The United States construction market was valued at approximately $1,162 billion in 2016. According to the United States Census Bureau, the commercial construction industry was valued at $437.8 million by June of 2017. It’s vital that these combined industries function optimally in order to provide jobs and much-needed housing and business structures.
Why Businesses Need Attorneys?
When a company is directly involved in the construction and commercial real estate business, it is likely that they understand many aspects of construction and commercial real estate law. Due to this, they may be asking themselves the question, “Why does my business need an attorney?”
When to Hire a Commercial Real Estate Attorney
Even when a business is aware of laws and regulations, there are nuances that may not be clear to them. When contracts need to be reviewed or disputes arise, such as breaches of contract, having an attorney available to mediate, arbitrate, or take a case to court can make a difference in the outcome. Furthermore, an attorney will be able to review local laws and regulations and advise their clients accordingly so that they are in compliance.
The Value of Construction Industry Claims for 2015
To provide an example, there were 551 construction industry claims that totaled a minimum of $500,000.00 that were administered in 2015 by the American Arbitration Association. The largest case mediated was for $2.6 billion, and the largest arbitration case was for $96 million. Claims and counterclaims had a combined value of $5.5 billion for that year.
Alternative Dispute Resolution in the Construction Industry
The American Arbitration Association reports that the preferred conflict-management process in this industry is alternative dispute resolution (ADR). In addition to other benefits, cases take less time to arbitrate with ADR than they do through litigation. During 2015, for example, the median time from from filing a case to obtaining an award was less than 8 months. According to federal court statistics, however, when civil cases go through a jury or bench trail, it can take over 2 years for a resolution.
The first national study of civil bench and jury trials was conducted. As the result of this study, it was determined that breach of contract cases comprised 33% of the civil cases that were filed, according to the Bureau of Justice Statistics. A 2005 review of civil cases filed in state courts showed that plaintiffs won bench trials 68% of the time. When these cases were tried by a jury, they usually won 54% of the time.
Builders Risk Coverage
Another benefit of having a construction attorney is to explain risk coverage and ensuring that their clients have sufficient coverage. The basic method to obtain coverage is by using ISO’s Builders Risk Coverage Form, CP 00 20, and this coverage is written for a minimum of 1 year.
In order to protect their interests, construction companies should have this coverage for the following purposes:
- To cover a new building or structure while it is being constructed
- To cover an existing structure while additions, alterations, or repairs are being handled
When Do I Need a Construction Attorney?
If your company isn’t sure when to hire a commercial real estate attorney or a construction attorney, it makes sense to consult with a construction law firm for additional information. At this time, an attorney can outline the services that they provide. In this way, your company will gain a better understanding of when to hire a commercial real estate attorney.