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Pilot scheme for adjudication in professional negligence claims relaunched

The pilot scheme for adjudication in professional negligence claims, first introduced in February 2015, has recently been relaunched.  For parties to professional negligence disputes, the scheme is an alternative to Court for the resolution of the claim, or particular issues within it.

The scheme was intended to enable parties to bring about a resolution of professional negligence disputes by an early adjudication, at relatively low cost, similar to the scheme in place for construction disputes. However, when the scheme was launched initially the uptake was not as good as was hoped for. In May this year, the scheme was updated and refined under the supervision of new Judges with a view to encouraging greater participation.

The Scheme

Following the first launch, adjudication was written in to the Pre-Action Protocol for Professional Negligence as a means of alternative dispute resolution. It is a method of resolving either the whole dispute, or a discrete issue, without the need to go to Court. The Adjudicator is selected by the Chairman of the Professional Negligence Bar Association from a panel of specialist professional negligence barristers. His or her role is to make an impartial decision on the facts.

The scheme is voluntary; both parties must agree to participate and it is available at any stage of the dispute. Once the Adjudicator has been appointed they must provide their full reasoned decision within 56 days of appointment. The parties are entitled to a short hearing or telephone conference, but that is not compulsory.

The Changes

The rules have now been updated and streamlined, to encourage more parties to take part. The key changes include:

  • The scheme now applies to claims against all (non-medical) professionals, whereas it had previously been limited to claims against solicitors.
  • There is no cap on the maximum value of the claim, whereas the scheme had previously been limited to claims with a value up to the £100,000.
  • The Adjudicator’s costs are now banded with reference to the complexity of the dispute, meaning greater proportionality.

Consideration for professional negligence lawyers and their clients

Parties to all disputes continue to be encouraged to take part in alternative dispute resolution processes, and this invariably forms part of the advice that professional negligence lawyers provide. The changes to the scheme mean that adjudication is now very much an option for many professional negligence disputes (though the guidance suggests cases where complex expert or witness evidence is required might not be suitable).

For the parties, one of the benefits of participating in the scheme is that it could bring about a quicker and less expensive resolution than many other forms of dispute resolution. The short timeframes mean that the scheme may be appealing to litigants seeking a swift resolution, but it might be equally appealing to those looking to resolve a discrete issue which has become a sticking point in the course of the litigation. The flexibility surrounding the extent of the Adjudicator’s involvement and the ability to decide whether or not the decision will be binding, coupled with knowing the Adjudicator is a specialist in the area, might also encourage parties to try this process as an alternative to other forms of alternative dispute resolution.

The success of the scheme remains to be seen, but given the widening of the rules both in terms of the value and type of case, it is certainly expected that there will be greater participation in the scheme than there has been over the 18 months or so since it was first introduced.

This article was prepared by Sarah Holland. If you'd like to discuss the issues in the article please contact Sarah.