The Scale of Justice

If you have a general contractor dispute, try some simpler resolution alternatives before you call in Perry Mason.

Skipping court altogether

Sometimes the best way to resolve a general contractor dispute is to avoid legal proceedings. Talk to your contractor about one of the options below if you can’t see eye-to-eye. Indeed, your contract may require the parties try one of these options before turning to the courts.

• A state or local agency. Your state’s contractor licensing agency may have a resolution program for general contractor disputes. Your county may have one as well.

• Mediation. Typically, this is a retired judge or senior construction litigator who hears the respective positions of both parties in the general contractor dispute. Mediators help each party understand the other’s point of view and facilitate a settlement. Their opinions aren’t binding on either party.

• Binding arbitration. Similarly, a judge or litigator will act as the arbitrator and hear both sides of the story in a general contractor dispute. Arbitrators will render a decision, which is binding on both parties. If it’s not to your liking, you have no right to appeal.

Local courts may recommend mediators and arbitrators. Also, you can find mediators and arbitrators at the nonprofit American Arbitration Association. Costs vary widely by location and the level of complexity, but as both parties share the cost, you’ll probably spend less than you would in litigation.

Small claims court—no lawyer necessary

If you can’t agree on mediation or arbitration, try small claims court, which differs from traditional civil court:

• They’re limited to small amounts, with upper limits usually in the $3,000 to $5,000 range.

• They assume you won’t be using an attorney and tend to provide user-friendly instructions on procedures.

Rules can vary from one state to another, but you will find some generalities:

• The jurisdiction of the dispute may be defined in your contract but, if it isn’t, you can file in the county where your contractor is located, where you live, or where the property is based.

• Contact the clerk of the court to obtain and file the necessary paperwork—most courts make the information available online.

Filing costs average around $50, and you may incur additional fees for collection if your contractor loses and still doesn’t pay. You’ll need solid documentation to show you were harmed.

The process is usually less expensive than civil court and often a lot less painful, although you may have to do a lot of prep work and there’s no guarantee.

Civil court—get a good lawyer

If your dispute is more than the amount allowable in small claims, start your journey through the legal system. Find an attorney with extensive experience in contractor litigation.

Your attorney can guide you through the process, and you’ll be out-of-pocket for filing expenses. Filing fees will run from $250 to $800 depending on the court in which you file, according to Jack Harari of the Manhattan-based law firm Weidenbaum & Harari.

You’ll also be looking at attorney’s fees, which can be paid on a contingency basis (a percentage of what’s recovered), or on an hourly basis ($200 to $500 per hour).

By: Barbara Eisner Bayer

Published: February 24, 2011

Barbara Eisner Bayer has written about personal finance for the past 17 years. She’s luckily avoided construction litigation, but once brought a deadbeat to small claims court and won.