The intensification of condominium and residential construction and associated need for infrastructure and transportation in Ontario has led to notable developments in construction and infrastructure law. For those interested in the legal framework governing the construction process, the Ontario Bar Association recently held a seminar where industry practitioners offered insight into the evolving landscape of procurement law, professional liability, construction lien actions, construction contracts, and engineering agreements. Here is a summary of the highlights:
Expert witnesses in professional negligence cases
The use of expert witnesses in construction and professional negligence cases has increased in recent years. In particular, claims consultants have become vital in construction disputes involving delay. As well, expert testimony is generally required in professional negligence cases to establish the applicable standard of care and to identify whether there has been a breach of that standard. As a best practice, retain any experts early in the process to inform your advice on litigation strategy and exposure. It is imperative to ensure that any experts are knowledgeable about the provincial standard of care and requirements for giving expert advice, most importantly, regarding their duty in giving expert evidence. Before engaging an expert, it is advisable to read the cases they have been involved in, along with their academic publications to ensure there have been no previous issues of credibility or impartiality.
Settling complex construction lien actions
Early assessment of the merits and the key issues in a complex construction lien dispute is crucial. Options for speeding up or slowing down the dispute resolution process include a motion to stay pending arbitration, a Tolling Agreement with key construction project participants, early mediation, snap shot discoveries, or an application rather than an action to narrow down the legal issues. Consider asking opposing counsel for an early resolution meeting, a “without prejudice” meeting, drafting a statement of settlement on issues, creating a vetting committee to review timeliness and quantum of lien claims, or negotiating a mediation agreement to reduce time and cost.
Notice provisions in construction contracts
The typical claim with respect to notice in the construction context is that a delay in a project (such as design related issues, permits or site availability) increases the cost to complete it, thereby entitling the wronged party to an amount of damages needed to compensate for the increase in time and cost. Recent case law indicates that courts strictly interpret notice provisions. For instance, in Ross-Clair v. Canada (2016), the Ontario Court of Appeal refused to consider anything outside the 30-day window set out in the contract, and found that the claim was barred by the failure to comply with the contractual requirements. Similarly, in Ledore Investments Limited (Ross Steel Fabricators & Contractors) v. Ellis Don Construction (2017), the Ontario Court of Appeal dismissed a contractor’s notice claim, as it did not meet the standard of a “claim made in writing”. In both cases, the Court of Appeal gave little consideration to whether prejudice was caused by the delay, and strictly enforced the contractual provisions. Parties to a construction contract should accordingly give timely, proper and sufficient notice, and should be conscious of all contractual notice provisions and any provisions limiting entitlement for compensation caused by delay.
Design consultant agreements
The recent trend in design and construction contracts is that owners are downloading risk onto those responsible for designing and building the projects. Engineers and architects, for instance, face significant pressure to assume an excessive amount of risk, and should engage in early risk management when drafting contracts. Options for mitigating risk include inserting language in the design consultant agreement to ensure an ordinary standard of care applies, limiting the extent of indemnity obligations and/or pricing the risk by ensuring the consultant’s fee is sufficient to provide additional resources needed to perform the work.
Whether entering into the tendering process, drafting a construction contract or attempting to resolve a construction lien, delay or design issue, parties should remain attentive to developments in construction and infrastructure law when evaluating their opportunities and risks.
About the authors
Courtney Raphael (Partner) and Dillon Collett (Articling Student), Aird & Berlis LLP