We live in a highly litigious society, and the complex nature of construction projects all but ensures a high probability that a dispute and potential litigation may occur. However, there are a number of different factors you should consider before jumping into a potential detrimental legal battle.
No matter your relationship to the construction project, if you are considering filing a lawsuit over some sort of dispute with others involved in the project, be sure to ask yourself the following five questions:
1) What is the cost/benefit?
The first thing you need to do when weighing the possibility of pursuing litigation over a construction dispute is conduct a cost/benefit analysis of the situation. Simply put, does the potential benefit you could possibly receive if you win a lawsuit outweigh both the potential detriments that would occur if you lose the case as well as the certain costs that will occur if you pursue the case. Generally speaking, the potential benefit of pursuing litigation should significantly outweigh the costs, including things like remobilization costs, potential damage to your reputation, interest, penalties, and legal fees. Thus, litigation is usually not worth it if your dispute—and the potential benefit should you win the case—is relatively insignificant.
2) Can you win?
This is going to be a major question to ask your attorney, but it is important to consider nonetheless. Based on the circumstances of your dispute and the evidence available, can you actually win the case? Even if you know you are in the right, if you do not have the evidence to prove it, the litigation is probably going to be a waste of time and money. Have your attorney analyze the facts of your case and advise you on your chances of winning a judgment should you pursue a lawsuit.
3) Do you want the attention?
Construction lawsuits usually draw significant public attention. Additionally, court proceedings are usually a matter of public record. Do you really want the details of your dispute being made available for anyone who wants to find them? Can you afford the potential negative attention that comes with being caught up in a public legal battle?
4) Can the dispute be resolved by other means?
Depending on the circumstances of your disagreement, litigation may be a necessary tool, but oftentimes the dispute can be resolved using some other means such as negotiations or even some form of alternative dispute resolution such as mediation or arbitration. Keeping your dispute out of court is particularly important if you want to maintain a working relationship with the opposing party after the issue is resolved, or you want to continue and finish the construction project.
5) If you win, can you actually collect?
When contemplating a potential lawsuit, especially in the construction industry, it is always important to assess your potential for actually collecting a judgment. If your dispute is over nonpayment of funding for the project, and the investor or owner did not pay because they are bankrupt, there may be nothing for you to collect even if you win the case.
Whether you are a lender, contractor, or homeowner, if you are considering pursuing litigation over a construction project, please contact the attorneys at the Florida Construction Law Group today and let us analyze your unique circumstances and advise you on the best course of action.