Suing the Builder: Why strata claims become problems for strata managers and committee members

In Melbourne strata land, suing builders has almost become a rite of passage.

Defects, cladding, water ingress, insurance problems appear. The AGM fires up.

“We need lawyers.”

And off they go - full steam ahead into litigation.

Yet years later, after eye watering legal spends and expert reports thick enough to stop a door, many Owners Corporations are left asking the same questions:

• How did we spend so much money?
• Why weren’t we told it would cost this much?
• Why are we still waiting to get a result?

Here’s the truth:

Building defect claims pretty much live or die on 2 key things!

Yep just 2️ . There are others but let’s keep it simple and not descend into legal jargon where costs go through the roof.

Strata manager and committee members should be laser focused on the following:

1. Cost effective strategy

The most expensive solicitor isn’t the safest pair of hands.

The safest pair of hands is outcome focused lawyers who know how to get from A to B at the minimum cost.

Cost effective lawyers (not “fancy” lawyers)

What matters is whether the solicitor:

• Knows effective strata defect litigation strategy
• Knows how to run a claim proportionately
• Know clearly what it will cost and where the settlement money is coming from

Owners Corporations don’t need 10 page letters copied to everyone with an email address or long winded letters of advice….They need outcomes. Fast!

Every dollar spent on inefficient legal work is a dollar that never makes it back to lot owners.

2. Expert evidence: the real assassin

If legal fees are the problem that forces the OC to settle for less, expert evidence is what makes the defendant or respondent offer less…

You can have a strong case but can still lose because:

• The expert is not truly independent
• The report reads poorly
• The opinion can’t survive cross-examination
• The expert has had limited experience in a courtroom fight

Tribunals and courts don’t decide defect cases based on vibes. They decide them on expert evidence. Full stop.

Weak experts sink strong claims. Strong experts entice early settlements.

Owners Corporation managers sit at the centre of this process. You’re not the lawyer, but you are often the gatekeeper to great legal concept.

Don’t assume general commercial lawyers or OC lawyers are plaintiff defect litigators, the most important questions are rarely asked upfront:

• Is this solicitor cost-effective?
• Is this expert the best we can get?
• What’s the realistic recovery after fees, experts, and time? AND who is paying.

Because “winning” a $1.5m claim after spending $1.2m getting there isn’t really winning.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• building disputes