When, How, and Why – Construction Litigation

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construction litigation

No contractor or subcontractor wants to be involved in any type of construction litigation as it is often a drain on time and resources as well as a huge source of stress. While most businesses take steps to avoid construction litigation by having good contracts and reaching out to try and resolve issues, occasionally you will find your business party to a lawsuit. When this happens, you want to have experienced construction attorneys on your side who are working for the best possible resolution.

NLB has seen hundreds of these cases – in our experience, statistically about 95% settle. Click here to learn how to settle a lien or other construction litigation matter.

When Does Construction Litigation Occur?

There are numerous situations that lead to construction litigation including contract violations where one business working on a project believes another party has significantly violated their contract. Litigation also occurs when one business enters foreclosure and others who are owed money have to participate in order to protect their interest in getting paid.

In some situations, litigation occurs over product liability, where the work performed created issues for the entire project and the owners of the property. In these situations, many parties are often joined into the litigation as companies attempt to pass the blame on to different parties. Insurance companies often join in the litigation to protect their interests and limit their exposure.

How Does Litigation Progress?

The exact progression of any case depends on the facts and the parties involved, but most lawsuits follow a series of steps as they work towards conclusion. After you’ve been served with a lawsuit, you should reach out to a construction attorney who can explain the nuances of the particular case and advocate for your best interest.

The first step in the lawsuit is the discovery phase where all the parties on the case will try to gain a full and complete picture of what happened. This could mean collecting documents and business records, interviewing key employees, and bringing in experts to review the situation. The lawsuit then progresses into a series of motion hearings where the lawyers try to determine what facts everyone can agree on, and thus don’t need to be argued, what evidence might be problematic, and any specific issues the case may have.

During this process, there are often multiple attempts made to settle the case. These can be as informal as the lawyers having a conversation around their clients’ different goals, as organized as a settlement conference where all parties come to the table and talk about their case, and as formal as mediation or arbitration.

Once these steps are complete, if no resolution has been obtained, then the case moves into the trial phase. The length of this phase generally depends on how complex the case is and how many different parties are involved and can last a day or several weeks.

Why Do Some Companies Litigate?

Some companies seem quicker to jump to litigation than other companies, which can be unnerving for a small construction business that has never dealt with litigation before. There are many different reasons companies choose to litigate, sometimes because it’s the only way to reach the goal of collecting on a bill owed and sometimes because they feel the threat of litigation is the quickest way to resolve the issue.

If you find yourself party to litigation or are interested in pursuing a claim against another business, take the time to first reach out to the team of experienced construction attorneys at National Lien & Bond. We work to educate our clients and build partnerships that help them limit issues and resolve problems quickly. We can also step into difficult situations and help work towards a resolution that avoids the cost and headache associated with trial. Reach out today to learn more about our services.

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