The threat of construction defect litigation looms large for every contractor. It can severely impact a contractor's reputation, financial stability, and client relationships. To shield your business from such disputes, it is essential to adopt a proactive strategy.
This involves understanding and mitigating risks, stringent quality control, and maintaining adequate records. Here are four crucial steps that can help any contractor reduce exposure to litigation.
1. Understand Your Construction Defect Risks
Awareness is the first step towards prevention. Contractors should start by getting input from project stakeholders and evaluating deficiencies on past projects.
This understanding can provide an insightful forecast of potential project issues so preventive measures can be taken.
● Get Input from the Customer and Design Engineers: Ask them to highlight critical requirements that they are concerned about. Obtain additional input from specification reviewers about details that pose construction risks from their point of view. These items will set priorities for prevention during construction.
● Analyze past deficiencies: Review deficiencies noted in past projects. Each of these points represents a learning opportunity and a chance to preempt future repeats.
● Learn from others: Seek out advice from experts. Ask insurance underwriters about claims to avoid. Subcontractors love to talk about mistakes made by prior trades and competitors. Customers may share problems they’ve had on other projects. This knowledge can guide your risk management strategies.
2. Reduce Risks
The best defense against litigation is to ensure that defects do not occur in the first place. Minimizing the possibility of defects starts right from the planning stage and extends to the choice of materials and personnel:
● Design for Constructability: Design out problematic materials, construction details that pose unnecessary risks. Specify acceptable makes and models when generic specifications are not adequate.
● Enhance critical specifications requirements: Your project's construction specifications should be meticulously detailed for possible problem areas, leaving no room for ambiguity about the expectations or accountability for compliance. Your construction team will know how to build it the right way and recognize when it is not.
● Qualify your team: Rigorously vet all field superintendents, material suppliers, and subcontractors. Your selections should be defensible, based on proven quality performance and credentials.
● Include Division 01 QAQC clauses in your subcontracts: Ensure that all subcontractors are clear on the QAQC provisions and what is expected of them. At minimum this should include a requirement to inspect job ready conditions before they start, and then their own completed work for compliance with the project specifications.
3. Control Known Risks
Once risks are minimized, the next step is to control remaining risks through diligent quality assurance and quality control (QAQC) processes. This involves not just setting up processes but ensuring they are followed rigorously.
● Task Completion inspections: Before work starts, review the specifications with subcontractor crews so they know what you expect and what you will inspect when they are done. Follow this up with rigorous completion inspections that verifies that work tasks complies with project specifications.
● Document and address defects promptly: If defects are identified, document them on punchlists or inspection reports along with immediate corrective actions taken to prevent coverup. Record any delays and additional costs incurred due to these defects.
● Develop a QAQC plan: Prepare a comprehensive QAQC plan listing all the above inspections, tests that appear in the specifications, code inspections, and hold points for third party inspections, detailing who is responsible for each.
4. Maintain Adequate QAQC Records
In case of litigation, your ability to present detailed and organized QAQC records can be your best defense and may in itself discourage legal action. These records prove your commitment to maintaining high standards and can demonstrate that any incidents were isolated rather than systemic.
● Daily reports: Use daily reports to document all critical project activities, challenges, progress, and the conditions on site, including a walk-around photo survey.
● Centralize QAQC communications: Utilize your QAQC system for all communications related to deficiencies and their corrections to ensure that all data is preserved.
● Keep logs of QAQC activity. Maintain digital logs of all inspection activities, complete with time stamps and GPS data to verify the authenticity and accuracy of the records.
The FTQ360 app provides an inspection and QAQC platform for implementing these four steps and significantly reduces the likelihood of construction defect litigation.
Learn how contractors are using FTQ360 tools to avoid costly litigation.
