Legal Bullies on the Prowl

Everyone groans about the litigiousness of society these days. It has certainly had an impact on the construction industry. The costs of defending consulting engineers against client lawsuits has spiked insurance premiums to such a degree they are becoming insupportable (see story page 46). Even when engineers are not to blame, they are often dragged into the dispute. There’s not just the financial cost, there’s a deep emotional cost too. We all dread a lawyer’s letter landing on our desks. Human nature being what it is, no matter how much we know rationally that we’re not at fault, there’s always that queasy feeling of guilt in the pit of the stomach. It’s the reason we avoid looking at police cars when they drive by.

The rising cost of premiums for professional liability insurance — up by 50% last year in some cases — has come to a point where engineering organizations have realized they have to do something. In Alberta, the professional association has an insurance task force that favours lobbying for reform in one area of the law: joint and several liability. This highly unfair legal principle means that even if an engineer is only responsible for a small part of the problem with a building, they can end up having to pay the entire amount of a million dollar settlement if their co-defendants such as the contractor have gone out of business.

While we all want to see people treated fairly under the law, there comes a point when financial reparations have become too costly for society to reasonably bear. A Swiss Re publication cites a study in the U.S. that showed the tort system there cost $205 billion in 2001, or an astonishing $721 per U.S. citizen. The report said, “at current levels, U.S. tort costs are equivalent to a 5 per cent tax on wages.”

While Canadians aren’t rushing to the courts as often as in the U.S., class action suites and frivolous claims here are mounting.

Reading through these frivolous cases is both entertaining and frustrating. There’s the man suing the Ontario Lottery Corporation for his own gambling addiction, or the teenager who sued a Newfoundland power company after he climbed a tower as a prank and received 66,000 volts. Whether they’re cases against the government and public purse, or against private entities like engineering consultants, we all end up paying the price.

The construction industry has not only to deal with unwarranted lawsuits from people injured in buildings by their own irresponsibility, but it also has to suffer claims from clients who treat the consultants’ insurance coverage like a slush fund. In many cases the owners don’t expect to win in court, but they know the mere threat of legal action will be enough to make the engineers and architects agree to pay a settlement.

That is what is most disturbing about this litigious environment: people wield the threat of a lawsuit as a bullying weapon. Such is our fear of the courts and mounting legal fees, we have to assume guilt, pay up and shut up. Unfortunately, that’s not justice, that’s blackmail.