When it comes to construction, we tend to think that it is only about building a structure and then move on with our lives. Well, it is not that simple and there is a lot of things that surrounds a construction permit that only the land surveyor, architect and the contractors know about. A construction litigation is lawsuit that someone can sue another person over the works not done as mentioned in the contract. Contracts outline what is promised between two parties during a project. If the end result is not as stated in the contract, or if something goes awry during the project, the affected party may make a legal claim for breach of contract.
Speaking of protecting everyone, injuries and accidents are another extremely common way for a construction company to find itself in court. Injuries that occur during construction also cause major disputes, and if it can be proven that the working conditions were unsafe, the owner of the project might find themselves slapped with a lawsuit. While there is a wide array of causes of construction litigation, there are some issues that just seem to come up again and again.
Construction litigation can be quite complex due to the high number of parties and numerous moving parts involved. This creates several opportunities for issues to arise that can quickly skew the project’s deadline or halt the production all together. Someone dealing with construction litigation may deal with anything from material suppliers, to local government agencies that provide permits, to contractors, architects, property owners and the like.
Construction litigation can be broken down into several different yet overlapping segments. There are also sub segments to each of the main segments. The major segments consist of:
- Contract negotiations and preparation
- Liens and security interest to secure payment
- Constructive defect litigation
- Construction delay litigation
- Personal injury litigation involving construction defects
- Importance of Attorney Involvement
Construction litigation attorneys provide the greatest benefit for their clients through early involvement in the construction process. Having the attorney present at the inception of the project, as opposed to hiring once a problem arises, allows the client and the lawyer to work together toward common goals. Not to mention, it removes the potential for delay caused by teaching the newly hired attorney the logistics of the case. Considering time is crucial, spending time updating an attorney will only make things worse, especially if a big issue has occurred that must be worked out fairly quickly.
Stages of Construction Litigation
Before construction begins, its important identify and negotiate a realistic liquidated damage clause. It is a somewhat unenthusiastic, yet necessary part of the process. Reviewing all the relevant documents, gathering expert witnesses and discovering what the opposing side will argue will all be steps taken prior to the actual trial. Having an experienced construction litigation attorney will also prove extremely beneficial during this phase and into the trial stage. The trial stage involves the study and organization of all discovery documents produced and received, and all of the deposition testimony taken. Organizing witnesses and documentation during this phase will also be vital to ensuring a successful outcome.
Remember, litigation is a fluid, rapidly changing environment so it is important to be realistic in the approach. Patience and determination are often necessary for the attainment of a feasible and pleasant outcome along with strategy, research and knowledge of the law.
Quality of Construction
Quality of construction is extremely important for a number of reasons. If construction is not up to standard, the building poses a threat to all who enter, and could potentially lead to catastrophic consequences. When an owner finds issues with their finished (or nearly finished) structure, or if it does not pass inspections, the blame will likely fall on the contractor. Perhaps the laborers were not skilled enough, or the materials used were lower quality than agreed upon. There are cases in which the claims can be refuted, such as situations in which the contractor did use the materials discussed in the contract, and the materials proved to be faulty. Either way, a building that is flawed or dangerous clearly needs to be fixed, which means more costs, more labor, and more time.
Delays in Construction
Delays in construction are arguably the most prevalent reasons for strife on jobsites for owners, GCs, and subs. Delays can be caused by weather, permits, materials, labor, safety, noise – the list goes on and on. While they are generally not the fault of the contractor, their written agreement their written agreement can, in some instances, require a completion date, and the contractor can incur penalties for every month or even week after the cutoff. It certainly helps if exceptions for uncontrollable delays are mentioned in the contract before the project’s commencement, but when projects are months past their deadlines, disagreements still tend to occur. Things like weather and natural disasters obviously fall under the “out of human control” category, but when it comes to delays in delivery of material, or lags in getting permits, the guilty parties are often unaffiliated with the project’s contract, leaving the owner and the contractor in sticky situations.
When general or subcontractors complete a project and the owner does not provide the agreed-upon compensation, the contractors can sue for nonpayment. In addition, in an industry that relies heavily on word-of-mouth recommendations, news will travel quickly and cause a great deal of trouble when it comes to finding contractors for future projects. For most cases of nonpayment, contractors will file what is called a mechanic’s lien. These documents go further than just a standard lawsuit, as they become attached to the deed or title of the property and appear on public records. This means that the property cannot be sold until the liens are dealt with. Unless the contractor has gone against the terms of the contract, the owner of the project is obligated to complete the transaction.
As we know, despite the increase in accident prevention measures and the dropping rate of jobsite injuries, incidents are still occurring on construction sites every day. When a worker gets injured, there are a lot of factors to consider before deciding who is at fault. If the worker intentionally puts him or herself at risk by drinking, taking drugs, or otherwise, they are responsible for their own actions. However, if the worker received inadequate education, or did not receive a toolbox talk about the risks of the particular task that caused the injury, or if working conditions are unsafe, their boss would generally be liable. The issue at hand is, the owner could also risk litigation if there is no clear liability waiver outlined in – you guessed it – the contract.
Lawsuits are a difficult subject to approach, but the reality is, in an industry where litigation is so prominent, awareness of common causes of construction litigation can be extremely useful. Problems can arise at any time, on any type of jobsite, and there are a million and one reasons for disputes, however, overall, the majority of issues involve contractual obligations. On both the project owner and the contractor sides, contracts are often breached, leading to arguments and legal trouble.
Disputes over quality, delays, nonpayment, and injuries are some of the most common causes of construction litigation. Out of these overarching topics can come a slew of problematic situations, including potentially ruined relationships, so this background knowledge is great to keep handy in case of any future debacles.
We know the situation out there looks bleak: more and more companies are getting sued with no end in sight. But the good news is that if you take just a few simple steps, you can protect yourself, your crews, and the entire business from a devastating lawsuit. If you are looking for a professional company to help you out, then get in touch with Kane Construction Management Inc. They have over 30 years of experience.