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Why Construction Cases Hurt: Understanding and Predicting the Costs of Construction Litigation

Timothy R. Hughes, Esq.
Hughes & Associates, P.L.L.C.

A Washington, D.C., court recently ruled that the National Labor Relations Board lacked jurisdiction to order an employer to reinstate striking workers.

It is axiomatic that litigation is a painful, time consuming and expensive process. Unfortunately, construction litigation matters tend to be far more painful than most. Understanding the risks and costs of construction cases is critical to making informed decisions prior to the filing or defense of a case.

1. Factual Complexity Is Expensive

Construction projects are extremely complicated endeavors. From the initial development of a program for a project through the issuance of final payment and warranty documentation, the project tends to sprawl over several years. Numerous individuals and companies play a role in the project.

The factual and historical complexity of a construction project translates to a significant amount of effort for a lawyer to learn and address the facts of a case. I have handled cases involving literally thousands of boxes of documents. In addition to review of documents, the lawyer must interview or depose many witnesses to lock down the story of the case on the record.

Factual complexity translates to increased expense of litigation. The total legal fees and expenses involved in construction litigation can sometimes overshadow the stakes involved, particularly on smaller projects. Due to the high level of documentation and discovery in construction litigation, you must undertake a careful analysis of the stakes and the expenses to decide if litigation is really worth it.

2. Your Lawyer’s Preparation Chews Into Your Time

Even the best trained and experienced construction lawyer needs a significant amount of input and assistance from their client to prepare a construction case. The lawyer handling a construction case in essence must become the complete expert regarding the facts of that specific project.

I often tell clients at the outset that the biggest expense to litigation is their own internal time and resources. At the beginning of the case, this comment usually draws an incredulous joke from the client referring to the big expense of lawyers. Interestingly, at the end of a case most clients generally agree with my initial assessment.


3. How to Avoid Losing When You Win

You need to understand the time and expenses before you initiate or defend a construction case. It is reasonable to ask your lawyer to discuss these matters with you on an on-going basis throughout a case. This statement comes with the inevitable lawyer’s caveat: unlike construction bids where the amount of effort required to do the work is somewhat predictable, litigation is inherently unpredictable. The lawyer will not know everything about a case when you get the first rough estimates of the amount of work a case will require.

Perhaps more importantly, neither you nor your lawyer has much if any control over how the other side will handle their side of the case. One of the more frustrating things I have faced is handling a small case where the other side forces me to spend an unreasonable amount of time and fees by their actions.

Conclusion

Construction litigation is inherently complicated, messy and expensive. You should understand as early as possible the likely effort, time and expense involved in a piece of litigation as early as possible. You should revisit this question with your lawyer throughout a case. If you understand these factors, you will be in a much better position to make informed decisions regarding starting, fighting, and ending litigation.