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
The Ł100,000 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
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
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
The decision can be final from the outset only if the parties
agree that it should be.
The UK Supreme Court last week issued the latest decision in a long-running attempt to enforce a US$150 million Nigerian arbitration award (IPCO (Nigeria) Limited v. Nigerian National Petroleum Corporation...
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