Construction Litigation – Learning to Love Lawsuits
There is a problem in the construction industry – an unmet need in search of a solution. Yes, if you are in the construction business, you had better learn to love litigation. The trends show litigation is increasing every year, and likely to increase for the foreseeable future. Fulbright’s 9th Annual Litigation Trends Survey for construction notes the following:
- Businesses on both sides of the Atlantic initiated and faced more lawsuits .
- Most respondents expect an easing in litigation unlikely in 2013 and beyond.
- 80% of engineering and construction companies filed at least one suit in the 12 month study period.
- 92% of the companies surveyed expect the number of legal disputes to rise or stay the same.
It is not just the small firms who are faced with this trend. Our experience shows that major companies generate the lion’s share of the litigation, especially in the management of complex projects. Generally speaking, big companies take on big risks and make big mistakes.
Does one or more of the following sound familiar?
– Pending major litigation?
– Delayed projects driven by noncompliance?
– Projects with massive contingency reserves?
– Dysfunctional project teams?
There was a time when a handshake and a simple agreement made a formal contract unnecessary . Those days are gone forever. Now, every time a problem occurs, the fine print in a lengthy and complicated contract is scrutinized, and the lawyers begin assembling. Contractors often hire lawyers to explain what the opposing lawyers said, or wrote. It is even worse in various countries or regions around the world. One of my associates who spent ten years in the Middle East said: “This place is like the Wild West: Shoot first and ask questions later”… and: “Everybody runs around using million dollar words that they pretend to understand, but don’t have a clue.” Mr. Gogulski adds, “During a recent seminar conducted in Doha, Qatar for Contract Managers involving three Middle Eastern countries, one of the attendees asked: ‘How do you respond to an Owner who throws the contract at you across the table, and says: I don’t care what it says. I can do anything I want… I am the Owner.”
Most attorneys will respond: “We can help you with this…this is how we do it in our firm.” “Not so fast” opines Gogulski: .”Will you guarantee the contractor’s name will remain on the bid list and not be blackballed by the Owner and other members of his extended family who control most of the business in that sector?” Besides the high risk of building the project, construction can be very nasty at times. It is hard to find peace and contentment at the end of the day in this litigious industry.
Why can’t we minimize the litigation, lower the over pricing caused by massive contingency fees, and use technology to help solve our problems before they waste time and resources? Gogulski has found that emerging technology can be used to reduce risk and minimize or avoid the enormous cost of litigation. Gogulski & Associates Inc. has joined with Keith Plemmons, PhD, PE, PMP, CEO of VAB Group and Associate Professor in The Citadel School of Engineering in Charleston SC, along with Ben Lamoreaux, PE, President of Lamoreaux Consulting Group in Cedar City, UT. Their efforts are devoted to developing solutions to unmet needs in the construction industry by improving project contols, mitigating risk and streamlining the claims process. They are developing solutions to address the enormous expense of litigation through the use of the latest 3D technology and customizable document management systems. Their most recent solution is 3D PROJECT PLUS™.Call today (843) 470-0459 and arrange for a demonstration of 3D PROJECT PLUS™