On 25 May 2016, a new pilot scheme for adjudication in professional negligence disputes was launched. The scheme replaces the pilot previously launched in February 2015. It is envisaged that the scheme, which is modelled on the statutory scheme for adjudication in construction disputes, will provide parties to professional negligence claims with a faster and more cost effective means of resolving a dispute than compared to litigating through the courts.
The scope of the scheme
The original pilot applied to claims against solicitors where damages were valued at less than £100,000. The new pilot scheme has a much wider application. It is intended to apply to claims against all professional persons (with the exception of medical professionals) and there is no limit on the value of claims.
The detailed framework of the scheme is set out in the Rules of the Professional Negligence Adjudication Scheme and there are Guidance Notes which accompany the Rules. The key elements of the scheme are:
- participation in the scheme is entirely voluntary, but once committed the parties are required to see the process through;
- once the parties have agreed to participate, an Adjudicator will be selected by the Chairman of the Professional Negligence Bar Association from a panel of barristers who specialise in professional negligence disputes;
- the Adjudicator will ask for evidence and written submissions from the parties; she/he may request a short hearing;
- within 56 days of her/his appointment the Adjudicator will provide a reasoned written decision; and
- that decision will be legally binding upon the parties unless and until altered by a court or arbitral tribunal (unless the parties have opted for finality).
The costs of the adjudication process are divided into three bands (a ceiling of £5,000, a ceiling of £10,000 and unlimited) according to the complexity of the dispute, and the time it is expected will be needed for the Adjudicator to produce a decision.
Whilst adjudication has been a widely used form of alternative dispute resolution in construction disputes for some time, it remains to be seen how the scheme will fare in the sphere of professional negligence. The Guidance Notes acknowledge that the scheme may not be suitable for disputes which genuinely require complex expert evidence or detailed factual evidence to be tested to enable a decision to be made on issues of breach of duty or, possibly causation. In circumstances where the determination of professional negligence frequently turns on a detailed examination of expert or fact evidence it is likely to mean that in practice the adjudication scheme will be of use for only a sub-set of professional negligence claims.
The Rules and Guidance Notes are available online: Professional Negligence Adjudication Pilot Pack – Launch date 25 May 2016.