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The Three Biggest Challenges of Construction Defect Litigation Management

Construction defects are basically unavoidable. In fact, just last year, the United States alone saw an average of $33 million in construction disputes. The average length of these disputes? Over a year – averaging out at about 17 months.

These types of construction failures can be incredibly costly and time-consuming. From identifying and suing all potentially responsible parties, to engaging in discovery involving thousands of documents and scores of witnesses, as well as extensive mediation and negotiation; handling an extensive construction defect claim is no small task.

When taking on the numerous complexities of a construction defect claim, there are three key areas to focus on to make sure you get the fastest claim resolution possible.

Communication

Understanding the landscape of your claim will help you chart the most successful course of action. Work with legal counsel to understand whether it is worth taking on a case or whether it would be more advantageous to avoid a courtroom. In these types of situations, strong mediation and communication skills are priceless.

Keeping contractors and their insurers on the same page is critical. Contractors will often want to fight a claim in defense of their work, while insurers will do whatever it takes to avoid litigation. Finding the middle ground will take clear and consistent communication.

Documentation

Good documentation is the key to successfully resolving a claim. Your case should have a clear document trail that gives not only the context of the claim but also who was completing it, what works, and in what timeframe specifically.

Correct documentation also includes a review of all insurance policies carried by the general contractor. The multiple insureds and insurers must be identified, as well as the specifics of the policies held by each party. Separating these coverages also calls for a review of insurance history and contractual transfer of liability.

Reconciliation

Possibly the most challenging part of construction defect litigation is the reconciliation portion. Your team will need to track and manage share allocations, risk calculations, and funding cycles to ensure prompt payment from every participating carrier. Tracking reconciliation and recovery becomes even more tricky when your team comes across split billing.

Managing the billing process is quite a complex thing for legal practitioners especially if they have to split the bills among several parties for different percentages requires a different invoicing procedure to follow as it needs to include more than one payee in the billing process. Law firm and mediators who handle such cases in their legal service would probably be spending their valuable working hours tracking billable time and generating invoices manually. An automated billing software can often simplify this complicated procedure due to its extended and flexible billing capability to customize invoices based on the parties involved.

For more information, subscribe to our 5-part, mini video series – Construction Defect 101