Deborah Ballati is a nationally recognized construction law partner at Bay Area law firm Farella Braun + Martel, which has offices in San Francisco and St. Helena.

[caption id="attachment_40167" align="alignright" width="224" caption="Deborah Ballati (Swanda & Schindler Digital Photography photo)"][/caption]

Ms. Ballati has extensive construction litigation experience and represents companies involved in virtually all aspects of the construction industry, including owners, contractors, design professionals and subcontractors. Her cases have included delay and defect claims arising out of commercial, residential and heavy civil construction projects, contract drafting and negotiation, and insurance matters related to construction.

She has received two high-profile recognitions so far this year. In February, she became the first female president of the most prestigious legal association for construction attorneys, the 21-year-old American College of Construction Lawyers (ACCL). She has been a fellow of the organization since 1997. In May, legal industry publication Daily Journal selected her for this year's Top 75 Women Litigators in California list.

As president of the group, Ms. Ballati is leading initiatives that will have a significant impact on the organization and on the construction industry as a whole. Her tenure has been defined by a focus on global issues of importance to the construction industry and reaching out to industry leaders to tackle them.

"The ACCL is looking into concrete ways to use its expertise and relationships to engage with other organizations to facilitate assistance to developing countries in the area of construction," Ms. Ballati said. "This initiative grew out of the disaster in Haiti a few years ago."

Ms. Ballati spoke with the Business Journal about the state of construction law in the Bay Area and significant legal trends for the industry.

What are the most common legal pitfalls for construction?

Deborah Ballati: Too little focus in the planning stages on what might go wrong during construction and how it will be addressed when it does. After more than 30 years dealing with construction claims and claim resolution, I have found that the best-run projects are those in which the project participants -- owners, designers, contractors and subcontractors -- had a good understanding of what would be needed to get the project done, who could best manage and control the risks that might get the project off track, and what cost effective mechanisms were available to manage the risk.

What are the top recent law and public policy changes affecting Bay Area construction?

Lack of funding and continued concern about the economy are two of the biggest drivers right now. Despite the indisputable need for investment in infrastructure at the local, state and federal level, lack of confidence in the economy continues to cripple projects. The recent work stoppage on airport projects caused by delay in passage of an FAA funding bill in Congress is just one example of this problem.

Project participants are becoming even more focused than in the past on early pursuit of compensation and relief for breaches or presumed breaches of contractual obligations. That focus has spurred earlier draws on bonds, letters of credit and other forms of financial guaranties, and greater emphasis on pursuit of insurance and involvement of insurers in claims.

How much easier or more difficult has it become for recourse?

Two things have made large construction matters easier to resolve today than in the past: greater sophistication of the key project participants about the significant cost in time, money and company resources inherent in an unreasonable approach to dispute resolution, and the increased presence in the market of mediators and arbitrators who are knowledgeable in construction. These two factors have mitigated the difficulties caused by the diminished availability of courtrooms caused by the budget problems in California and elsewhere.

How has industry contract law been changing?

Recent changes in the law dealing with indemnification of one project participant by another have impacted contract negotiations in a significant way in the last few years. Fears about defaults by contractors and subcontractors have increased the emphasis on surety bonds, insurance and financial strength.

From your perspective, what has been the impact of new environmental-protection requirements at all levels of government?

These requirements, while clearly important for our society as a whole, have increased the cost of constructing projects, whether it be new construction or renovations and remodeling. At the same time, some of these laws have created work in the areas of plant retrofit, energy and alternative energy systems and water quality.

Additionally, allocating responsibility for addressing environmental requirements has become a major focus in the contract negotiations between owners -- whether public or private -- developers and contractors of contracts for construction on property known or suspected to be contaminated. Reasonable allocation of these risks, and the purchase of environmental insurance that is available to address some of those increased costs, are two of the best ways to manage this impact to avoid greater losses of time and money when the environmental conditions are discovered.

What are significant legal issues on the horizon for the industry?

The increasing emphasis on construction safety standards we have seen recently is likely to continue. The enactment of new, stronger standards applicable to crane operators and riggers, and increased criminal prosecution of individuals and companies for safety violations which have caused injuries and deaths on construction projects are only two examples of this trend.

There is more emphasis on internal and external training of employees about safety and institution of more rigorous standards for control of the job site.

Is there anything else you would like to add?

Focusing our efforts at the local, state and national level to encourage more construction projects in the next five to 10 years will be one of the best ways to truly stimulate our economy. While those efforts are under way, they aren't moving fast enough. More can be and should be done to get California and the nation building again.