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3 Types of Construction Defect Litigation & How it Works

Generally, defects in construction refer to a deficiency or fault in the construction process. This fault can be in materials, designs, or workmanship, which leads to a failure in some part of the structure being constructed. And this failure may cause financial or other damage to a person or property. To put it in another way, a construction defect litigation includes all three of the following:

  • A deficiency in the process of construction itself, resulting from poor workmanship, design or materials.
  • The deficiency must cause a failure in the structure that is being constructed during the project.
  • That failure should cause damage to a property or person (financial damage or otherwise).

Sometimes, a deficiency might be as simple as not keeping up to an owner’s expectations. Other times, it can be a serious defect in the structure of the property. Construction defects and resulting failures can vary greatly based on the severity and source of the issue at hand.

Types of Construction Defects

Construction Defect Litigation

After the type of construction defect is distinguished, it’s usually classified as being either latent or patent. Latent defects are those that that hidden or not readily visible or observable. These defects probably won’t be visible to even those who inspect the work very thoroughly.

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Due to this reason, latent defects can be sometimes very problematic. Patent defects, on the other hand, are obvious. And often, that means they’re easy to fix. These defects are mostly merely aesthetic, therefore accessing and repairing them is usually not that invasive.

Let’s break down the construction defects types a bit further:

Design Defects

These are the defects that result from a design professional’s failure to create well-organized and accurate construction documents. Design defects mostly occur due to error or omission. Errors typically require redesign or replacement of a certain component, whereas omission can be fixed by adding to the general contractor Calgary scope of work with change orders.

Material Defects

These defects arise because of inadequate or damaged building materials. Material defects come from the supplier, thus the companies using these materials usually don’t get to know of the defect until after they have already incorporated it into the project. This makes material defects highly costly as they may require extra labour and new materials.

Workmanship Defects

Mostly when someone thinks of construction defects, it is the workmanship defects that come to his mind. These defects result from a contractor’s failure to build a structure of component in accordance with the construction plan.

Workmanship defects can vary widely, ranging from a simple aesthetic issue to a major structural integrity problem. When such defects occur, distributing liability and determining who failed to follow the property standard of care and why can be an extremely complex task.

How Does the Construction Defect Litigation Work?

The biggest issue with construction defects is the amount of litigation it involves. Construction defect litigation is a complex, costly and long process, unlike other types of construction litigations.

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Depending on the defect occurred, a lawsuit can include several defendants, anti-indemnity statutes, varying insurance policy coverages, and fact-intensive discovery procedures. In other words, construction defects litigation can be great for construction lawyers, but for the construction businesses, it’s no less than a nightmare.

Here are some of the major challenges that may have to be faced during construction defects litigation

Determining Damages

If you are sued on the basis of an alleged construction defect, then you not only have to pay to defend your business, but you might also have to pay for any number of damages that occurred. It can be quite challenging to determine the scope of damages, as there are numerous considerations that can affect the award.

For example, what was the extent of the defect? The court may include the decline in property value, cost of repairs, court costs, loss of use, and sometimes even the punitive damages. And if there are many defendants, then the court will also need to determine how to allocate liability amongst everyone.

Timeline to File Lawsuit

Another challenge that comes with construction defect litigation is the time. Mostly, defects are noticed long after a project has been completed. Whether a lawsuit can be filed after the discovery of the defect is determined by the state’s statute of repose. Instead of calculating the time from when the damage occurred, they start the clock from a particular event (usually the project’s completion date).

Depending on the state, this timeline can be as short as 4-5 years or as long as 20 years. So construction companies could find themselves defending a litigation from a project that has been closed in their books years ago.

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