Law Times

lAw times • July 27/August 3, 2009 FOCUS PAGE 13 Privilege clause thorny Holdouts coming around Continued from page 9 "The risk," agrees Thurston, "is that any form of ethics or standards that have flowed from Ron will vanish and owners will have free reign to bid shop and that's not how we should do business." Houston says the privilege clause is a thorny one because in road building, for example, the issuing body would like to indemnify itself from everything, giving carte blanche to do almost anything. "This is a problem because in Ontario there's really only the Ministry of Transpor- tation," he says adding the result is an imbalance of power in which bidders are at the mercy of an omnipotent, unchallengeable entity. "It's about how the court balances those policies and considerations with the freedom to contract." He's also betting that in settling Tercon the SCC may in fact open up a new set of issues. "A lot of these anticipated cases end with a bittersweet taste," he says. "M.J.B. and Double N were like that. It's confounding if you're in the construction sector but great if you're a lawyer, I suppose. A client calls you and asks a question and you'd love to give them a perfect answer about the law, that's if it's X or Y, but then you have to give the equivocal answers which they hate and we hate giving." In any event, life before Ron wasn't a disaster, he says, and if the SCC undermines the case then the construction industry will adapt. "This industry is always going to adapt, they've been doing it for years," he says. "It's like hockey, the rules change all the time. Each game is played under a specific set of rules but they evolve. Bidding has been going on for thousands of years." In fact, he says, there's been more litigation post Ron than before it. Thurston, however, isn't so confident the industry will simply adjust if Ron dies. "The landscape has changed from what it was 20 or so years ago," he says. "Con- tracts and jobs are so much more complex. We can't just go back." LT Continued from page 9 unforeseen liabilities from the get-go. "Many institutional owners and mu- nicipalities are accepting the CCDC docu- ments as the de facto standard," he says, and that's having an overall effect of lower- ing costs and increasing transparency. Still, some are not adopting it, such as the City of Toronto which Thurston says is a lost cause: "We've given up on them frankly and the City will continue to attract fewer bid- ders and pay higher prices as a result." Other holdouts are coming around how- ever, including the City of Hamilton which is facing huge cost increases on its upcoming infrastructure projects because of a clause in the Ontario Labour Relations Act which trig- gered when four carpenters joined the United Brotherhood of Carpenters and Joiners. Since the four joined the union, now un- der the OLRA, any contractors doing any industrial commercial institutional work must be affiliates to the UBCJA. No non- union contractors can be and while the initial additional costs were projected at between $4 million and $10 million a year on the ongoing work, the large infrastructure proj- ects coming up for bids could cost $440 mil- lion more according to a Hamilton city staff report. Already a water treatment plant res- toration came back 83 per cent higher than the original $29-million estimate and it was not awarded and is out for rebidding. To offset those overruns, the city is working with the union and looking at accepting CCDC contracts as a standard so that contractors can shave costs and get a better handle on liabilities. "Hamilton, for example, told us in 2007 that they would not go to CCDC 2 'until hell froze over,'" says Thurston. "It's interesting to see what is happening now." Other professional associations such as the Consulting Engineers of Ontario and the Ontario Association of Architects have also endorsed the use of standard contract documents with a set of recommended supplementaries. "The key really is in the supplementaries and how they are used and written," Thurston says. "The pricing contract is only 29 pages but I've seen 50 to 100 pages of supplementaries." LT Better Results Faster GET THE WESTLAW® CANADA ADVANTAGE Westlaw Canada has deep legal content needed to support your practice plus functionality to help you find the information you need faster. Search a legal issue using the exclusive Author commentary and selection of leading case law and applicable legislation on the Canadian Encyclopedic Digest, 4th Edition. Then move seamlessly to all the most recent cases in the Canadian Abridgment. Go even deeper behind the case law with access to thousands of court documents. This powerful connection leads you straight to your research goal, giving you better results faster. www.westlawcanada.com Call toll-free 1-800-342-6288 ext. 5811 In Toronto 416-298-5141 ext. 5811 13024-A9417 MM2 07/09 Untitled-3 1 www.lawtimesnews.com 7/20/09 2:23:47 PM

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