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Recent legal trends in the Wisconsin construction industry

Written by: Chad William Koplien

Reputation Level 12

Construction Real Estate

Posted over 3 years ago. Applies to Wisconsin, 40 helpful votes, 0 comments

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Owner Defaults

With the increase of owner bankruptcies and defaults prior to a project's completion given the current economy, it is critical to ensure that all general contractor/owner/lender payments are current. Contractors have to make sure that payments aren't falling behind.

Consumer Protection Laws

There is a proliferation of the enforcement of consumer protection laws by the courts in the home improvement construction industry. Contractors face significant liabilities under ATCP 110, and this Administrative Code Chapter should be reviewed by the legislature with the input of the industry to accomplish a more balanced approach in my view.

The Costs of Litigation

The costs of arbitration are rivaling the costs of litigation. Litigation is too expensive to efficiently resolve disputes, and arbitration was not the savior that many authorities believed would solve the high costs of litigating construction disputes in circuit court.

The Importance of Problem Solving Lawyers

Owners and contractors need to retain lawyers with a good reputation and experience in construction litigation. Both are best served by lawyers with a reputation for resolving construction disputes, not engaging in protracted "Rambo" litigation and salt-the-earth strategies designed to milk the case for fees.

The need for contractors to understand and review Comprehensive General Liability ("CGL") insurance policies

Contractors should review their CGL policies with experienced insuance brokers to ensure the best coverage in construction litigation. Many times a contractor has coverage and fails to tender the defense to its insurer which could save tens of thousands of dollars in legal fees, not to mention coverage for liability.

Additional Resources

This current tight market -- particularly where development projects are going belly-up, banks are getting nervous, condo sales are down and the cost of materials are impacted by the high cost of energy – generates a higher proclivity for parties on both sides of the fence to sue. My advice to both owners and contractors is that litigation is almost always a poor investment and an inefficient mechanism for resolving construction disputes. Better to invest on the front end with a good construction contract with built-in litigation disincentives.

Conduct an Internet search for additional web articles and information on the issues discussed above.