Professional Negligence Pilot: Adjudication Re-launch
The Adjudication Pilot for Professional Negligence Claims has been significantly expanded and re-launched.
The scheme now applies to claims against a wider range of professionals (it was originally limited to claims against solicitors), the previous £100,000 cap on the value of claims has been removed, and new fee bands apply.
The Adjudication Pilot for Professional Negligence Claims was originally launched in February 2015, see blog post
Ramsey J set out in the foreword, that
".....adjudication is particularly appropriate in resolving disputes in professional negligence cases where without some fundamental view on the merits, the parties may not be able to resolve their dispute...."
Changes to the scheme, intended to improve the previously poor take up, have been made by a working party set up at the direction of the Master of the Rolls. The scheme rules have been amended and now include detailed guidance, and the scheme is extended to apply to claims against a wider range of professionals. The previous £100,000 cap on the value of claims in the scheme has been removed, and new fee "bands" apply.
The scheme, based on the statutory adjudication scheme for construction disputes, should enable parties to professional negligence disputes to obtain a quick adjudication of their dispute at relatively low cost. The adjudicator provides a written reasoned decision within 56 days of appointment, which will be binding unless altered by a court or arbitral tribunal (unless the parties opt for finality). In their introduction to the new pilot, Mrs Justice Carr and Mr Justice Fraser commend its use.
Points to note include:
- The scheme is voluntary.
- There is no precise definition of "professional negligence disputes", but the guidance states that the scheme is intended to apply to disputes
"between professional persons such as lawyers, valuers, accountants and so forth and their clients"
- Not all professional disputes will be suitable for the scheme: for example, cases that genuinely require complex expert or witness evidence on issues such as breach of duty or causation.
- Therefore, it is probably not suitable for medical negligence cases or disputes centred on allegations of dishonesty. The guidance notes also provide examples of circumstances when the scheme might be particularly attractive.
A handy pilot pack provides copies of the rules and guidance, as well as details of the adjudicator panel, and how to provide feedback, or raise queries, on the trial.
With the recent and ongoing substantial increases in Court issue fees and application fees, and delays in court proceedings, parties are looking widely at Alternative Dispute Resolution. Options include Mediation and Early Neutral Evaluation, which could be utilised before the alternatives to Court proceedings such as Arbitration and Adjudication. The latter has proved successful in construction disputes, where it can be imposed at the election of one party. This is because Adjudication is implied in to construction contracts by statute. However, early procedures for negotiated settlement are usually a first choice, before incurring costs of formal proceedings, whether Adjudication, Arbitration or Court.
Given the support of the judiciary and the high caliber of the Adjudicators involved, it is surprising that take up of the initial pilot scheme was low. Reasons may include:
1. Adjudication isn't common outside of the construction industry, and both lawyers and their clients may be reluctant to engage in an unfamiliar process.
2. Adjudication is suited to issues where the facts aren't widely disputed, and where only two sides are involved.
3. Adjudication is subject to tight time scales and is concluded relatively swiftly.
4. Adjudication is often seen as providing a rough and ready result.
5. Opportunities to challenge the Adjudicator's decision are limited.
6. Often, insurers are representing one of the parties in a professional negligence dispute and Iinsurers may be unwilling to bind themselves to Adjudication.
7. With its accelerated decisions, "mission fatigue" for the Claimant isn't a significant factor in Adjudications, (unlike Court proceedings).
8. An unsuccessful Defendant has to pay what the Adjudicator awards – the Court would be unlikely to grant any stay of execution.
9. If a Claimant wins on Adjudication, the Defendant has to start proceedings to reclaim the money paid whilst also paying for costs of the Adjudication (if awarded), and carrying the costs and delay of Court proceedings.
It may be that with the revised fee scale for the Adjudicator's fees, delay and increased expense of Court proceedings (including imposition of "costs budgeting"), and increasing awareness, the scheme coud become more attractive to parties considering an alternative.
Paul Sykes is a Director in our Disputes Management department. For further information regarding business disputes / negligence claims contact Paul.Sykes@luptonfawcett.com
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.