Construction Firms Could Face Heavy Liability Damages

Aug. 23, 2007 -- The construction firms responsible for dismantling the former Deutsche Bank building will likely face substantial financial liability after a nightmare six-day stretch that left two firefighters dead Saturday, and three people injured today, including two more firefighters and a construction worker.

Robert Clifford, a lawyer specializing in construction accidents, said he expects the City of New York, the Port Authority and perhaps several other governmental organizations to undertake an exhaustive investigation into the ultimate causes of last weekend's deadly fire and today's falling construction tool.

"Once they determine the cause of the collapse they will then pretty much chart out a pathway of liability for who will be held responsible for the injuries and deaths that have occurred," Clifford, a senior partner at the Chicago-based Clifford Law Offices, said.

Liability for the deceased firefighters alone could stretch into the millions once their future earnings potential and family obligations are considered, according to Ken Halperin, an attorney specializing in liability work.

The list of firms facing financial liability could be quite long. Clifford led the prosecution on the high-profile collapse of scaffolding at Chicago's John Hancock building in 2002 that left three people dead and eight more injured. In that case, he said, the manufacturer of the scaffold, the owner of the building, its architect, and the general contractor on the job were all held financially liable for a total of $75 million.

And the contractors may also face charges of negligent homicide in conjunction with Saturday's deaths, news outlets have reported. These charges might follow if it is found that broken standpipes, which if functional could have spared the firefighters' lives, were improperly inspected or maintained.

The New York City government is responsible to its firefighters through workers' compensation programs. Clifford said that firefighters and their families normally cannot sue their employer, the New York Fire Department, through the court of law, though they can appeal to their employer for the amount of compensation they receive.

Bovis Lend Lease is the general contractor in charge of demolishing the Deutsche Bank building, which was irreparably damaged from the Sept. 11 terrorist attacks. A liability case may ultimately turn on how negligent they were in conforming to safety codes on the job site.

Prosecutors may have to jump through some legal loopholes to prosecute the firm actually conducting the demolition work. The New York Times reported today that The John Galt Corporation, hired by Bovis last year, appears to be a corporation in name only. According to the Times it was apparently set up by the Regional Scaffolding and Hoisting Company to "insulate the assets of a parent company from the enormous potential liabilities of demolition work."

But Halperin said these types of legal arrangements likely will not prevent the victims from receiving compensation. He said that whoever was working on the building would have had to take out insurance on the demolition.

"To avoid civil liability you can set up ten thousand companies, but somebody's got to take out insurance," he said.