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Katrina liability limits sought
Newspaper report says workers making federal repairs after hurricane seek protection from lawsuits.
September 20, 2005: 7:33 AM EDT

NEW YORK (CNN/Money) - Contractors working on federal contracts to repair damage caused by Hurricane Katrina want to limit their liability from lawsuits, according to a published report.

The Washington Post reports that a trade group for contractors is drafting legislation to seek such protection from lawsuits over work to repair levees in New Orleans, pump water out of the city and other emergency repairs. The newspaper reports that the Army Corps of Engineers and the Federal Emergency Management Agency have relied on contractors, including several who started the emergency work without a contract.

But the Post reports the contractors are worried about a repeat of lawsuits filed against construction firms that helped clean up the World Trade Center after the Sept. 11, 2001, terrorist attacks.

"We're asking for some reasonable limits for going into the Gulf Coast and dealing with unknowns," Michael Kennedy, general counsel for the Associated General Contractors of America, told the newspaper after a meeting of the trade group in Washington. "A contractor goes into an unknown situation to remove debris or fix a utility line, and three years from now someone decides they did it improperly."

More than a dozen companies already have contracts for at least $2.8 billion in repairs during the next year, according to the report, and more reconstruction work is on the way.

The trade group's proposed legislation would limit contractors' liabilities but still hold them responsible for following government regulations, Kennedy told the newspaper. It would be similar to regulations the Homeland Security Department unveiled last year that protect companies selling security technology from lawsuits triggered by a terrorist act.

The Post reports that legislation was introduced in the House last week to shield volunteer contractors from liability. The general contractors' bill would extend the coverage to companies working under the government.

On Sept. 8 President Bush issued an executive order allowing federal contractors rebuilding in the aftermath of Hurricane Katrina to pay below the prevailing wage.

For a look at lawsuits expected to be sparked by Hurricane Katrina, click here.  Top of page

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