Originally from Dispute Resolution Journal

INTRODUCTION

The cost of defending a construction defect case in court is three to five times greater than the amount that is ultimately paid in settlement. This is a significant amount of money. For this reason, and particularly in this struggling economy, all stakeholders involved in a construction defect case, including attorneys, insurance claims representatives, mediators, general contractors, subcontractors, owners and developers, should be looking for ways to save money by cutting the cost of resolving these cases. This article discusses possible ways to achieve early resolution during the "pre-litigation" phase of the case.

WHAT IS NEEDED TO SETTLE A CASE IN THE "PRE-LITIGATION" PHASE?

For purposes of this discussion, pre-litigation does not mean before a complaint is filed. I define it to include such a case as long as it has not gone through any of the following: extensive discovery, expert investigation and testing, expert depositions, or trial preparation. I also consider a case to be resolved in the "prelitigation" phase if it is fully resolved within one year of the filing of the complaint. The reason for this expanded view of the "prelitigation" period is that most construction defect cases are not capable of being resolved until all parties and their insurance carriers are involved in the case.