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CLIENT ALERT: HB 159 - Regulatory Indemnity Provisions in Public Works Design Contracts

Representative Louis W. Blessing III (R-Colerain Township) recently introduced HB 159 to regulate the use of indemnity provisions in professional design contracts related to public improvements.  The purpose of the proposed legislation is to prohibit public agencies from requiring design professionals to indemnify them from claims which are not attributable to negligent or other wrongful conduct on the part of the design professional.

Under certain existing state and local contracts, design professionals may be required to defend public entities against third party claims before there is a determination that the design professional has committed an error.  These “broad-form” indemnification requirements may also include a “duty to defend” where the design professional is similarly required to retain an attorney to defend the public agency against third party claims before any legal liability for the claim has been established.  These types of indemnification requirements impose obligations which are typically not covered by professional liability insurance which only applies to claims caused by the engineer or architect’s negligent conduct.

H.B. 159 attempts to bring indemnity obligations in line with principles of fairness and the availability of insurance coverage.  The bill acknowledges that while design professionals are legally responsible for damages caused by their own professional negligence, they should not be required to indemnify and/or defend a public agency for losses that he or she did not cause and which are uninsurable.

BMD will continue to follow this proposed legislation as it moves through the legislative process.

Additionally, you may reach out to your local representative to share your support for or opposition to this bill.

If you have questions or need more information regarding the potential impact of HB 159, please contact BMD's Construction Law Group, or contact:  Robert A. Hager, Justin M. Alaburda or Martin J. Pangrace.

 

CLIENT ALERT: New Opportunity Zone Incentives Promise to Spur Economic Development

Created as part of the recently passed Tax Cuts and Jobs Act, “Opportunity Zones” are designed to encourage long-term investments in underserved communities. By offering tax benefits to private investors who choose to invest their capital at the nexus of need and opportunity, the program supports a broad array of investments and offers opportunity for creative problem-solving strategies to address community needs. The program offers investors tiered tax benefits depending on the term of the investment, including a temporary deferral and partial reduction of unrealized capital gains, as well as the potential to exclude all future appreciation on the investment. The program is designed to tap into the estimated $6T+ of unrealized capital gains held by U.S. individuals and companies by incentivizing investors to re-invest that capital in low-income communities to spur economic development and job creation.

CLIENT ALERT: Medicare Trust Fund to Run Out of Funding Beginning in 2026, Likely to See an Increase in Audits, Overpayment Demands and Extrapolations

Pursuant to a Medicare Trustee Report released on June 5, 2018, the Medicare trust fund will run out of funding beginning in 2026, which is three years earlier than previously expected. Although the Trustee’s report requests that Congress and the President act with urgency to remedy this problem, in the short term, we expect to see an increase in government payer audits, overpayment demands, and extrapolations.

CLIENT ALERT: The European Union's New Data Privacy Law Goes Into Effect

On May 25, 2018, the European Union’s (“the EU”) new data privacy law went into effect. The General Data Protection Regulation (“GDPR”) concerns the processing of personal data that can be searched according to specified criteria such as geographical scope.

CLIENT ALERT: Class Action Waivers in Employment Contracts Upheld by Supreme Court

On May 21, 2018, in a 5-4 decision and a major win for employers, the United States Supreme Court upheld the legality of waivers in employment contracts that prohibit employees from grouping claims together in collective or class actions in favor of individual arbitration proceedings. See Epic Sys. Corp. v. Lewis, ___U.S.___ (2018).

CLIENT ALERT: Prohibition on Recoupment Prior to Exhaustion of Administrative Remedies

In April, the Fifth Circuit Court of Appeals, in Family Rehabilitation, Inc. v. Azar No. 17-11337 (5th Cir. 2018), held that district courts are authorized to enjoin the Centers of Medicare & Medicaid Services (“CMS”) and its contractors from recouping alleged overpayments prior to the completion of the administrative appeal process.