Some construction firms may be asking the question, “Why does my business need an attorney?” Given the legal nuances within the construction industry and related fields, lawyers for construction companies can provide legal advice and counsel. In the event that a construction company encounters a breach of contract or other issue, a construction law firm can arbitrate or engage in alternative dispute resolution.
Bench Trials Versus Jury Trials
A 2005 review of civil cases that were filed in state courts showed that plaintiffs won bench trials more often than jury trials. The results of this review showed that 68% of the bench trials were won by the plaintiffs and 54% of the jury trials were won by the plaintiffs. According to data from the Bureau of Justice Statistics, the first national study of civil bench and jury trials showed that breach of contract cases comprised 33% of the civil cases that were filed in state courts. This includes the type of breach of contract cases that occur within the construction industry.
Builders Risk Coverage
Builders risk coverage is intended to protect construction projects. This applies to when a construction company is erecting a new building or structure as well as when they are renovating, adding onto, or repairing an existing building. This coverage is written for a minimum of one year. Since some projects may experience challenges, which includes but isn’t limited to inclement weather, it is vital to keep this risk coverage current and extend it if necessary.
Construction Industry Cases
In 2015, there were a large number of breaches of contract claims filed. The American Arbitration Association, for example, administered 551 construction industry cases with claims of $500,000 or higher. The largest mediated case was for $2.6 million, while the largest arbitrated case was $96 million. The total monetary value of all the claims and counterclaims made during this year was $5.5 billion.
The American Arbitration Association also reported that the largest case resolved by a single arbitrator was for $232 million. By way of comparison, the smallest case was a claim for $23,000, which was resolved by a panel of three arbitrators.
While there may be some overlap, each state has its own laws for filing breaches of contract. If a breach of contract claim is made in Texas, for example, the law dictates that the claim needs to be filed within four years. The exception to this is when the contract specifies that a breach of contract has to be filed within two years.
Alternative Dispute Resolution
The preferred conflict-management process within the construction industry is alternative dispute resolution, according to the American Arbitration Association. One of the reasons for this is that the median time frame for construction arbitration cases is usually considerably less than with other types of processes. In 2015, for instance, the median time it took from filing a claim to receiving an award was 232 days.
The Future of the Construction Business and Construction Law Firms
A point of interest within the construction business concerns technological advancements, such as 3-D printing and robotics. Given this, it’s possible that construction law firms may also be shifting their focus somewhat. Currently, some construction companies are primarily using 3-D printers to print concrete materials; however, advancements continue to be made within these fields.
In terms of technological advancements with robotics, Colin Guinn of 3-D Robotics reported that drones will be able to assist engineers and architects by handling construction tasks with greater accuracy. Due to this, it will be interesting to learn how this will impact the construction industry and construction law firms.