IT disputes at all-time low

Law firms have reported a sharp fall in the number of IT disputes reaching the courts over the past 12 months as more users turn...

Law firms have reported a sharp fall in the number of IT disputes reaching the courts over the past 12 months as more users turn to mediation to solve differences with their IT suppliers.

The number of IT disputes reaching the Technology and Construction Court in London has fallen from dozens a year to an all time low of one this year.

Adrian Lifely, partner at law-firm Osborne Clarke, said IT departments and suppliers had learned from past disputes and were putting more effort into solving problems at an early stage.

“There has been a sea change. The private sector has been very successful in reducing the incidence of litigation, and where disputes arise, resolving their disputes,” he said.

The experience of the Co-operative Group and Fujitsu Services, which are embroiled in a long-running legal battle over an electronic point of sale project, has acted as a warning signal to other firms. Businesses are now much more careful to clarify  their contracts before giving the go-ahead for the work, said Lifely.

“Users are no longer relying on general clauses saying the product will be fit for purpose. They are no longer relying on implied rights under law. They are specifying the quality of what they want and milestones for delivery,” he said.

Kiran Sandford, head of IT at law firm Mishcon de Reya, said users and suppliers were now spending much more time ensuring their contracts are right.

At the same time, the courts are putting pressure on companies to solve disputes through arbitration or mediation before coming to court.

“There have been several cases where parties have won but have been refused legal costs because they have refused to mediate,” said Lifely.

Small firms will not get off the hook simply because they are small – they will be expected to bring in outside help, he said.

Read more on IT for small and medium-sized enterprises (SME)

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