A revised adjudication scheme for professional negligence claims has been launched recently, updating the original scheme that was launched in May 2015.

Take up was low under the original scheme and changes have therefore been made with the intention of encouraging increased participation in the scheme.

The key changes to the scheme are as follows:

  • The scheme is now open to all professional negligence claims - previously it was only available where the dispute involved a claim against legal advisers. There is still no 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".
  • The £100,000 cap on the value of any claim that can be adjudicated has gone - there is no longer an upper limit;
  • New fee bands have been introduced - the intention being to cap the fees payable to the adjudicator, depending on the value of the claim;
  • Detailed guidance notes on the scheme and its applicable rules have been issued.

The scheme is entirely voluntary and is based on the statutory adjudication scheme for construction disputes, although there are some differences. Adjudication for construction disputes is compulsory, whereas for professional negligence disputes adjudication is voluntary - both the claimant and defendant need to agree in writing that they will be bound by the provisions of the scheme.

It is therefore another form of alternative dispute resolution - although we wait to see whether there might be cost consequences imposed by the court if a party/the parties refuse to consider adjudication (as is currently the case if a party refuses to engage in mediation).

The aim of the scheme is to allow parties to professional negligence disputes to obtain a decision on their dispute quickly and at a relatively low cost. The adjudicator will provide a written reasoned decision within 56 days of his/her appointment. The decision will be binding and, if the adjudicator decides in the claimant's favour, compensation will be payable within 21 days. If payment is not made, the claimant can seek summary judgment to enforce the decision through the courts.

The decision cannot be appealed but it will not be final - it will stand unless or until a successful challenge is made in court or to an arbitral tribunal. An unsuccessful claimant would need to issue proceedings for professional negligence and a defendant would need to seek declaratory relief - a declaration from the court that the defendant is not liable or that the compensation ordered is excessive.

The decision can be final from the outset only if the parties agree that it should be.

See the Professional Negligence Bar Association: Professional Negligence Adjudication Pilot Pack for more information.

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