Put simply, third-party litigation funding (TPLF) is a quiet problem lurking in the construction industry’s background, threatening to balloon risk and liability to potentially unsustainable levels. And while Balfour Beatty believes the legal field plays an absolutely vital role in protecting all stakeholders in our industry, unchecked TPLF can only drive risk escalations through lengthy disputes, unpredictable outcomes and ever-increasing insurance rates.

Instead, with the right tools and processes, we believe risk can be effectively identified and mitigated or eliminated before it significantly impacts any project partner or lands in a courtroom. Our teams are best-in-class risk reducers, leveraging every advantage of our collaborative mindset, Zero Harm leadership and technical expertise to preclude or significantly mitigate financial or liability risks. On every project, we’re your advocates and partners, and we only succeed when you do.

TPLF and You

TPLF is not entirely without merit, but its implications can be quietly pernicious. The arrangement can provide access to weightier lawsuits for plaintiffs without means, but it always comes with strings attached. In the worst cases, the third-party financiers could even demand inflated rewards or direct a plaintiff to reject good-faith settlement offers, negatively impacting what would otherwise be a fair trial verdict.

As of 2023, TPLF represents $15 billion of U.S. investment by financiers otherwise unrelated to construction and development, and every dollar of inflated legal costs could easily represent a dollar required of end-user consumers. Even lawmakers and nonprofits are taking notice, with multiple bills introduced into Congress this year to curb the issue and organizations like the U.S. Chamber of Commerce pushing for reform.

The industry at large is pushing for various reforms – taxing TPLF earnings, mandatory disclosures and more – but it’s just as important that our clients and industry partners understand the problem we’re all facing together. Escalations spurred by TPLF necessarily increase many other downstream costs, from insurance to staffing, which contributes to greater risk for everyone as those escalations are ultimately passed from contractors to clients to end users.

Safety is Still First

Unfortunately, not even construction safety is immune. The lasting effects and chilling effect of TPLF, under which any minor incident could become a disproportionately costly verdict, contractors could actually be incentivized to cast a wide net with safety efforts rather than focusing on the most consequential construction risks.

So, while the TPLF industry undergoes its share of legal, governmental and public scrutiny, Balfour Beatty is fighting that incentive, doubling down on and even expanding the Occupational Health and Safety Administration’s (OSHA) “Fatal Four,” and proactively reducing risk at every possible turn. We know this is the best possible outcome for any project and, more importantly, for our people.

Throughout my 20-year tenure with Balfour Beatty, our foremost priority has always been Zero Harm, ensuring everyone on our jobsites returns home safely. In fact, our teams make an intentional effort to not only “mind our own house” on jobsites, but also to actively lead our trade and joint venture partners toward adopting our industry-leading Zero Harm practices that often exceed regulations.

Under the stellar leadership of Loss Prevention Senior Vice President Richard Ryan, we recently took a monumental step in the industry by expanding OSHA's “Fatal Four” construction safety risks to include an additional fifth risk – live traffic.

So much of our work is deeply embedded in our communities and occurs immediately adjacent to public vehicle and pedestrian traffic. Leading the industry in acknowledging the unique safety considerations incurred by live traffic is our responsibility, not just to our workers but to the communities we serve.

Our Zero Harm leadership neither started nor stops with live traffic and our “Fatal Five” expansion. Every day, our teams across the country are exploring new and exciting methods for protecting everyone who encounters our work, from cutting-edge digital alert systems to worker and equipment visibility lights to work zone legislation advocacy.

Balfour Beatty believes that project safety is our license to do business, but that safety, efficiency and technological innovation are not competing goals. From simple but effective improvements to the more ambitious applications of AI, we sieve every new tool and process through the question of what actually makes our projects safer day-to-day. Our commitment to maximizing investment by rigorously testing new safety measures matters.

Every Zero Harm advancement we make reduces downstream risk, not only to the people we care about but also to our clients’ and partners’ bottom lines by mitigating potential liability and its associated costs in insurance and judgements. As we identify and test safety improvements, we also take pride in collaborating with our peer contractors through U.S. organizations like the National Construction Safety Executives (NCSE) on the principle that a safer industry should improve all contractors’ practices.

I take tremendous pride in knowing that the construction industry is a safer place for Balfour Beatty’s leadership and innovation. We care about our people, our partners and our client stakeholders above all else, and nothing else matters if we don’t take ownership of our Zero Harm values and return everyone home safely at the end of each day.

World-Class Collaborators

While less important to the industry implications of TPLF, it remains true that a significant amount of risk in any construction project could be mitigated by earlier and more complete collaboration. Thankfully, “early” and “complete” are the guiding principles of our processes as masters of collaborative contracting methods such as Construction Manager (CM) at-Risk, design-build, progressive design-build, Public-Private Partnerships (P3) and more.

Under collaborative models, our preconstruction and operations teams can leverage every advantage of early involvement to ensure that clients receive the best possible end product. Value engineering, material and design input, creative solutions, efficient scheduling and more all greatly benefit from a collaborative approach.

Here, too, innovation in both means and methods is often the driving force behind a collaborative advantage. Our preconstruction teams have long been industry experts in lean design principles and platforms like DESTINI Estimator, but recent advancements in AI and machine learning have led our teams to implement new and exciting tools like the collaborative project delivery platform, Join. The combination of our Relentless Ally mindset and maximally powered technologies is quite simply a supercharged preconstruction process, enabling lightning-fast collaboration between all stakeholders.

On the $140 million Sacramento Airport Pedestrian Walkway (SMF) CM at-Risk project, our team used Join to take on an initial estimate of $20 million over the project’s budget due to a 10,000-square-foot expansion from earlier designs and other added complexities. Using Join to fuel our collaborative preconstruction process, our estimators and design partners, led by Lead Estimator Jorge Vargas and Preconstruction Vice President Landon McQuestion, delivered a final GMP of $4,000 under the original budget.

Similarly, our team leveraged early collaboration through a formalized Partnering Charter to deliver the Sterling Natural Resource Center in San Bernardino, California. Our progressive design-build leadership and ardent client advocacy were instrumental in delivering the project on time, under budget and surpassing the facility’s ambitious criteria for design excellence and net-zero operations.

The power of our Relentless Ally collaborative mindset is ultimately greater cost and schedule certainty and community engagement, both of which represent overall savings in both financial and social capital. Every preconstruction decision made confidently and with better information helps reduce downstream risk for our trade and design partners and our clients.

It’s more than just the tools we use to get there, but our readiness to understand each client’s vision, collaborate on a clearly defined path to realize it and commitment to reduce risk at every step and by all means possible.

Reducing Risk Together

In a perfect world, construction is a risk-free industry. Every project proceeds undisturbed by the realities of complex scheduling, supply shortages or design issues and costs stay the same forever.

While we may not live in a perfect world, Balfour Beatty is no less committed to seeking perfection in the construction process – honing our collaborative edge, refining our Zero Harm safety processes and pursuing ever greater innovation in our preconstruction methods.

While others continue to advocate for the legal reforms that can reduce risk for all project stakeholders, we will continue to put in the hard work every day to eliminate risk across every facet of project delivery.