Staying Away From Project Lawsuits

You’ve started the project or project phase, had a kick off meeting with the client /contractor/vendor, everyone has shaken hands to seal the deal, you’re excited and happy, as this will be the best project ever. You have a working relationship with the other parties and the project starts smoothly. The project is underway when something happens, the other party has issues with you and a lawsuit is coming your way. It doesn’t take much for the project to turn sour and animosity set in. The majority of projects do not turn out this way, but you can not predict the future so you have to be prepared.

Keep Your Fingers Out Of My Project

It doesn’t have to be you that turns the tide, it could be anyone associated with the project that sets the project awry. I had a construction manager, trying to make a name for himself, pick a fight with one of my contractors. In that case it became a paperwork war rather than a lawsuit, but the lawsuit potential was there. In another case, we were partners with a construction company on an engineer, procure, construct (EPC) contract. We did the engineering and construction management while the contractor did the mechanical, civil, structural construction. The project was a new process and the owners had to raise money in the financial markets. The owners obtained a fixed price quote from the engineering company I was with, then went to the venture capital markets to raise funds. The problem was, this plant was the first of it’s type to be built and our management had developed the contract, scope of work, and cost estimate with the contractor. The owner did get his funding and once work started we soon realized how poorly written the our contract with the contractor was. The contract/scope was so poorly defined there was a steady stream of requests from the contractor for extra money. It got so bad we ended up being sued by the contractor with all project members having to go through the discovery process.

It Can Happen To Anybody at Anytime

It’s not just consultants or contractor’s as, vendors can have problems as well. If the equipment doesn’t work as specified or there is a catastrophic equipment failure, (like the hydro-generator we installed that went up in flames shortly after start up), the lawyers could get involved. Things happen and if it is a costly warranty issue the questions and the lawsuits start. Was it installed properly? Was it started up properly? Was the contractor familiar with this type of equipment? Where the installers properly trained? Plus a myriad of other questions. Everyone is trying to protect his interest, which is understandable.

Be Proactive

The thing is, since you never know which project will end up in a lawsuit you have to treat every project you do as if it will end up in a lawsuit. To protect yourself, you have to be proactive. You should follow your companies project procedures. They are in place for quality and to protect the company in the event of a lawsuit. A simple example procedure is the use of transmittals for all items sent out of your office. You have to know who got what information and when they got it. Taking shortcuts could land you in trouble. There are always times in a project where it is expeditious to bypass a procedure, but these end up being the moves you later regret having done. This is where experience comes from. You should be keeping good notes about what transpires on a daily basis. Keep even better notes of critical events. Keep your supervisor informed of anything that seems out of the ordinary. Never hesitate to discuss issues with your company lawyer. Use appropriate well trained people for the job. Make sure the vendor’s warranty will stand up. Use common sense. These should be some of your standard operating procedures on projects.

What Will Happen To Me?

If you ever get involved in a lawsuit, your note books and e-mails will be subpoenaed. This means you should not be writing incriminating comments in your notes or anything else that could be used against you. If you have contentious issues to discuss do not do them through e-mail, but have a face to face discussion. Look at the the e-mails you get every day. They come to you with incriminating statements in the threads. People just forward anything. Clean up your e-mails before you forward them. Do not put anything in the e-mails you send that can be used against you or your company. Your company procedures should provide a document trail. If not then you should develop your own. If you end up in a lawsuit, you want to have sufficient information to deflect the claims against you or your company. I once worked for an owner who did not believe in lump sum contracts and only did time & material work. They felt the work required for progress monitoring and all it entails to protect themselves from lawsuits was not worth the extra cost. They worked with contractors they trusted and paid the bills. No lawsuits, no problems.

To protect yourself, be proactive, follow procedures, watch what you write in your notes, and send out in e-mails. Use common sense, as you never know when you will end up in a lawsuit.


General Address

Project Management Association of Canada

455 boulevard de la Gappe, Suite 201
Gatineau, Québec
Canada, J8T 0E1

Phone: (819) 410-0427

PMAC Certification Body

Project Management Association of Canada

Box 58043, Rosslynn RPO
Oshawa, Ontario
Canada L1J 8L6

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