to avoid. If anything good can come out of tragedy like this, it can serve as a reminder of how important in-depth safety training, comprehensive risk-control processes, circumspect reporting and clear communication can be on any construction jobsite.
To gain insight into what can be learned about the legal implications of the collapse, CBO spoke with Francis J. Haynes, a partner and chair of the real estate industry team at Lewis Roca Rothgerber Christie, and Quinn Murphy, a litigation and construction attorney and head of the construction industry team with Sandberg Phoenix & von Gontard. See their insights below.
CBO: What do you think the biggest challenges will be from the perspective of FIGG Bridge Engineers and Munilla Construction Management?
FJH: The first order of business would be for each of these two organizations to provide notification to their insurance carriers. Most large-scale commercial projects require large-scale coverage, but that does not mean that exclusions won’t apply. The largest legal challenges may arise from the breadth of exclusions in the insurance coverage, and claims may pose some significant degree of commercial exposure.
QM: The project engineer will try to establish that the design components were good, and that the collapse was attributable to defective construction rather than design. On the other hand, the construction team will attempt to prove that it built the bridge based upon the project plans and specifications, and consequently, the collapse was the result of negligent design, and not construction. While it is legally possible that both design and construction teams could be found negligent, most juries lean toward finding one or the other primarily to blame.
CBO: What kind of effect will the lawsuits surrounding the collapse have on construction litigation moving forward?
FJH: Even prior to this incident, there has been a pronounced trend toward requiring waivers of consequential damages and liability caps both for commercial and covered losses. I expect this trend will continue in the design professional and large contractor arenas, which could significantly impact the outcome of any potential future litigation.
QM: The effect of the bridge collapse will be primarily one of media exposure. All named defendants will have their company names associated with a nationally known incident. If the case is tried and a significant judgment is entered, liability insurance rates could be affected. In theory, our laws are intended to create incentives and disincentives for behaviors. So, if a large judgment is entered, the message that goes within the industry is that inspectors should scrutinize projects more stringently, contractors should prosecute their work more cautiously and design professionals should more diligently create designs to avoid similar incidents in the future. Effectively, the message will be for industry participants to “measure twice and cut once” within their particular area of expertise.
CBO: What are the most important lessons construction business owners can learn from the collapse?
FJH: These types of claims are catastrophic in terms of the amount and type of damages. Proper coverage can be costly but necessary as insurance carriers spread the risk of loss over the entire industry. To agree to reductions in coverage or select the wrong type of coverage are common mistakes business owners may make if they do not take the time to understand the implications or secure appropriate counsel.
QM: While economics has a big impact on project planning, contractors cannot lose sight of the potential downside associated with basing project decisions solely on economic factors. All contractors hope they never have to deal with an incident like the Miami bridge collapse, but smart contractors will take measures to mitigate the risk of such an incident through liability insurance and through the corporate discipline of regular risk management audits and corporate
CBO: In what areas do you see AEC professionals/business owners severely lacking in coverage or strategic planning?
FJH: As noted above, it is critical to ensure that broad coverage is purchased. AEC professionals will attempt to seek the limitations on liability, as mentioned above, but I don’t recommend its application to covered losses.
QM: New contractors often initially lack the resources to perform proper risk management and corporate structure planning. As the contractor’s business grows and it becomes more successful, he/she often never revisits the organizational structure and whether liability has been appropriately limited through organizational planning. Through time, we often see contractors adopt an “Our method has worked well for us so far, so why change it?” approach, which leads to functioning in a manner that does not appropriately contain their organization’s liability. Then, an incident like the Miami bridge collapse occurs, and they come to realize that their entire organization and assets are exposed to a jury that could wipe them out with one large verdict. More prudent contractors conduct regular risk management audits and organizational planning to limit their exposure in the event a large scale incident occurs. It is these contractors that can survive an event like the Miami bridge collapse.