Construction Defect Special Report
by Ned Barnett
(opinion)
Construction Defects – Some Insights on a Cottage Industry

Cindy Nevin, Executive Director of the Nevada Subcontractors Association, is a true veteran of the “construction defect wars.”  She has fought the good fight in Carson City – and wherever she can find legislators to button-hole – for years.  In those years, she has seen West Coast Casualty’s Annual Construction Defects Seminar, held in Anaheim in May, grow from 200 attendees 10 years ago to more than 1,200 attendees this year.  And as she’s watched interest in construction defects grow, she’s also noted that it’s become what she called – quite accurately – a “cottage industry.” 

In an immense ballroom at the host hotel, a ballroom set up to serve meals to all 1,200 attendees, forty or so vendor display booths and tables circle the walls.  Most of these vendors are either trial attorneys or what’s called “expert witnesses” – professional hired guns, eager to hire out their expertise – and testimony or legal acumen – to plaintiff or defendant with equal impartiality.

It’s all about money, and message.  The party that’s first to the table with the money gets their story represented by the best attorneys and told to the court by the best experts – or at least the best experts money can buy.

This is good business – but is it good law?  Is it justice?  Apparently so – the best justice money can buy.

What’s remarkable is that the same judges see the same experts – and the same attorneys – case after case.  On Monday, expert Bob and attorney Chuck might be representing and testifying on behalf of the defense.  However, on Wednesday, the same judge might see Bob and Chuck putting forth their best professional efforts on behalf of the plaintiff.  Yet in each case, the judge accepts the pleadings of the attorneys, and the testimony of the professional experts – and does so, apparently, without so much as a raised eyebrow.  In the background, insurance carriers are negotiating to strike deals that may do more to protect their own bottom lines than to serve the needs of the clients who’ve hired them to provide protection from the consequences of construction defects lawsuits.  While they don’t represent both plaintiffs and defendants, of course, they strike deals with both, representing what – to an impartial outsider – seems like nothing so much as their own parochial self-interest.

As Cindy Nevin noted, it’s a cottage industry.  The key players – the attorneys, the expert witnesses, the judges – and very often the insurance carriers – are all part of the “insider” group.  Those on the outside are the construction companies.  These insiders’ loyalties are not given to their clients, or the legal process – or even, it sometimes seems, to the truth.  Rather, their loyalty is to one another.  An attorney pushing hard against a contractor – and his insurance company – knows that tomorrow he might be defending another contractor, and working hand-in-glove with that same insurance carrier.  The expert witness who’s defending the work of one contractor today may be ripping apart another contractor next week.  The process, much akin to the political process visible in state capitols when the legislature is in session, makes for strange bedfellows.

Contractors facing a construction defect suit should remember what President Reagan famously said about nuclear disarmament: “Trust, but verify.”  At the end of the day, the only one on the contractor’s side is … himself.

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