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7 Common Types of Construction Litigation Claims

December 29, 2021

Construction projects are complex, involving multiple parties such as developers, investors, contractors, architects, engineers, consultants, suppliers, and manufacturers. Success depends on the joint and coordinated effort of all involved parties. The responsibilities and risks held between the parties can change dynamically from project to project.

Given their complexity, construction projects may bring numerous risks and can easily go wrong, resulting in construction claims and litigation. Therefore, a prudent claims management team, consisting of attorneys, consultants, and construction experts, is often an essential part of these projects. These professionals can handle different types of litigation claims.

What types of claims can arise in a construction project?

Private project owners have the right to demand surety bonds to ensure that all the parties involved in the project will deliver what was promised under the contract. There are different surety bonds in construction, and by the same token, different claims can be made. Different bonds protect different parties. When and if a party breaches the contract, different types of claims can be pursued against that party.

Construction defect claims

A construction defect is a failure of a building component or system due to poor design, workmanship, or materials. Construction defects can be any part of the building, from foundation cracks to corroded piping and a leaking roof. They may create financial harm to the owner, usually through damages caused by the defect, loss of use, diminution of value, or repair costs to correct the defect.

One of the things that make construction defect claims common is that some state laws have their statute of limitations up to 10 years after construction is completed. The reasoning is that some defects or the damage resulting from them aren’t noticed right away.

These construction defect claims have to prove that:

  1. The construction defect is an occurrence.
  2. Property damage took place because of a contractor’s faulty work or poor management.
  3. The defect was not listed in business risk exclusions.

One preventative measure to construction defect claims is the construction team can implement an effective quality management program, usually including third party quality assurance consultants.

Mechanic’s lien claims

This type of claim is typically filed by various subcontractors and suppliers. Mechanic’s lien claims are also called materialman’s liens, supplier’s lien, or laborer’s lien. The law allows subcontractors and suppliers to place a lien on property which was improved by the materials, equipment or labor they supplied, not paid by the general contractor. 

This lien gives them an opportunity to recover the payment they are owed. Unfortunately, the property owner isn’t protected against this process even if they paid the general contractor in full.

Breach of contract claims

Breach of contract is defined as failure to perform any promise that constitutes all or part of a valid contract without legal excuse. If this breach causes damages to the non-breaching party, that party has the legal right to remedy. 

It’s important that the filing party is compliant with the contract. Depending on the construction delivery method and claim, allegations can involve numerous contracts signed between owners, architects, general contractors, and subcontractors.

Construction delay claims

These claims are also called disputes related to schedule impacts. Delay claims generally relate to unforeseen events and circumstances that call for deadline extension and/or prevent the work process from being executed as planned.

What is most often contentious about a schedule delay claim is whether the delay affected the critical path of the project, how long exactly the delay is, what the root cause is, and whether the delay entitles the contractor to ask for time extension / more compensation. 

There are various possible causes of delay: poor management and administration, restrictions in site access, financial issues, defective plans, permits and approvals, changes in the work, differing site conditions, inspections, weather conditions and acts of God.

Personal injury claims

There are two common scenarios where personal injury claims intersect with construction litigation. 

  1. The first of which are injuries that occur on the construction site, either involving workers or bystanders. Much of the work on the job site is dangerous by nature. For a personal injury claim, what needs to be established is that an unsafe act and/or unsafe condition occurred.

When a personal injury occurs that results in a claim, in most cases the claims have to prove that OSHA safety standards were not followed by one or more parties. Please get advice from professional injury claim attorneys if you need more advice or help to discuss your case.

To help prevent personal injury claims from the job site, the construction team implements safety programs to train workers (such as the OSHA 10-hour Construction Safety and Health course) and enforce safety protocols (i.e. wearing personal protection equipment such as a hardhat and high visibility vest). Contractors who go above and beyond also hire health & safety consultants.

  1. The second scenario includes injuries that involve existing building elements after construction is completed. This can be something straightforward as slips, trips, and falls on walkways or more complex cases where construction defects led to an injury of building occupants, such as a balcony collapse.

Failure-to-disclose claims

In some states, sellers and real estate professionals are required to disclose any information they know that may impact the value or desirability of a property to a potential buyer. A failure to disclose is a breach of their duties to a fair dealing. This can be anything from not disclosing unpermitted renovations to black mold in the attic. All too often the nasty surprises are discovered when a contractor is performing renovation construction on the property.

If the buyer can demonstrate harm from the failure to disclose and that they couldn’t reasonably discover this information themselves prior to completing the real estate transaction, they may file a claim.

How can the trusted VERTEX team help?

VERTEX brings together a diverse team of construction experts from all construction-related fields. Their combined experiences amount to lifetimes of work on and off the construction site. With our forensic, quality assurance, and development services, we can help you prevent issues in your construction project or resolve them in the best possible manner if your project is experiencing difficulties. 

We operate across the globe, including the U.S., Canada, and Mexico. Contact us today and we will connect you with the ideal expert for your project.

This article was originally published by Xpera Group which is now part of The Vertex Companies, Inc.

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