Derry Irvine, in whose chambers both Tony Blair and Cherie Booth once worked, published plans last year for major reforms to the legal aid system. The Lord Chancellor's strategy is two-pronged: firstly to extend 'conditional' no-win/no-fee arrangements to all civil proceedings except family cases, and secondly to reduce legal costs and make them more predictable through the introduction of streamlining procedures.
The burden of litigation to the taxpayer is indeed enormous. The annual cost of civil legal aid has tripled in six years to £671 million, while lawyers' incomes have risen on average by 20 per cent a year over the same period. Lawyers also earn enormous income through insurance work. One pi company has revealed that of £1 million of indemnity premiums received from architects, £800,000 was ultimately paid in legal fees for the investigation and defence of allegations made against their insured.
Many lawyers claim that conditional fees will not cover some cases that would otherwise receive legal aid, especially those with a low chance of success, because lawyers would not wish to accept the high risks involved. Many of these relate to construction disputes. Lord Irvine retorts bluntly that weak cases should be kept out of court anyway, adding that through legal aid 'lawyers draw almost at will for doing the work they choose to do'. But I have considerable sympathy with the legal profession. The lawyers that I have worked with in construction litigation have consistently shown a high level of commitment to commercial pragmatism in the overall interests of their clients - whether individuals, companies, or insurers. Above all, they have shown the utmost integrity in pursuing their clients' interests, both when defending architects and occasionally in actions against them.
Nevertheless, the cost of litigation remains unacceptably high, and construction/pi- related litigation is no exception. That said, I think that nothing is gained by attacking the lawyers - rather, we should look at the legal system in which they operate and at the performance of the litigants they represent, who are themselves often responsible for their own misfortunes.
Our legal profession could serve us with greater efficiency if a larger proportion of cases were dealt with through alternative routes, which still involve the services of lawyers, albeit within a different and more economic system. I will look at a variety of alternative dispute resolution routes (adrs) such as mediation and conciliation, arbitration, and adjudication over coming weeks.
However, the architect should, wherever possible, avoid disputes in the first place. By far the majority of cases that come to me as an expert witness are in the form of counter-claims by the client against an architect's action for unpaid fees. Using the 'right of offset', many clients try their luck with spurious allegations of negligence as a basis for withholding fees due. These cases usually involve lawyers in unavoidable, lengthy and expensive pre-trial rituals. By then, legal costs have often exceeded the value of the claim.
One simple solution would be for architects to refuse to issue practical completion certificates until and unless 95 per cent of their fees are paid. Most clients value such certificates, and linking them to efficient billing would effectively reduce the balance of outstanding fees to sufficiently small amounts not to warrant litigation. Now there's a thought . . .