Posted November 8, 2021
Katharine A. Fina, a Partner with Florio Perrucci Steinhardt Cappelli Tipton & Taylor LLC, was recently quoted in an article for the New Jersey Law Journal. The article discussed a precedential decision by the Appellate Division of the New Jersey Superior Court. This is the first time the Appellate Division assessed the New Jersey Prompt Payment Act with regard to fee shifting in construction cases. Basically, the Appellate Division ruled that the prevailing party can be awarded attorneys’ fees and costs even if those fees are greater than the damages being sought. This is good news for construction subcontractors, vendors, and suppliers who do not get paid for their services by owners and general contractors.
Fina says in the article, “Owners and general contractors will absolutely need to be more aware that they need to pay their subcontractors on time, but the subcontractors are also going to be more willing to go after and seek collection of these payments with the threat that they can obtain legal fees and attorneys’ fees without incurring the detrimental economic cost that they may have previously incurred.”
She adds, “You will see owners and general contractors promptly paying their contractors or subcontractors and a decrease in litigation generally on these types of claims, in addition to seeking early settlement of these types of claims for fear of not only incurring large legal bills of their own but paying the contractor’s or subcontractor’s legal bills.”
This ruling should deter general contractors from using litigation and the legal system to delay payment to subcontractors who have fulfilled their contractual obligations.
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