Law suits shoot up as industry tightens purse strings

The construction industry has become more litigious since the downturn, a poll has revealed.

Consultant Tuffin Ferraby Taylor surveyed 250 of the UK’s leading construction lawyers and found that 67% have seen as rise in work over the past six months. Of these, most said they had about 30% more business than before. Two-thirds of lawyers expect this trend to continue in the near future.

Furthermore, some respondents said they were looking beyond conventional hourly fee arrangements and devising more creative approaches to their pay, to ease the financial burden on their clients. TFT suggests this is related to the fact that fewer clients are opting to go to court, with almost 70% settling cases through alternative dispute resolution methods.

David Tuffin, who heads up TFT’s expert witness team, said: “Desperate times are calling for desperate measures. In an ideal world there would be a more collaborative relationship, but the priority for everyone at the moment is protecting their assets.”

Most legal action is being taken by landlords, who are creating twice as many cases as contractors and developers. These are mostly against tenants who are going into administration.

Tuffin said: “In the past, property owners have been inclined to brush small defects under the carpet, but they are now finding the time and inclination to pursue contractors for mistakes made during the clamour to build fast in the past. They are also more reluctant to cover the cost of repairs caused by perceived lack of maintenance by tenants.”

The retail market has been most affected, led largely by the rise in insolvencies in the sector, while office, leisure and housing are close behind. The public sector, on the other hand, seems to be largely unaffected.