3 Main Causes of Construction Lawsuits

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In this article, I’ll go over the 3 main causes of construction lawsuits.

But let me preface this read with the following: legal disputes in the construction industry are lethal in every sense. Regardless of the size of your construction business, construction lawsuits are bigger than everyone. One legal dispute can take down any business. Here’s proof. The Building and development giant Grocon has recently put its construction business into administration. Their chief executive Daniel Grollo blamed Infrastructure NSW’s (INSW) which is ‘forcing’ them to place the business into administration and Grocon has sued the NSW government for $270 million in losses claim.

Cause #1: Contracts – The devil is always in the details.

In the 2018 Global Construction Disputes Report, it’s been made clear that contract disputes are the main cause of legal issues for construction businesses. That includes things like contractual errors, poor administration, and misunderstandings.

Depending on the size of the project, the contracts quantity, complexity, and risk will vary. Contracts are notorious for being breached, disputed and challenged inside and outside of the courtroom. And so, it’s not just about ‘what’ the contract covers but more importantly, ‘how’ it covers you and your business.

Often than not, construction projects are riddled with delays and bottlenecks coming from the most unexpected places and before you know it, you’re in a vulnerable position. They say, “time is money”. But in construction, your contracts are money. Your contractual agreements are a make it or break it. Bullet-proof contracts will not only minimise your risk and save you unnecessary cost, in many cases, but they’ll also be the main reason your project is on time and going smoothly.

So, how do you get your contracts bullet-proofed?

The construction industry is notorious for its complexities and convoluted details. Even some of the best attorneys can make costly mistakes. And that’s why you need to work with a Construction lawyer instead of someone who doesn’t specialise or have extensive experience in the construction industry. When looking for an attorney to help you with construction contracts, you must select an attorney with prior experience in the construction industry. You will need someone with industry knowledge to protect your best interests.

Cause #2: Negligence – Expect the unexpected.

Negligence based disputes are more common than most construction business owners think. Even the government is subject to negligence lawsuits. For example, several months ago, owners of units in Sydney’s Opal Tower have launched legal action against the NSW Government after discovering more than 500 new defects in the beleaguered building.

Sometimes ‘negligence’ is a clear-cut matter like when safety is compromised but sometimes it’s grey and subjective. Buyers expect the highest level of quality and their property to be delivered according to the exact specifications. Negligence disputes can be minor, but they can also result in major class actions that are costly and time-dragging. The grounds of a negligence lawsuit normally require documentation of a specific breach of duty. The best way to minimise negligence-based lawsuits is to closely monitor and manage your projects and have the right management team that can oversee the project in the best way possible.

Cause #3: Delays – What’s within and not within your control.

Although these are less common than contract disputes and negligence, lawsuits involving strict delays in delivery are still common and do happen. Delays occur due to a variety of reasons. Some are perhaps within your control and some are not within your control. For example, a season of heavy rains can lead to many days with construction on hold. Or, perhaps your subcontractors are not delivering their work on time. At the end of the day, as the main contractor or business responsible for delivering a project, whether it’s your direct employees or 3rd part entities, you can be at risk of failing to deliver on time. This can lead to disputes and legal actions taken against you.

Conclusion on Construction Lawsuits

Disputes and lawsuits are common and quite dangerous for your construction business. Having the right construction lawyer will not only ensure you are legally protected but have the right legal advice when you need it. Sometimes you’ll need to pursue a resolution as quick as possible, and sometimes you’ll need to escalate and go down the path of litigation. In all cases, you’ll need the right construction lawyer alongside you.

Who is Lazarus Legal?​

A Construction Law Firm can make the ultimate difference for your business. At Lazarus Legal, we work with a range of clients across many sectors – helping them thrive and grow but most importantly, fight and win their battles. 

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Barry Lazarus

Barry Lazarus

We’d be lying if we told you that this bloke isn’t the big honcho of our team, but his name is a dead give-away. The founder of Lazarus Legal, Barry Lazarus is an old school, tough as nails lawyer. They don’t forge litigators like this anymore. With decades of experience in both Australia and South Africa, his wisdom is as renowned as his name.

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