Five Ways To Avoid Costly Construction Litigation

By Robert Wolf

Nobody, except lawyers, actually likes litigation.  It’s time-consuming.  It’s expensive.  It’s stressful.  But, there are some ways to help prevent such an expensive litigation process.  Although no plan is perfect, these guidelines could help minimize your time, expenses, and stress level.

1.  Use an Attorney To Begin With

I cannot tell you the number of times I’ve seen a contract, purchase order, or employment agreement where I’ve thought to myself or told a client, “If you had just come to us to draft this document to begin with, you would not be in this situation right now.”  With so many “samples” of various types of documents on the internet, it seems that many businesses want to try their hand at drafting key contracts, employment agreements, and non-compete agreements themselves.  While I can appreciate the need to conserve financial resources, companies often end up spiting their nose to save their face by creating documents tailored for their organizations without the benefit of legal aid.

2. Find an Attorney Who Understands Contracts

“My brother-in-law’s second cousin has a friend married to a guy who knows an attorney, who represented him on some traffic tickets.  I’ll just use that attorney.”  Well, you’ve at least followed Rule #1 – you are using an actual attorney.  But, are you using the “right” attorney?

I don’t want a cardiologist performing brain surgery on my loved ones, and I don’t want an attorney specializing in criminal law to write my contracts.  Likewise, I would not want an attorney specializing in contracts to defend anyone in my family on a criminal matter.  So, make sure you are using an attorney specializing in the area you need, as opposed to a jack-of-all-trades-but-master-of-none attorney.

3. Find an Attorney Who Does NOT Need a Learning Curve

Although everyone learns something new every day, and the facts of each case are going to be different, you can spend a LOT OF UNNECESSARY MONEY if you don’t research your potential attorney’s actual case experience.  You may have found an attorney specializing in contracts, but does that attorney have significant experience with the type of contract that you need, such as a subcontract agreement or independent contractor agreement?

If not, you could be spending thousands of dollars while the attorney conducts online legal research and re-creates the wheel, so to speak.  Don’t be afraid to ask questions at the outset and determine your attorney’s own practical experience with the issue you are inquiring about.

4. If You Are Not Using a Litigator, Have a Litigator Review the Contract

So, you’ve done the right thing and found an attorney actually specializing in drafting and/or reviewing the all-important Subcontractor Agreement that you require.  The attorney you are speaking to has drafted many of these types of agreements over the years.

But, has your attorney ever cross-examined a witness in a deposition or on the witness stand about the meaning and interpretation of this type of agreement?

Has the attorney had to sit through a deposition where he or she is defending a witness being cross-examined about the Subcontractor Agreement?

It is that last level of experience – actual litigation – that is invaluable.  It is one thing to know all of the various statutes and laws, but it is another to have the practical experience of poking holes in the stories of many witnesses over the meaning of a single word or phrase.  Litigators can use this experience to help you avoid future mistakes.

If you are not using a litigator, then try to have an attorney specializing in litigation review the document you are having drafted for you.  It likely will not cost much, and can save you many thousands of dollars down the road.

5. Get a Budget Up Front

As attorneys, we do not like to be surprised with our clients’ stories, or with a client’s sudden inability to pay for the services rendered by attorneys.  Likewise, it is not fair for a client to be unnecessarily surprised for a bill sent by an attorney.  Do not just ask for the attorneys’ hourly rates.  Find out how many hours are likely involved to complete a task.  Ask for an approximate budget.  Or, ask about an alternate arrangement such as a flat rate plan where you pay X dollars for the attorney to complete a specific task.  In that case, if the attorney takes longer than expected to do the job, then you are not penalized.

There is no Perfect Plan.  But, if you take these five factors into consideration, then more often than not, you will save significant money for yourself and your business in the long run.

Robert Wolf is a senior associate with The Beckham Group in Dallas, Texas.  The Beckham Group has extensive experience with, and specializes in, business litigation both as a Plaintiff and a Defendant.  The firm drafts and prosecutes/defends civil cases involving numerous types of contracts.

Vince – the blogger’s Reality Bite:  In addition to the points that Robert makes, help yourself out by providing your attorneys well-thought-out and organized documentation with which to represent you. Don’t be the person that gives his/her tax account a shoebox full of receipts. Somebody is going to have to wade through the information, and if your attorneys have to do it, they are probably going to be more expensive than some of the lower paid individuals on your staff.

The Punch List is Triune’s proprietary blog for discussing issues and providing insights specific to the commercial construction industry. Copyright 2014 TMV, LLC (Triune).  Any and all rights reserved.