For those of us that work on the litigation side of the design and construction industry, we know that hindsight is indeed 20/20, as the expression goes. An unfortunate aspect of the litigation realm, is the dehumanization that occurs as people are reduced to and segregated as either plaintiff or defense — the US versus THEM mentality that only breeds more conflict. In this article, my friend Christopher G. Hill (no relation) offers some well reasoned advice for preventing this conflict in the first place.
I’m a solo construction lawyer here in Virginia and see myself as a counselor and risk manager first and a litigator when necessary. Even with that self-view, in almost 16 years of law practice, 11 of those in the field of construction more times than not, my first contact with a construction company is when a problem arises and litigation (or those things like mechanic’s liens and demand letters that precede litigation).
Being the great “Monday morning quarterback” that I am, I get the chance to look at the problem with a fresh perspective to see where the project or contract went off the rails. Sometimes the project got off on the wrong foot from the start with a poor contract. Often the issue is what change orders, if any, were appropriate and what those should have said. Other times, the schedule gets delayed for who knows what reason.
These are only a few of the moving parts on a construction project that can cause the best laid plans to go awry. The permutations of potential issues are almost infinite, but as a general rule, one common thread runs through all of the projects gone bad. That thread is poor communication.
Poor communication leads to differing expectations for the project among the various principals (Architect, Owner, Contractor or otherwise) and therefore different views on what was to be done and how it was to be done. Such differing expectations cannot be met for every one of those principals. The architect draws the plans and has his or her “vision” for the project. The owner has a budget and what he or she thinks the project should look like and when it should be complete (and importantly has the money), and the contractor sees the details of completion and knows how he or she has always done this sort of job.
The lack of communication can come in the form of poorly drafted contract documents that do not specifically lay out the scope of work. It can come in the form of assumptions as to what certain terms mean to a person who may have completely separate thoughts on the meaning of that term. Without this clear, up front understanding of the scope of the job ahead, the parties simply cannot know their responsibilities and do not have a baseline from which to determine if those responsibilities have expanded to necessitate any changes in expectation and/or time and payment. While a great contract is the best way to get off on the right foot, it only works when everyone understands the process of fulfilling that contract. Before signing a contract (and even without the intervention of a lawyer), the principals need to educate each other on their expectations for the job. They need to explain their positions and thoughts and answer any questions from others. Not only does this lead to a better contract, it leads to trust and the ability to deal with the inevitable issues that pop up during construction.
This same level of communication needs to continue throughout construction. The owner should not be totally absent from the project. The architect should not assume that the contractor will run with things and know his or her vision and only communicate when a payment application comes in. The contractor should not see the architect as an adversary and a barrier to payment with only the owner’s interest in mind.
By seeing that all of these main principals to a construction project (not to mention the other subcontractors, engineers, and consultants that may be involved) are on the same team with a common goal, a project will run more smoothly. With consistent communication of the progress and status of the project among those with a vested interest in it, the expectations can be adjusted prior to conflict arising. A change in circumstance is only a problem if one party is blindsided. Only when a sudden change order hits a contractor over the head without prior warning and with unilateral terms is that contractor tempted to walk from the project. It is when the owner’s dream home is delayed without warning due to an unforeseen issue that was not properly explained does that final check get held up.
I am consistently amazed at how many issues that lead to litigation could have been avoided had the parties simply communicated earlier in the process. Add in what seems to be a consistent lack of response to my requests for information prior to filing suit, and you have a recipe for a couple of happy lawyers and a couple of unhappy parties that are dragged into the courtroom when the problem could have been resolved. Therefore, this month’s risk management advice is: Communicate, you’ll be glad you did.
About the Author
Christopher G. Hill, LEED AP is Virginia Supreme Court certified mediator, construction lawyer and owner of the Richmond, VA firm, The Law Office of Christopher G. Hill, PC. Chris has been nominated and elected by his peers to Virginia’s Legal Elite in the Construction Law category on multiple occasions and is a member of the Virginia Super Lawyers “Rising Stars” for 2011 and 2012. He specializes in mechanic’s liens, contract review and consulting, occupational safety issues (VOSH and OSHA), and risk management for construction professionals.
Chris authors the Construction Law Musings blog where he discusses legal and policy issues relevant to construction professionals. Additionally, Chris is active in the Associated General Contractors of Virginia and the Board of Governors of Construction Law and Public Contracts Section of the Virginia State Bar.
Image courtesy rescatemineros