Thompson Builder on Common Reasons for Construction Litigation – What Can Businesses Do to Avoid Urgent Legal Problems?


Construction companies large and small start their projects with the intention of honoring the contract between themselves and their customers. This means that if things don’t go as planned, businesses can face both a dissatisfied customer and the possibility of legal disputes.

Thompson Builders, a general construction services company based in the Bay Area, knows that there are many issues in the construction world that can lead to litigation. To help construction companies assess their risk of legal trouble, Thompson Builders examines some of the most common reasons for litigation in the construction industry.

Delays and scheduling conflicts

It is not uncommon for construction work to take longer than expected. You never know when you’re going to start a project and discover issues that require extra work, or if inclement weather will negatively impact the schedule.

A difficult aspect of delays is that, even if they are not directly attributable to the company, there can still be penalties and potential lawsuits.

According to Thompson Builders, disputes over delays and schedule conflicts can be best mitigated by keeping job expectations clear. It may not be possible to monitor weather conditions, natural disasters, or the status of sick or injured employees, but several aspects of communication are under a company’s control.

Construction companies should be sure to communicate updates when there is a delay, as these can help strengthen documentation by showing that there is an explanation for the stoppage. Companies that try to hide problems for fear of upsetting customers run the risk of making the situation worse.

Quality of completed projects

In California, construction companies must adhere to some of the highest safety and industry standards in the industry – and the same is true in a variety of other states.

There are many reasons why a completed project may differ from expectations, however, if a construction is unsafe or does not meet project specifications, it may be grounds for prosecution.

Avoiding such problems means making sure your business is following procedures and doing tasks to the best of its ability. If the problem is the result of issues like lack of time, consider discussing it with a client rather than rushing into a job.

Repairing a faulty construction means your business will need more labor, cost, and time. For this reason, it is best to carry out the project within the specifications discussed the first time. Keeping documentation throughout the process and tracking the progress of a release will help you proactively spot issues before they become a major issue.

Injuries at work

Construction sites can be dangerous places. Even with safety protocols and common sense, accidents in industry still happen every day.

Workplace injuries are a common ground for litigation in the construction industry, in part because there is a lot to consider when establishing misconduct. Workers who have not received proper safety education or who work in hazardous conditions often have a strong legal case if they are prevented from accessing workers’ compensation.

Thompson Builders knows that it is best to avoid litigation involving these injuries by maintaining a safe environment for employees. This involves making sure that construction sites are as safe as possible, meaning that there are no tools or equipment where they shouldn’t be, that workers are well informed of safety principles and that projects should not continue if things get dangerous.

Injuries can be devastating for both a worker and a business. If you take care of the well-being of those doing the job, many of the most common sources of injury can be avoided.

Abandonment of the project

If a homeowner feels like a construction company has abandoned a project before it’s completed, they have every right to consider litigation. After all, an unfinished project means that a client would need to pay extra funds just to another company just to get the job done.

Abandonment can certainly be a problem with less reputable companies. Even still, it’s usually more likely that there was a reason the work was interrupted.

Companies need to make their case for seemingly abandoning a project before it is finished. The reason being open communication, clients are kept up to date on the progress of a job.

If clients have to come to you after several days of MIA without an explanation, it should come as no surprise if they wish to take legal action.

Payment disputes

Sometimes all the work is done according to the contract and there is always a problem getting the agreed funds from the owner. This is one of the most common reasons construction companies get involved in litigation when the issue isn’t the job itself.

Non-payment issues can be difficult for construction companies, especially those with limited manpower or funding. Legal proceedings can be slow and companies can have problems paying workers who have already proven themselves and completed the job.

There are a number of ways that entrepreneurs can effectively deal with non-payment. In some states, they can file a mechanic’s lien to help secure the payment. Mechanics’ liens make the property a “collateral” for unpaid debts and eventually a contractor may attempt to collect it by forcing the property to be sold in extreme cases.

Thompson Builders recommends trying to get to the bottom of non-payment issues while looking at your options to secure payment for best results. It is always possible that the problem is something simple to clear up.

How can businesses prevent litigation?

For Thompson Builders, litigation issues are best mitigated by staying proactive and open. Maintaining strong channels of communication with clients, keeping project documentation before problems arise, and doing everything possible to facilitate a project’s success are some of the most important things companies need to internalize.

Companies often discover far too late that the lack of communication allows the problems in the construction industry to escalate quickly. Don’t be afraid to have these difficult conversations. If you show your clients that you are committed to working with them to do quality work, many of the common grounds for litigation can be resolved amicably.

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