Construction Disputes

Construction Disputes

In the construction industry litigation is usually not the first resort when there is a dispute. Many construction contracts contain dispute resolution provisions that call for mediation and arbitration to prevent the harm to business relationships or reputations a public trial can cause. Often the goal of all parties is to have reasonable damage calculations as the basis for a settlement that makes litigation unnecessary. Regardless of the dispute resolution process, RPC can help by providing reasonable and reliable damage calculations.

Construction claims can involve a wide range of issues but the most common are delayed or defective work. Construction defects can give rise to direct damages and consequential damages.

Direct Damages

Determining direct damages in construction disputes involves calculating the difference between the value of what the injured party was promised and what was delivered. The remedy can be either:

• the reasonable cost of correcting the defects, or
• the difference between the value of the work with the defects and the value without the defects.

Consequential Damages

Consequential damages usually occur because the owner loses the use of the building because of delay or defect. The damages could include lost rent, lost sales, higher interest payments and extra loan fees. They could include the cost of relocating tenants. If the owner or architect was liable, a contractor’s damages could be lost profits from other projects, lost bonding capacity and injury to company standing and reputation. Many contracts have a consequential damages waiver with the added protection of an inventory of what types of damages should be treated as consequential.

RPC has the accounting, economic, and financial expertise to assist the parties and their counsel to determine direct or consequential damages. We have worked on many types of construction projects. We have special expertise in determining damages involving healthcare facilities such as hospitals, nursing homes and continuing care retirement communities. We understand the operational characteristics, the expense structures and the payment environment for healthcare facilities.

Damages Analysis in Construction Disputes

RPC has over 30 years of experience assisting plaintiff and defense counsel with damages analysis. Our team of accountants, economists and statisticians can assist from discovery through trial. We offer a preliminary review of documents and discussion of the dispute at no obligation.