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Do’s and Don’ts for Construction Firms When Facing Litigation

Whether you own a small roofing company or an enormous construction firm, there’s always a chance that your business will experience a lawsuit. A lawsuit can be filed for dozens of reasons by a variety of people, including business partners, vendors, employees, or third-parties. Dealing with a lawsuit can be a time-consuming and stressful process; however, construction business owners should pay close attention to detail when facing litigation.  

In this article, a Nashville construction law firm will offer a few tips on what you should do (and not do) if you are experiencing a lawsuit. Remember, for any of your litigation or arbitration needs, the Nashville construction lawyers with Cotney Construction Law are standing by.  

Do: Have Your Attorney Review Legal Documents

After you receive the documents related to a lawsuit, the first step should always be to contact your attorney. An attorney will closely review the lawsuit paperwork and help you evaluate the information in the document. If the information in the claim is valid, preserve any records related to the case. This can include anything from emails to employment documents to text messages or photos, videos, or other records. When compiling this information, if there is any doubt, don’t leave it out. 

Don’t: Reach Out to the Plaintiff 

The last thing you should do when you receive any type of legal action is try to communicate with the plaintiff. Never write an email, have a conversation with, or send a letter to the other party without your attorney’s knowledge or consent. Whether or not you’re aware, this information can be used by the opposing legal counsel during a lawsuit. The only person that should be communicating with the plaintiff’s side should be your legal counsel. Remember, once a lawsuit commences, the opportunity to resolve this issue “by reaching out” is over with.  If you have an active working relationship with the entity filing suit, like a disgruntled employee or business partner, don’t discuss the lawsuit with them directly.  

Related: The Importance of the Demand Letter

Do: Work With a Construction Lawyer

Construction law encompasses all aspects of the law and is extremely complex. Construction lawyers have in-depth knowledge related to contract law, workers’ compensation, the bid process, OSHA requirements, contract agreements and negotiations, and other laws related to a variety of disputes that occur within the industry. Construction attorneys represent clients in private and federal, state, and local government projects. Construction attorneys are also extremely familiar with the legal requirements associated with these specialized areas of construction. 

In other words, if you are experiencing a legal concern related to construction law, you should speak with an attorney that focuses solely on legal matters in this complex field. Ideally, construction business owners want a legal representative who is not only familiar with construction but also experienced in that specific area of construction law. For example, if a construction defect complaint was filed against your business, you should partner with a Nashville construction attorney that has significant experience defending clients against these types of charges. At the end of the day, you want a legal professional defending you that is extremely familiar with your type of legal issue and with the court overseeing the case. 

Don’t: Hire Any Lawyer

In stark contrast, a construction business should never hire just any lawyer to represent them. If you rely on an attorney that is inexperienced in construction law or lacks firsthand experience in construction, it’s safe to assume that they will be unfamiliar with the nuances of these types of lawsuits. If your business is experiencing a lawsuit related to construction law, it’s critical that you and your lawyer are on the same page about vital aspects of your business practices and processes. To ensure that this happens, partner with a Nashville contractor lawyer that concentrates on this specific area of the law.  

Do: Develop a Strategy

If you’ve received notice of a lawsuit, you and your construction attorney need to address the relevant information related to the case. This means responding to the plaintiff’s allegations, developing a defense strategy, and reviewing your contract and other important documents related to the case. In some cases, the contract may require both parties to participate in alternative dispute resolution (ADR) before a trial can commence. An employer also has to evaluate the potential liability they face, including what aspects of their business will be exposed during this dispute.  

A few questions to consider include:    

  • Is your business exposed to certain risks by pursuing litigation?
  • Is it in your best interest from a financial perspective to settle the dispute?
  • What is the estimated cost of the ultimate judgment?
  • What is the estimated costs to defend against the claim?
  • What are the pros and cons of proceeding with litigation?
  • Do you have an exit strategy for the dispute?
  • Is a counterclaim an option?

The right attorney can help you answer these questions and many more. As we stated previously, partner with a Nashville contractor attorney that focuses in this specific area of the law that can provide you with accurate legal counsel related to your case. 

Related: 3 Things to Know About Pre-Litigation

Don’t: Ignore the Issue

Although this may seem like an obvious point, you may be surprised to learn how many business owners elect to look the other way when they receive a claim or legal paperwork regarding a lawsuit. Some excuses for failing to respond  include:

  • The defendant would rather not deal with the situation
  • They don’t feel it’s worth their time
  • The plaintiff’s claim lacks merit

So why take the time to respond? It’s important that defendants don’t neglect a claim and always consult an attorney for review. An attorney can assess the plaintiff’s potential case and help determine whether or not they have a legitimate legal argument. Moreover, an attorney can effectively respond to the claim within the timeframe required by the court. If you fail to respond, a penalty or judgment could be enforced. 

Do: Be Proactive 

Depending on the type of litigation you are facing, the process of resolving a dispute can take anywhere from a few months to a few years. Considering that this can be a stressful process, it’s important that you perform your due diligence and do everything in your power to mitigate any legal risks. Three things every employer facing a lawsuit should do includes:

  • Communication is Key: Transparency is crucial. In order to establish a firm partnership with your attorney and experience the best results to alleviate your legal issue, you need to be straightforward and honest with your attorney to ensure they are prepared for any “surprises” during trial. Be prompt in responding to your attorney’s emails and requests. Lastly, never be afraid to reach out to your attorney and ask them questions. 
  • Do What You Do Best: Never lose focus on what you do best: managing your business. Although the litigation process can be distracting, business owners should never lose site of their business and their bottom line. When you trust in the right attorney, you can allow them to handle the legal aspects of your case, so you can focus on delivering quality results that continue to grow your business. 
  • Update Your Handbook: If you are dealing with an employment lawsuit or a contract dispute, experiencing a lawsuit can be a valuable lesson to ensure that this type of dispute doesn’t happen again. This includes having an attorney update your handbook, draft new policies that protect your best interests, and draft, revise, and review all of your contracts in the future. You should also provide management training to your key employees to mitigate issues in the future.      

Litigation is complicated, time-consuming, and stressful. Along with paying close attention to detail and avoiding pitfalls, partner with a law firm that is dedicated to their clients and the construction industry as a whole. 

If you would like to speak with a Nashville construction law firm, please contact us today.

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.