Legal issues facing the construction-equipment industry

As with any industry, the construction-equipment industry has its fair share of legal issues and challenges. Staying on top of potential legal issues and understanding a company's legal options can help ensure that construction projects are successful for all involved.

Construction-Equipment Liens

A construction-equipment lien, also known as a mechanics lien, is a legal remedy that those in the construction industry can use to secure payment for services or materials provided to a project if an account has fallen into delinquency.

While the specific rules for construction-equipment liens vary wildly by state, this general rule applies: Individuals or companies that provide labor, materials, equipment or services to projects in which real property is improved are entitled to secure a claim by filing a lien against the property if the document is filed soon after the equipment or services are furnished. To exercise this legal option, parties are often required to send a preliminary notice – also known as a pre-lien notice or notice to owner – at the start of the construction project.

Filing a lien helps ensure payment by encumbering a property, making it so that the property can't be sold or transferred before the lien is addressed. Construction-equipment liens also attract the attention of the project's financial lender, who often steps in to demand action. Filing construction-equipment liens also sets a firm deadline for repayment, so injured parties don't have to look forward to a seemingly endless wait to get paid. Best of all, when filed correctly in accordance with state construction laws, construction-equipment liens are exceptionally hard to challenge.

Construction-Equipment Industry Safety Standards

The construction industry is subject to an industry-specific set of safety standards developed by the Occupational Safety and Health Administration (OSHA), which is the main federal agency tasked with the enforcement of workplace safety and health legislation. Safety standards provide guidance on a wide variety of situations that could occur in the construction industry. Standards mandate fall protection for employees working at heights greater than 6 feet; protections for employees working in confined spaces; training for employees using stairs, ladders and equipment; and adequate illumination. Safety standards also require the posting of accident-prevention signs and tags, and the availability of personal-protection equipment and emergency eye washes.

Complying with all applicable safety standards can help projects stay on schedule and prevent employers from being subject to citations, fines and lawsuits.

Mergers and Acquisitions

Mergers and acquisitions were a persistent theme in 2014 that carried into 2015. There were several significant merger-and-acquisition deals in 2014, including the merger of AMEC and Foster Wheeler, SNC-Lavalin’s acquisition of Kentz and AECOM’s acquisition of URS. Those three “mega-deals” alone accounted for more than $11 billion in transaction value. Building Design and Construction anticipates that such large-scale mergers will continue, as companies pursue a global presence and seek to secure larger projects.

Warranty Issues

Construction-equipment warranties make up a complex segment of construction law that deals with state-of-the-art technology, cutting-edge science and engineering. Common warranty claims include complaints about vehicle and load stability, operator restraints, machine control features, visibility and accident avoidance, and rollover and tipover resistance. Detailed knowledge of industry standards developed by associations such as  ANSI, ASTM and SAE is essential. To avoid equipment-warranty litigation, companies must maintain safety standards developed by organizations and agencies such as OSHA, National Institute for Occupational Safety and Health, and the Mine Safety and Health Administration. International companies may also be subject to European Union directives and foreign construction-equipment industry associations.