Industry faces rise in litigation expenditure

IT users could find themselves embroiled in increasingly expensive and time-consuming litigation, legal experts have warned.

IT users could find themselves embroiled in increasingly expensive and time-consuming litigation, legal experts have warned.

Mike Simons

SRL Consultants, a legal consultancy specialising in IT, has highlighted a severe shortage of IT experts with the right skills to act as expert witnesses in court. This has created a backlog of cases.

The backlog could exacerbate the difficulties facing IT users who attempt to use the legal system to extract damages from suppliers who have not their met contractual requirements.

Last week, Computer Weekly reported that WH Smith is suing Siemens and Fujitsu Siemens for £4.5m over an ERPproject.

Corporate politics are the biggest driver in computer litigation, according to SRL. "The executive who bought the wrong system can no longer share the blame with anyone in the organisation. He could take the blame himself or pass it on to the supplier," said SRL.

The aftermath of Y2K implementations is the second biggest cause of litigation. "Companies were often late buying a replacement system and, when they did, they gave it insufficient thought. So disputes about the bug arrived a year late," said SRL.

The fall of the dotcoms is set to provide a third growth area for litigation as disappointed organisations try to apportion blame for ill-considered investments and rushed software development projects.

Michael Gifkins, an independent witness and arbitrator, told Computer Weekly, "We are seeing more legal action, but this is because the IT sector is moving towards normal commercial levels of litigation."

The Woolf reforms, which were designed to speed up court proceedings and make them more cost-effective, fairer and proportionate, are also adding to problems said Gifkins. He said the reforms had increased the demand for the limited number of expert witnesses.

Nick Arnold, head of dispute resolution at law firm Tarlo Lyons, said the Woolf reforms were double edged. "It is now much harder for solicitors to go slow on cases," he said.

But Arnold agreed that a shortage of expert witnesses could affect litigants. "The good expert witnesses are run ragged," he said.

He also cautioned organisations about the amount of management and IT staff resources that have to be devoted to disputes and litigation. "There will be times when there is no choice about litigation," he said. "But, by and large, organisations and professionals want to move onto their next project and try to forget what went on in the past."

[email protected]

Read more on Data centre hardware