Construction projects are often complicated and involve multiple collaborations. This complexity can, in turn, make them expensive and prone to many construction disputes, such as construction defects, delays, injuries, and other issues.
According to Statista, in 2016, the average value of construction disputes in the United States was 21 million U.S. dollars.
Construction litigation is when people have legal problems during the construction process.
Construction litigation can become expensive and time-consuming for all parties involved, so it becomes important to understand why it happens and how to avoid it.
This comprehensive guide delves into the intricacies of construction litigation, providing insights into common disputes, legal procedures, and strategies for success.
Common Types of Construction Disputes
Construction disputes are disagreements or conflicts between the different stakeholders in a construction project.
- The quality of the construction. Poor-quality construction is risky as fixing it can cost a lot of time and money. It is always the contractor’s fault if a construction does not meet the right standards due to workers being poorly skilled or using wrong construction materials resulting in a construction dispute.
- Project Delays. Construction delays can be a headache and can be a result of different things like bad weather, permits, materials, or safety problems. If the project is not completed on time, the contractor may have to pay fines. To avoid this, the contractor needs to have clear contract terms among all stakeholders to avoid delays.
- Non-payments. If a contractor finishes a job and doesn’t get paid as agreed, they can take legal action. Not paying can harm a contractor’s reputation.
- Worker Injuries. Even with safety rules, accidents happen at construction sites. To know who’s at fault when a worker gets hurt, they check if the worker was reckless or if the boss didn’t provide safety training or a safe workplace. Good safety programs and records can help avoid legal troubles.
Also read: What is Environmental Litigation: A Guide
Legal Procedures of Construction Litigation
A construction litigation case follows the following stages: case investigation, pleadings, discovery, pre-trial, trial, settlement/verdict, and appeal. ADR is also covered, as it’s often mandatory in commercial construction contracts before formal court proceedings.
Phases of Construction Litigation
Phase 1: Gathering Evidence
In this stage, your construction lawyer collects evidence for your case. It’s crucial to have enough evidence before moving forward, as a weak start can result in a waste of money. Gathering evidence involves locating witnesses, gathering documents, and analyzing the events to build a strong case.
Phase 2: Starting the Lawsuit
To start the lawsuit, your lawyer files legal documents (summons and complaint) served to the defendant. If you’re the defendant, hire a lawyer to investigate the claims and prepare a response.
Phase 3: Sharing Information
Discovery involves both sides sharing relevant information, like contracts and site records. Your lawyer uses requests and depositions to collect this evidence. If needed, they can request a summary judgment from the judge.
Phase 4: Preparing for Trial
Your lawyer gets ready for trial by consulting, hiring expert witnesses, and developing a strategy based on the evidence.
Phase 5: The Trial
Both lawyers present their cases with opening statements, evidence, and witnesses. The goal is to convince the judge or jury of your case’s strength.
Phase 6: Settlement or Verdict
Settlement negotiations can happen anytime, but if not, the judge or jury delivers a verdict.
Phase 7: Appeal
If you lose, your lawyer can appeal. They’ll draft motions, prepare for the appeal trial, and find more evidence if needed.
Alternative Dispute Resolution (ADR)
In some cases, contracts require ADR before going to court. ADR methods like mediation and arbitration can help resolve disputes. Mediation involves a neutral mediator facilitating discussion, aiming for a compromise. It’s not legally binding.
Arbitration is more court-like, with arbitrators ruling on the case. Their decision may or may not be binding, and appeals are rare. An experienced attorney is essential for success in ADR.
Strategies for Success in Construction Litigation
To ensure success in a construction litigation, a systematic and strategic approach is vital. To boost your chances, consider the following steps:
- Conduct an early risk assessment: This involves reviewing project documents and getting input from all stakeholders to find potential problems. Good communication prevents issues from getting worse.
- Gathering and preserving evidence: Collecting and storing all important documents, like emails, site records, plans, and witness statements, is really important. Make sure you organize them with dates for easy reference.
- Contract and legal review: Carefully study the contract and the law to find clauses that support your claim and see if you have a good chance of winning.
- Preparing your claim: Make a clear and complete claim with the right evidence and legal information to show what happened, the contract breach, and the damages you’re asking for.
- Negotiation and dispute resolution: Try talking to the other side to work things out through talking, mediation, or other ways. It can save time and money.
- Going to court: If talking doesn’t work, get a lawyer and give all your documents to the court on time.
- Enforcement: If you win your case, your lawyer can help you figure out how to ensure you get what you’re owed.
Construction disputes can be complex and costly. However, a systematic and strategic approach, combined with early risk assessment and effective communication, can significantly reduce the likelihood of these disputes.
By understanding the common types of construction conflicts and the legal procedures involved, stakeholders can better navigate the challenges of construction projects.
Whether through negotiation, alternative dispute resolution, or litigation, in each case, taking the right steps, such as preserving evidence, can lead to a successful resolution.
Ultimately, being well-prepared and proactive in addressing construction issues is key to ensuring a smoother and more successful construction process.
Also read: Litigation vs. Lawsuit: Key Differences