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ccording to a March 2025 report by the Economic Research Organization at the University of Hawai‘i (UHERO), construction litigation has been rising in Hawai‘i since 2001.
“A comparison of [Hawai‘i] case metadata and court filings with news stories and other public documents identified 57 distinct construction defect liability cases filed between 2001 and 2024 and none prior to 2001,” UHERO reports.
The report also shows this may be the tip of the iceberg: “Construction defect complaints that are resolved without court filings … will not appear in eCourt Kokua or any other public database. … Analysis based on public records alone, therefore, will underestimate the frequency and cost of disputes …”
A Likely Boom in Hawai‘i Cases
Like UHERO, most Hawai‘i builders are aware that potential disputes on a project can be hidden but are also in plain sight — a project’s bids, contracts, land and infrastructure issues, scope of work, building materials and contractor performance.
“Construction, by its nature, is imperfect,” says Jeffrey M. Osterkamp, a partner in the litigation department of Hawai‘i law firm Cades Schutte LLP who concentrates in construction litigation. “And the stakes are high enough that parties often feel that they need to make a claim — or resist a claim, depending on which side the party is on.”
Hawai‘i’s current boom is raising the stakes for all parties in construction litigation.
“With the increases in the size, numbers and value of construction projects, the [litigation] awards and settlement amounts inevitably rise as well,” Osterkamp says, and reports “construction litigation is most pronounced in [Hawai‘i’s] commercial sector.
“Unfortunately,” he continues, “owners, developers and contractors now need to expect litigation involving almost any large commercial project.”
Dana Bergeman, CEO and founder of Bergeman Group, which specializes in construction, project management and remediation in Hawai‘i, confirms that his firm has seen “a generalized increase in construction defects and corresponding construction litigation…
“We work mostly in the commercial and residential sectors,” Bergeman reports. “Generally speaking, we are observing construction defects in most sectors where we work.
“We regularly see a combination of installation errors, workmanship issues and material defects,” he continues. “For some material defects, we see them in multiple buildings and developments.”
While noting disputes over project delays are a large component of current Hawai‘i cases, Osterkamp also confirms “[material] defects are the focus of most litigation.
“In Hawai‘i, we depend on relationships,” he notes. “But even that factor can take a backseat when parties start arguing over defects, completion dates and the like.”
Establish Legal Counsel Proactively
“As long as the construction industry continues to grow, construction litigation and costs will rise as well,” Osterkamp concludes. “That appears to be with us for at least the near future.”
Bergeman says “the [best] advice we can provide, in all sectors, is for builders and developers to select proven and reliable products and invest in improving their quality control and quality assurance efforts. With better skilled labor, superior products and improved quality control efforts, problems with construction defects would likely be reduced.”
In addition, given Hawai‘i’s current construction boom and rising litigation, it makes sense for Hawai‘i builders to establish a relationship with legal services or counsel before disputes arise.
Bergeman Group’s litigation consulting services “span forensic field investigation to expert testimony at trial,” Bergeman says. “Our team of experts possess the skills needed to extract relevant facts, develop a suitable cost of repair and convey these critical components to counsel and client.”
The firm’s services typically include reviewing and evaluating testimony and/or reports of other experts or professionals, educating the client and legal team on complex construction issues so they can present data in an understood manner and generating detailed repair cost estimates and evaluating constructability issues.
“Sometimes early missteps are the dominoes that create the big problems down the road,” Osterkamp points out. “It’s crucial for contractors and others in the construction industry to have a source that can help with both contracts and litigation. We work in both areas, and our knowledge of each benefits our work in the other.
“It’s probably not realistic to run everything through a lawyer,” he clarifies. “But it’s best to refer larger contracts to an attorney, because the risks of not doing so are just too high.
“It’s helpful,” he says, “to have a relationship with an attorney who will pick up the phone and weigh in on the various questions a party might have.”
