How Much Does a Construction Defect Lawsuit Cost?

The cost of a construction defect lawsuit can range from manageable expenses to many thousands of dollars, depending on the size and complexity of the claim. Beyond attorneys’ fees, homeowners may also pay for inspections, expert witnesses, filing fees, depositions, mediation, arbitration, and other litigation costs. Before filing a claim, it is worth looking at both sides of the equation: what it may cost to pursue the case versus how much you could realistically recover.

For legal help with a construction defect claim, speak with a construction defect attorney who can evaluate your potential recovery,

How Much Does a Construction Defect Lawsuit Cost?

It’s easy to say you will sue a contractor when you discover a defect in your home. However, you need a much more complex analysis before filing the lawsuit paperwork.

Understanding where the costs come from can help homeowners evaluate the viability of their claim.

Attorney Fees

Legal representation can be one of the largest components of litigation expense. First, understand how lawyers charge for their services. Some lawyers will use hourly billing. The homeowner pays for the attorney’s time as the case progresses. With this billing structure, a lawyer’s services can become more expensive as the case progresses. Preparing for trial takes more time, which increases attorney costs.

Some lawyers will charge a contingency fee. The attorney receives an agreed percentage of the recovery rather than billing the client by the hour. Ask the lawyer what percentage they will take and how they calculate it. You may also have to pay court fees and other costs upfront.

Depending on the attorney and jurisdiction, representation could involve a combination of fee structures. A contract may also dictate who pays litigation expenses, regardless of whether the case succeeds.

Expert Witness Fees

An expert may need to determine what caused the problem and whether the work involved poor workmanship or substandard materials. They can testify as to whether there were violations of building codes or applicable construction standards. Experts can also explain what it will take to correct the problem.

Expert witnesses typically have specialized knowledge of construction, engineering, architecture, and building systems. The expert may also have to explain whether the contractor’s work caused the property damage.

Experts can also play an important role in determining the measure of damages. A homeowner may need evidence showing how much it will cost to repair or replace defective work.  If defects involve different areas of construction, you may need multiple experts.

Court, Arbitration, and Other Litigation Costs

Courts have their own fee schedules that you must pay. To initiate the case, a plaintiff pays court filing fees.

You may also incur court reporter, process server, deposition, document procurement, and discovery-related fees. If the parties participate in mediation or arbitration, they also incur administrative fees.

What Usually Makes a Construction Defect Lawsuit so Expensive?

Complexity generally increases the cost of construction defect litigation. Litigation expenses tend to rise when multiple defects must be addressed, repair costs are high, multiple contractors are involved, and multiple insurance policies apply.

These factors can require multiple experts, extensive discovery, multiple depositions, and repeated property inspections.

Economic damages are not always proportional to litigation costs. A relatively modest claim can still require technical investigation and expert testimony.

Can a Homeowner Recover Attorney Fees and Court Costs?

Winning a construction defect lawsuit does not necessarily mean the builder must pay your attorney’s fees. Under the American Rule, each side generally pays its own attorney fees unless a legal basis exists to shift those costs to the other party. That means even a homeowner who proves a construction defect and wins the case may still be responsible for the legal fees incurred.

Exceptions to the general rule exist, though. Some contracts contain provisions allowing the prevailing party to recover attorney fees when a dispute arises from a breach of contract. Some states have statutes that allow homeowners to recover attorney fees and litigation costs in particular circumstances.

However, requirements to qualify can vary significantly by jurisdiction. A construction defect dispute may also involve a state consumer-protection law that permits attorney fee recovery.

Even when a contract or statute permits fee recovery, don’t assume you will get back every dollar you spend. The amount awarded can depend on the applicable law, the contract terms, and the court’s or arbitrator’s decision.

Ways Homeowners Can Manage Construction Defect Lawsuit Costs

Homeowners can take several steps to manage litigation costs proactively. First, have a lawyer evaluate the case before filing any paperwork. That way, they can go into the lawsuit with a clear understanding of what to expect. A lawyer can also advise on the case’s viability.

Another way to manage costs is by hiring the right experts, not a lot of experts. You don’t need an expert witness for every issue. Avoid paying multiple experts to address overlapping issues unless the case requires it.

Resolving a legal dispute before trial can deliver significant savings. Property owners should consider alternative dispute resolution (ADR) options like arbitration or mediation.

If the builder is large, they may have done the same defect on multiple homes. Reaching out to other homeowners to join the lawsuit can reduce the individual cost for everyone. It can also help build a strong case because the defect is systemic. One option is to contact the community’s homeowners association (HOA), which may have its own claim.

Construction defect cases can involve multiple insurance policies and carriers. However, early notice of a claim is essential. Failing to provide the required notice can jeopardize insurance coverage.

When Is a Construction Defect Lawsuit Worth the Cost?

No single hard-line test determines whether a construction defect lawsuit is worth the cost. Property owners must decide for themselves whether the cost of pursuing a lawsuit is worth the potential recovery. Remember, no claim is guaranteed to succeed, and an unsuccessful claim does not eliminate fees and costs.

Consider several factors when deciding whether a lawsuit is worth the cost. The first is the potential recovery. Start by calculating the cost to repair or replace the defective work. Factor in diminished property value. Add any additional property damage associated with the defect. Calculate potential attorney fees and litigation costs. Compare this amount with the likelihood of recovering it from the defendant if successful.

Generally, litigation is more viable when repair costs are high, evidence of the defect is strong, and contractual or statutory liability is clear. Litigation is also more viable when the defendant is financially stable, or insurance is available.

Factors that make litigation less viable include low damages, difficulty showing causation, weak evidence, or uncertainty about who is responsible. Additionally, litigation may not be worth it if the defendant is insolvent or there’s no insurance coverage.

Seek Legal Advice

The cost of pursuing a construction defect claim depends on the case, but attorney fees and expert expenses can make even a strong claim expensive to litigate. A construction attorney can help you evaluate the potential recovery, likely expenses, and available legal remedies.

Find a construction defect lawyer through the Super Lawyers directory to discuss your claim.