Proving Construction Contract Damages: Maximizing Claims, Seeking Equitable Relief, and Recouping Attorney's Fees

Description

Calculation of damages for a change order or a construction claim is paramount to successfully pursuing or defending a claim, and is ultimately predicated on the basic theory of liability – contractual, statutory, or tort liability. Invariably, claimants seek monetary damages, and attorney's fees where allowable by contract or statute, though there may be a basis for equitable relief such as specific performance or rescission. Having contractual provisions regarding entitlement to, or quantification of, damages is of critical importance. Oftentimes, these provisions are the subject of litigation because they are not artfully drafted or function in unintended ways.

Counsel must present experts to assist with valuing and supporting damages and establishing liability. However, the cost of such testimony is an added expense that can be significant depending on the subject matter of the expert testimony needed. While precise proof of damages is not necessary, courts require proof of damages with a "reasonable degree of certainty."

All too often claims are dictated by the attorney’s fees that will be, or are incurred. Without a basis to recover attorney’s fees (either by contract or through a statutory claim that provides for fees), some claims are simply not economically feasible to pursue. Therefore, prior to bringing a claim, it’s important to determine whether fees will be recoverable. While Proposals for Settlement (“PFS”) can provide an alternative basis to potentially recover fees where claims do not otherwise allow for their recovery, there are limitations to PFSs which counsel and parties must recognize. And where there is a basis to recover fees, it is equally important to not let fees “drive the train” and derail potential settlement opportunities, since “prevailing” on a claim doesn’t always translate into being deemed the “prevailing party” for purposes of fee entitlement depending on the nature of the claim asserted.

Listen as our authoritative panel of seasoned construction practitioners provides in-depth advice on presenting the necessary evidence to prove damages in a construction dispute claim. The panel will focus on strategies for avoiding common pitfalls and provide insights to help reduce the likelihood of disputes.