Hate to be the bearer of bad news, but if the above is actually the case, they may use that to waive any responsibility (hazard sign generally means, 'slow down & look').....having said that, if it's as bad as you say, they should have zoned that area off.
And as far as the council not having any liability....huh?!
Even if they are private contractors, I would've thought the council would have to be the overseers of the project.....public road isn't it??