China: A Construction (PRC Firms) Overview

Challenges and Responses in Legal Risk Management for Construction Projects in an Era of Transformation

As the domestic economy enters a period of downturn, construction project owners (employers) are facing growing systemic risks to their projects. Achieving a coherent balance between construction quality, efficiency and project benefit has therefore become a pressing concern. In this context, project owners are increasingly required to develop forward-looking legal risk management frameworks and to engage legal advisors capable of effectively safeguarding project interests. This paper examines the challenges and major difficulties in current construction project legal advisory practice and proposes corresponding solutions. 

Construction project systemic risk requires in-depth legal advisory services

First, the complexity of construction projects dictates the level of legal advisory expertise required. Construction projects are characterised by high technical requirements, long duration, complex legal relationships, and diverse project participants. As a result, determining legal responsibilities for cost, schedule and quality can be particularly challenging. In addition, stricter industry regulations and inherent flaws in the domestic market, such as project affiliation, make it difficult to determine legal responsibilities. Furthermore, the types of evidence involved are diverse and often hard to preserve. Therefore, legal services cannot be limited to post-dispute “firefighting”. Instead, they must be front-loaded and maintained throughout the entire project lifecycle – from ensuring contract validity (eg, securing necessary permits and lawful tendering) to managing the performance phase (eg, handling change orders, claims, quality and safety controls) – thus forming a complete, closed‑loop system.

Furthermore, the evolution of project management models has placed higher demands on legal services. With the adoption of the design–build contracting model, the contract system and risk allocation mechanisms differ significantly from traditional construction contracting. The deep integration of design and procurement–construction processes, together with disputes arising from change orders and price adjustments under a fixed-price framework, presents significant challenges. Legal advisors are therefore required not only to be well-versed in the law but also to have a thorough understanding of construction project management and the client’s commercial needs.

In addition, economic downturns and changes in debt repayment methods have created entirely new risk scenarios. Project owners face pressures arising from the propagation of debt chains, and occurrences such as contractor bankruptcy and reorganisation are frequent. Ensuring the smooth implementation of projects under these circumstances requires legal advisory services with comprehensive expertise across multiple legal fields, including construction, finance, and insolvency law.

Finally, project owners are typically not specialised construction entities and often lack sufficient project management capabilities. They may have limited professional capacity in contract review, ineffective process control, delayed responses in contract performance, and insufficient evidence management capabilities. In particular, they often lack clarity on how to select and effectively engage legal advisors. The true value of legal advisory services lies not only in resolving disputes, but also in the foresight to anticipate and mitigate risks. However, many legal service providers remain confined to a traditional model centred on document review and dispute resolution, adopting a largely reactive approach. In practice, institutions that can both understand the underlying logic of construction contracts and provide legal services covering contract structuring and performance-stage management are relatively rare.

Response strategies for legal risk management in construction projects

We consider that legal advisory services for construction projects should shift their focus: from dispute resolution to risk management; from document review to value-oriented design; and from isolated, point-based handling to systematic framework building. The core idea of legal risk management in construction projects is the embedding of legal risk management into project management itself.

Contracts play a central and foundational role throughout the construction project management lifecycle. They are not merely legal documents, but serve as the “constitution” and “operating rules” of a project. From project commencement to completion, contracts define what is to be done, who is responsible, how the work will be carried out, how much it will cost, when it is expected to be completed, and how any issues will be addressed. The success or failure of project management depends on both the quality of the contract – whether its terms are clear, fair and operable – and the extent to which the contract is strictly enforced. Accordingly, the core of legal risk management in construction projects is contract risk management, namely, how to effectively manage and co-ordinate the relationship between the project contract, organisational structure and overall project management.

First, the project contract serves as the foundation for both organisation and management. The contract structure of a construction project reflects the relationships between the project owner and the participants, as well as among the participants themselves. Its core objectives are to optimise project cost and schedule, define responsibility interfaces, clarify risk allocation and align the project structure with the owner’s capabilities. At a strategic level, it addresses how the entire project is to be organised through a set of contracts. This includes the delegation model for design tasks, the contracting model for construction tasks, the arrangement of interfaces between contracts, the engagement of specialised subcontractors, and the procurement approach for materials. The contract structure – whether using parallel contracting, EPC, or general contracting – directly determines the project’s organisational architecture. For example, it affects whether the owner interfaces with a single main contractor or multiple contractors. Legal advisors can assist project owners in optimising the project’s contract structure.

Second, the project organisation functions as the mechanism through which both contractual obligations and management activities are carried out. The rights, obligations, and responsibilities stipulated in contracts require an effective organisational structure for their execution. Likewise, management processes and directives must be carried out through the project organisation. Because project owners often lack specialised construction management teams and relevant experience, they commonly engage project management service institutions to undertake the functions of the “three controls, three managements, and one co-ordination”. These functions include control of quality, schedule, and cost; management of safety, contracts, and information; and overall project co-ordination. If a construction project is likened to the production of a film, the project owner assumes the role of the investor and overall producer, while participating entities such as design institutes and contractors function as the screenwriters, cinematographers and actors. Within this framework, the project management service institution effectively serves as the “director”. Accordingly, at the outset of a project, the owner must plan the implementation of the project. This involves designing the project management organisational structure, allocating management functions, distributing project tasks, and establishing management workflows and institutional arrangements. It also includes the engagement of project management services, which covers the selection of project management service institutions, the rights and obligations under project management service contracts, and the management of contract performance. Legal advisors can assist project owners in completing the above tasks.

Third, project management (as the actual work content) serves as the means through which project governance is implemented. Contractual provisions define the procedures and authorities for management – for example, who must approve change orders and how payment requests are processed. However, without efficient management to execute and supervise these processes, the contract remains merely a piece of paper. Even the most well-structured organisation can descend into chaos if it lacks scientific management to co-ordinate and drive its operations.

Therefore, the key to project success lies in rigorous contracts, effective organisation and scientific management. This includes (but is not limited to) the following. Tendering, which is the primary procurement method in construction projects and a major focus of regulatory compliance, requires careful attention to whether the procurement plan can be executed and whether the tendering process is legally and procedurally compliant. Management of project design progress and quality, which determines project success, involves overseeing design firms through design contracts. With the strengthened safety obligations for owners under the Work Safety Law, which makes the owner the primary party responsible for safety, safety management systems and organisational arrangements must also be improved. Contractors face the risk of falling into debt traps, so owners need to monitor their financial status. Finally, the management of owner payments and related instructions is also a key area of focus.

In summary, legal advisory services for construction projects aim to assist project owners in establishing a contract management system. This system uses contract documents as its foundation and relies on contract review and performance monitoring as core tasks. It is also supported by management processes, organisational structures and functions, and institutional arrangements. As the “Made in China” brand shines on the global stage, the current era calls on legal professionals to transform from providing mere “professional services” to creating tangible “value”.

变革时代的建设工程项目法律风险管理面临的挑战与应对

随着国内经济下行，业主（发包人）面临的项目系统性风险与日俱增。为实现工程质量、效率与效益的统一，业主如何构建前瞻性的法律风险管理体系，如何选择真正能够保驾护航的法律咨询机构，是日益紧迫的问题。下文我们通过剖析当前项目法律咨询的痛点与挑战，提出解决思路。

建设工程项目的系统性风险需要法律咨询服务深耕

首先，建设工程项目的复杂性决定了法律咨询服务的专业深度。建设工程专业性强、周期长、法律关系复杂、主体多元，导致造价、工期、质量等法律责任认定困难。此外，国内市场秩序的固有漏洞，例如挂靠等现象，也导致法律责任认定困难，证据种类繁多且保存不易。因此，法律服务不能止步于纠纷发生后的”救火”，而必须前置并贯穿于项目全生命周期，从合同效力（如确保规划等许可、招投标合法）到履约过程管控（如变更签证、索赔、质量安全），形成完整闭环。

其次，工程组织管理模式的演进对法律服务提出了更高要求。随着工程总承包模式的推行，其合同体系、风险分配机制与传统施工总承包截然不同。设计与采购施工的深度融合、以及”固定总价”下的变更与调价争议，要求法律咨询服务提供者不仅精通法律，还需深刻理解工程管理及客户的商业需求。

再次，经济下行周期与债务清偿方式的变化带来了全新的风险场景。业主面临债务链条传导的压力，施工单位破产重整等情况频发，如何保障项目的顺利实施，需要法律咨询服务具备包括工程、金融、破产等不同法律专业的综合能力。

最后，业主通常非专门从事建设的主体，自身工程管理能力不足。他们可能合同审查专业能力薄弱、而且履约响应迟滞、证据管理缺失，尤其可能不清楚如何选择及使用法律咨询机构。法律咨询服务的真正价值，不仅在于化解纠纷的智慧，更在于未雨绸缪的洞察。但许多服务仍停留在传统的”文本审查”+”纠纷处理”模式，被动应对纠纷。能够深度理解合同的内在逻辑、提供文本体系重构与履约过程管理法律服务的机构更为稀缺。

工程项目法律风险管理的应对思路

我们认为，工程项目法律咨询服务应从”纠纷处理”向”风险管理”转型，从”文本审查”，向”价值设计”转化，从”单点处理”，向”体系构建”转变。建设工程项目法律风险管理的核心思想——将法律风险管理嵌入到项目管理之中。

合同在工程项目管理中具有核心、基础和贯穿始终的作用，它不仅仅是一份法律文件，更是项目管理的”宪法”和”操作规则”。它从项目启动到完成，全程定义了”做什么、谁来做、怎么做、花多少钱、什么时候做完、出了问题怎么办”。项目管理的成败，取决于合同的质量（条款是否清晰、公平、可操作）以及合同是否被严格执行。因此，建设工程法律风险管理核心是合同风险管理，即如何处理项目合同、组织、管理三者的关系。

首先，项目合同是组织与管理的基础。工程项目的合同结构反映了业主与项目各参与方之间以及项目各参与方之间的合同关系。其核心目标是优化项目成本与工期、确定责任界面、明确风险分配、匹配业主能力。解决的是”如何通过一组合约来组织整个项目”的战略问题。包括设计任务的委托模式、施工任务的发包模式、工程发包界面的合理安排、如何聘用专业分包、材料的采购模式。合同结构（是否采用平行发包、EPC还是施工总承包等）直接决定了项目的组织架构（业主是与一个总承包商对接，还是与多个承包商对接）。项目法律咨询机构可以协助业主优化项目的合同结构。

其次，项目组织是合同与管理的执行载体。合同中约定的权利义务责任，必须通过一个有效的组织来履行。管理流程和指令，必须通过组织中的岗位和人员来推行。由于业主缺乏专业的工程管理团队和经验，往往聘请项目管理服务机构负责项目”三管、三控和一协调”。如果把一个工程项目比作拍摄一部电影，业主是出品人和投资人，参建单位设计院和承包商是编剧、摄影师和演员；项目管理服务机构就是 “导演”。业主在项目之初就需要考虑项目实施的策划：包括项目管理的组织结构、管理职能的分工、项目任务的分配、项目管理工作流程及制度安排，以及项目管理的委托：包括项目管理服务机构的选择、项目管理服务合同的权利义务的安排、项目管理服务的履约管理等。项目法律咨询机构可以协助业主完成上述工作。

最后，项目管理（工作内容）是项目管理的实现手段。合同条款规定了管理的程序和权限（如变更指令须经谁批准、付款申请流程如何）。但是，如果没有高效的管理去执行和监督，也只是一纸空文。再清晰的组织，如果没有科学的管理来协调和驱动，也会陷入混乱。

因此，项目成功的关键是严谨的合同、优秀的组织、科学的管理。包括（但不限于）：招标是建设工程项目采购的主要方式也是行政监管及合规的重点，需要重点关注能否按采购计划实现、招投标过程是否合法合规；项目设计进度及质量管理决定了项目的成败，需要通过设计合同对设计单位进行管理；随着《安全生产法》对于业主安全管理义务的强化--业主是安全生产第一责任主体，安全管理组织制度也需完善；施工单位面临陷入债务泥潭的风险，业主需要对其资金监控；业主资金的支付及相关指令管理等也是应重点关注的工作。

综上，建设工程法律咨询服务的目标是帮助业主建立以合同文本为载体，以签约把关、履约监控为基础工作，由管理流程、组织及职能、制度等组成的合同管理体系。当“中国建造”的金字招牌闪耀全球之时，时代需要法律人实现从“专业服务”到“价值创造”的蜕化。