Christopher Hill’s Construction Law Musings continues to be one of the longest-running and most successful construction-industry related blogs. One of his recent postings explains why.
While he admits in it to not being able to maintain his regular posting schedule, his reasoning might surprise you. He was too busy, dealing with litigation and other pressing client problems — and while this would seem to be undeniably good news from the perspective of a Virginia-based lawyer, he (rightfully) suggests that if you get to the point where the lawyers are doing well, you probably have gone too far and will lose even if you prevail at trial.
One thing that my busy January in particular highlighted is the fact that a busy month for me is an expensive one for
my construction clients. As a construction lawyer, when I?m extremely busy, as opposed to just busy, it means that my clients have me in court, in depositions, or performing other litigation related activities. While this is great for my bottom line because I have great clients that appreciate my representation, litigation is not a good way for construction companies to make money.? Quite honestly, the litigation process is a zero sum game in most cases where money spent on court related activities is money taken from the bottom line.
While some of the hard costs: attorney fees, expert expenses, court costs and the like, can be made part of a judgment on the back end if your construction contract is properly drafted, these costs are hard expenditures that are made on the front end with hopes of recovery at the end. Add these to the ?soft? costs of lack of productivity and focus on the past instead of advancing the business and making money and litigation is not a winning proposition, even when you win.
In short, by the time you as a construction company are in court, you are not going to make money on that project.? At best you are in triage mode and should be looking, from a financial, if not a legal, perspective at trying to limit the damage and move forward. You didn?t (and shouldn?t have) made your bid or priced your work with an eye toward having to sue for your money.
These points are well taken. Hill advocates that it makes far more sense in most cases to take less than 100 cents on the dollar in the early stages to settle the matter, than to push it through to the end.
After years of construction litigation and advising of my great construction clients, I am a firm believer that putting resources toward settlement early in a dispute will go a lot further toward a better resolution for you business than flying headlong through the litigation process. As I?ve stated before, mediation is near and dear to my heart.? So much so that I became a Virginia general district court certified mediator. As a mediator (and a lawyer representing clients in these mediation), I fight for a good and proper business resolution of a dispute. While sometimes the best way to get to the best result is to play out the litigation or arbitration process (and I can and do so in the proper circumstances) I find that more often than not informal direct settlement of a claim or resolution through the more structured mediation process is more than worth the time and effort.
Solid advice, indeed.
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