Construction Law Update - Adjudication for Professional Negligence Claims

by Peter Rolph, 18 July 2016

Adjudication has since 1996 been a familiar way for construction disputes to be resolved. It avoids lengthy and costly Court proceedings and imposes an enforceable decision unlike mediation where the parties are only bound to the solution if they both agree.

Adjudication Pilot Scheme

A new pilot scheme has been relaunched on 25th May to extend the scope of adjudication to professional negligence claims with the support of senior High Court Judges.

The scheme, although similar to the familiar construction based adjudication, does have its own features to achieve a quick and fair decision with costs controlled for both parties.

The adjudication pilot scheme now extends to a wide range of professional advisers including solicitors, accountants, surveyors, valuers and “so forth”, so the remit is wide for these types of dispute.

It does not cover disputes that are genuinely complex which require complex expert evidence to resolve or genuinely the dispute needs witnesses to attend and be cross-examined in detail regarding key factual disputes.

Advantages of Adjudication

Adjudication provides a real prospect of providing a fair result where the real financial value is modest so Court proceedings are disproportionately high or when one party lacks sufficient funds to take a genuine claim forward.

Since the adjudication scheme has cost implications the parties may prefer this to mediation.

The parties must agree in writing for the dispute to be referred to adjudication under the scheme and agree what the “dispute” is being referred and then must agree to be bound by the adjudication rules.

The adjudication scheme sets out the usual procedure with various costs bans specified for different types of dispute.

The parties can agree for the adjudicator to be given the authority to award costs and his own fees. It is a more flexible and straightforward process than Court based proceedings where the amount of time, cost and stress all take a toll on a Claimant already unhappy with a dispute against a professional adviser.

It gives another proportionate dispute resolution option in the armoury to help resolve disputes quickly without excessive unknown costs but in a fair way to achieve a just outcome.

It is a confidential process and one commended by the Judges who introduced the scheme. It will be interesting to see the uptake and how professional indemnity insurers embrace the scheme.

As the Judges themselves said in the introduction, Alternative Dispute Resolution in all its forms presents real advantages to parties involved in disputes. While the scheme remains fully voluntary and both parties must agree to accept it, it is another option to consider to resolve disputes in a timely, cost effective and fair way.

Contact our construction solicitors

If you have questions for our construction solicitors regarding the adjudication scheme for professional negligence claims, please contact Peter Rolph by email, peterrolph@steeleraymond.co.uk, or by telephone, 01202 204 535.

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Peter Rolph

Managing Partner
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