Law Times

PAGE 12 FOCUS July 27/August 3, 2009 • lAw times as a consequence of the reces- sion, disputes over projects are on the rise. But it doesn't necessarily mean there's going to be a flood of cases clogging up the courts — the outcome of Tercon Con- tractors Ltd. v. B.C. Ministry of Transportation and Highways and the status of R. (Ont.) v. Ron Engineering notwithstanding. As Kenneth Movat, a spe- cialist in construction law at Gowling Lafleur Henderson LLP notes, during slow times contractors and owners alike have more time and appetite to engage in litigation, but the better news is that they're get- ting smarter about how they deal with those disagreements. "Every dollar becomes more important and they have time to chase them," says Mo- Lawyers make work for idle construction hands W BY IAN HARVEY For Law Times ith the inevitable slowdown in con- struction activity vat. "Unlike other areas of law though, they're fighting almost always about money and they are motivated to settle and move on. When they're busy, owners and contractors are more likely to pay off or not go after someone because they want to get to the next job." Indeed, that's both good and bad, as Supreme Court of Canada Chief Justice Beverley McLachlin told a seminar on construction law earlier this sum- mer, sponsored by Osler Hoskin & Harcourt LLP to celebrate construction law specialist Har- vey Kirsh's 25 years of publishing the Construction Law Letter. He is also author of Kirsh and Roth: The Annotated Construction Con- tract (CCDC 2 -1994). She said fewer and fewer construction cases were reach- ing the courts because those matters were being resolved by judges before trials or being sent to mediation, arbitration, or al- ternative dispute resolution. Still, she said, the downside looks different than it used to," she said. "It may not be dead, but new branches are not appearing as often as they once did. And old branches that need prun- ing are being neglected. Fewer and fewer construction cases are reaching the courts where the law is developed." The root causes are painfully Harvey Kirsh's 25 years of pub- lishing the Construction Law Letter was recently celebrated. is that there's not much in the way of new law or ruling – or certainly not enough to allow the branches of that sector of law to grow and flourish be- cause when the parties settle, there's no case generated for others to build on. "The construction law tree apparent, she conceded: com- plexity, time, the need to pre- serve business relationships in the long-term, the fear the court may not have the expertise in construction law, flexibility be- cause ADR can go outside the box, and confidentiality. "Litigation tends to suffer from the fact that it is unpre- dictable, very expensive, and filled with delays," noted Kirsh at the same seminar. "We are sometimes amused at the fact that the time it takes to litigate a large and complex construc- tion claim is sometimes longer than the time it took to build the project in the first place." Indeed, ADR is fast becom- Keep on top of the latest in bankruptcy and restructuring Canadian Commercial Reorganization: Preventing Bankruptcy Designed to help you manage or avoid bankruptcy by keeping you up to date on the legislative and judicial changes. This resource helps you understand both the and the . Looseleaf & binders (2) • $229 • Releases invoiced separately (3/yr) P/C 0413030000 • Vol. 1/2 ISBN 0-88804-147-0/-294-9 Bankruptcy & Insolvency An easy-to-use electronic service that keeps you up-to-date with the latest decisions in bankruptcy and insolvency law. 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"I think that with bank- ruptcies up 31 per cent here in Canada last May, these are tough times and the dominos are falling," he says. "It's having a ripple effect in construction, especially design-build, where people are more conservative now and more likely to resort to things like registering liens with increasing frequency to protect their rights." ADR or mediation does not however, cut costs, though it may cut time and prevent delays, agree Houston and Movat. The advantage, they say, is that in choosing the adjudicator it's much less of a roll of the dice. In the courts there's no way to control which judge will seize the matter and the parties could end up spending more of their time trying to bring them up to speed on the latest devel- opments in construction law and current industry practices. "In one case we had to bring in little models of equip- ment to help explain it to the judge," says Movat. By agreeing on an adjudica- tor the parties are comforted by the fact that the person selected will have a track record in con- struction, know the law and practices, and can move quickly to the meat of the matter. Still, says Movat, for smaller amounts there are other venues such as Small Claims Courts, where the threshold increases to $25,000 from $10,000 next Jan- uary and for cases up to $1 mil- lion or so the Constructions Lien Act is an extremely useful tool. "In Toronto we have a great group of experienced con- struction masters," says Movat. "And I love acting for a plain- tiff under the Construction Lien Act because of that." Clive Thurston, president of the Ontario General Con- tractors Association, says ADR is by far the better option than going to trial. "It's what I've been recom- mending to our members," he says. "My old daddy used to say going to court was a crapshoot. It's really got nothing to do with whether you're wrong or right, first you have to educate the judge. 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• Cover
• LSUC Honours
• The Associate
• Focus On Construction Law