Adjudication Scheme Trial for Professional Negligence Claims

Industry News

Professionals do inevitably make mistakes from time to time (really!) but the costs of pursuing a claim can be prohibitive and the process can be frustratingly slow. The Courts recognise this and a pilot scheme for Adjudication in Professional Negligence Disputes was launched in February 2015.  This scheme has now been relaunched in May 2016 in a much expanded version.  The main changes concern the availability of the schemes to include a wider range of professionals and the removal of the limit on the value of the dispute which had been fixed at £100,000.

Property practitioners will be familiar with adjudication since its conception in 1996 which has allowed parties to resolve disputes without recourse to litigation or arbitration. Whilst they can still resort to these processes, in a very large number of cases the parties are content to accept the decision of the adjudicator.  This is much faster and much cheaper than litigation and it is hoped that the same success will be experienced in the professional negligence sphere.

The adjudication scheme sits with other forms of alternative dispute resolution such as mediation. It can be instigated as part of the Pre-action Protocol in professional negligence disputes or indeed after proceedings have been commenced. Although the process is voluntary, as with mediation, it is expected that the Courts will take a dim view of those who unreasonably refuse to engage in the process and, as has been the case with mediation, possibly to look to impose a costs sanction against parties who refuse.  It certainly has the potential to alter the landscape for professional negligence disputes.

  • The adjudication process is consensual. It involves the parties simply filing a notice with the Court requesting the appointment of an adjudicator or providing details of a named adjudicator. The adjudicator is then appointed and within 5 working days of his appointment directions will be given for the exchange of witness evidence and/or submissions so that a decision can be provided to the parties in writing within 56 days of his appointment.
  •  The important distinction with, say, mediation, is that the decision of the adjudicator is binding and stands unless and until the dispute is determined in legal proceedings by arbitration or by agreement. Alternatively, the parties can go one step further by agreeing that the adjudicator’s decision is final.
  • Any sum awarded by the adjudicator is payable within 21 days and can be enforced by way of an application for summary judgment which can only be defeated if there is a jurisdictional challenge or procedural unfairness. It will not be a defence that the adjudicator erred in fact or law. Importantly, even if the parties have agreed that there is a right to deal with the case in subsequent proceedings the losing party on the adjudication must pay in the meantime.
  • The parties will be jointly liable for the adjudicator’s costs which will be within a set limit – but the adjudicator will have the power to require that the losing party pays all or most of his costs.
  • All documents produced for the adjudication, all statements made during its conduct, and the decision will be private and confidential in the same way that such information remains confidential in the course of a mediation save that the decision will cease to be confidential within 21 days of its release to the parties or in the context of any enforcement of the decision.
  • In the event that the parties have agreed to be bound by the adjudicator’s decision until the dispute is finally determined in subsequent proceedings all documents produced for the purposes of the adjudication, all statements made during its conduct and the decision itself may be disclosed in subsequent legal proceedings or arbitration.
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