Parties involved in construction and engineering disputes,
particularly contractors and subcontractors, are often advised and
represented by claims consultants. There are many businesses
operating in the UK and throughout the world who provide claims
consulting services. Some people in these businesses are practising
lawyers (solicitors or barristers), but many are not. They may
provide legal or commercial advice, but will not usually do so in
the capacity of a solicitor or barrister.
The capacity in which a claims consultant acts is significant
insofar as legal privilege is concerned. Privileged communications
are those between a solicitor or barrister and his or her client.
The effect of a communication being privileged is that it does not
have to be disclosed to an opponent or to the court (or tribunal).
This may be critically important to the success of a party's
case, because if the legal advice it receives is capable of being
disclosed and used in court, its opponent may be able to weaken
that party's case if the advice reveals perceived weaknesses in
its legal position, or it gives away that party's strategy and
objectives.
In a TCC judgment delivered yesterday, the court held that
communications between a contractor and its claims consultant were
not privileged. The communications in question concerned legal and
commercial advice relating to a dispute over an extension of time /
loss and expense claim for a project in London.
Commercial Implications
The implications of this case are serious for parties who use
claims consultants and for claims consultants themselves. To ensure
that privilege exists between a claims consultant and its client
for commercial and legal advice given, it will be necessary to
ensure that the claims consultant, or a person in the claims
consultant's team giving the advice, is a practising solicitor
or barrister. If this does not occur, privilege will not attach to
the communications, and they will therefore in principle be
disclosable (unless some other head of privilege exists, which it
may not).
Note, however, that the rules concerning legal privilege in
communications between clients and their non-legal advisors are
under review, and a major case will be heard later this year by the
Supreme Court on whether tax advice given by accountants attracts
privilege. The result of this Supreme Court case will almost
certainly have implications for claims advice given by non-lawyers
to their construction clients.
Other issues associated with using claims consultants may arise
where:
The claims consultant purports to act in a dual role of party
representative and expert witness. This is not permitted, as expert
witnesses are required to be independent of the parties, and not
act as their advocates or representatives.
The claims consultant's client is successful in the dispute
resolution process and an award of costs is made in its favour.
There may be an issue over whether, under the rules of the
procedure in question, the claims consultant's fees and
expenses count as recoverable "costs".
Claims consultants act on a contingency fee basis in court or
arbitration proceedings. A claims consultant who is a practising
solicitor or barrister currently may not recover his or her fees as
a proportion of any amount awarded (that is, as a contingent fee),
whereas a claims consultant who is not a practising lawyer may do
so. This is likely to change next year, with the implementation of
the Jackson reforms (which will permit practising solicitors and
barristers to act on a contingency fee basis).
Claims consultants certainly have a role to play in resolving
construction and engineering disputes. But it must not be assumed
that engaging a claims consultant is no different to engaging a
solicitor or barrister. There are significant legal differences
between the two, and care must be taken to ensure that the
client's interests are protected when a claims consultant is
used.
This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance
only. The information and opinions expressed in all Law-Now
articles are not necessarily comprehensive and do not purport to
give professional or legal advice. All Law-Now information relates
to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.
The original publication date for this article was
16/03/2012.
Specific Questions relating to this article should be addressed directly to the author.
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