What are the facts? Think of it as a set of columns. In the left column go the good facts: They delayed us. They dramatically changed the project parameters in midstream. They lost their original project manager. The general contractor did not know what it was doing. In the right column go the bad facts: Our code was flawed. We had trouble manning the job. Our supplier was delayed. In the middle column go the important facts that favor neither side. (Important note: Will your opinion of the strength of your position survive a detailed review of the project file and your employees' e-mails?)
What is the law? What do the applicable contracts say? What does the law say once the facts are plugged into the contracts? Do we (or they) have lien or bond rights? Do we (or they) have a right to reimbursement of our attorneys' fees? (Important note: Did you give notice of your position-not just once, but repeatedly?)
What are the economics? How much is at stake? What are the odds of success? What are the hard expenses (lawyer fees and expert charges) and the soft expenses (disruption to our business) of going forward? Is litigation really worth it? (Important note: It may be the case that the economics do not even justify inquiring deeply enough to know whether the claim is good or bad!)