Can You Afford a $19 Million Dispute?
The Eighth Annual Arcadis Global Construction Disputes Report 2018 revealed a shocking statistic related to construction disputes that should put all contractors on high alert: the average cost of construction disputes in North America was $19 million.
Even more shocking is the fact that this figure was actually an improvement over past years. The cost of disputes in the construction industry is exorbitant, and the majority of construction businesses are not prepared to incur these costs. Can your business afford to pay $19 million in disputes? There’s a good chance that it can’t, which is why partnering with a Nashville contractor attorney before becoming embroiled in a dispute is essential if you want your business to stay active and profitable.
Balancing Time and Cost Considerations Reveals a Grim Truth for Contractors
Even though the average cost of construction disputes technically dropped, this statistic is somewhat misleading when you consider another one of Arcadis’ findings: the time required to resolve construction disputes increased by two whole months. That means construction disputes remain unresolved for 17.7 months on average. That’s a significant amount of time to sideline a project while you resolve a dispute. Entire projects can be planned, funded, and completed in this time. When you get locked into a dispute with an owner, your efficiency and profitability will take a not-so-subtle hit as a result of these time implications.
Our Nashville Contractor Attorneys Can Help You Avoid the Number One Cause of Disputes
Did you know that the primary cause of construction disputes is errors and omissions in contracts? Too often, we find that contractors and subcontractors alike assume they are getting a fair deal when offered the chance to take part in a project. Later on, they discover that their negligence has consequences as they’re being asked to provide labor that falls outside of what they understood to be the scope of work, or payment is withheld because a “pay-if-paid” clause was written into the contract. This is completely avoidable when an experienced Nashville contractor attorney reviews your contracts before you sign.
Resolving Disputes the Affordable Way
When owners, contractors, subcontractors, and suppliers all act in good faith, profits can skyrocket and all parties are satisfied. When even one of these parties decides to act in a deceitful manner, it can lead to a negative experience across the board. There are several types of dispute resolution methods that can be employed to move on from a dispute, but the cost, time, and efficacy of these processes varies on a case-by-case basis. According to Arcadis, 82 percent of disputes are settled with an alternative dispute resolution (ADR) method rather than litigation. This is because the cost of processes like mediation and arbitration tend to be less expensive and more private. However, there are some conflicts that are best handled with litigation. Our Nashville contractor attorneys can help you make an informed decision about which dispute resolution methods are most applicable to your business.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.