An alternative dispute resolution method for professional negligence matters, first offered in early 2015, has just been relaunched. In February 2015 an adjudication pilot scheme was introduced as an alternative to court for professional negligence disputes.
It was designed to enable parties to access quick resolution by early adjudication, whilst keeping costs to a minimum. However, few litigants chose to participate in the initial scheme. In May 2016, the scheme was refreshed by Mrs Justice Carr and Mr Justice Fraser with changes that refine it and arguably make it more accessible to a wider range of parties to negligence disputes.
The scheme is available for any party to a professional negligence dispute and at any stage of the dispute. The guidance only discourages claims which genuinely require complex expert or witness evidence or where the Adjudicator has any other reason to believe that the scheme may not be suitable, for example where dishonesty has been alleged.
The scheme is entirely voluntary and both parties must agree to participate. Generally speaking, it would advisable to employ the scheme as early as possible to avoid legal costs accruing.
The adjudicator is selected by the Chairman of the Professional Negligence Bar Association from a panel of barristers specialising in professional negligence disputes. Their role as adjudicator is to decide on the facts impartially and they are obliged to comply with the principles of procedural fairness.
One key aspect of the scheme is that it is relatively fast compared with other forms of dispute resolution. Once the parties have both agreed to the scheme, the referring party must send a Notice of Referral to the other party which sets out the terms of the dispute. Once the Notice has been received by the Chairman of the Professional Negligence Bar Association, an adjudicator must be nominated within 5 working days. Alternatively, if the parties have already agreed who the adjudicator will be, the Professional Negligence Bar Association must write to the parties to confirm the nomination within 5 working days.
The adjudicator then has 5 working days to write to the parties, setting out their terms of appointment. Once the adjudicator has received signed copies from each party, they will write to all parties confirming that they have been appointed and the directions set.
The adjudicator is required to provide their full reasoned decision in writing within 56 days of appointment. This can be extended, but only if both parties agree. The adjudicator is able to decide on the dispute in the parties’ absence, although they are entitled to request a short hearing or telephone conference.
Whilst parties to a dispute can continue the litigation, in the majority of cases parties accept the decision of the adjudicator. This makes for a much quicker, less expensive form of dispute resolution.
The key amendments to the scheme include the following:
- Whereas the initial scheme just applied to solicitor professional negligence claims, it now applies to claims against a wider range of professionals (e.g. accountants, architects, financial advisers);
- There is no cap on the maximum value of the claim; the £100,000 cap previously applied in the February 2015 scheme has been removed; and
- Guidance notes distinguish between categories of dispute, which means that the decision cost will be proportionate to the value of the claim.
There is also a 10 page section of detailed guidance notes, which makes the scheme much more comprehensive and accessible than it was previously.
The amendments to the scheme make it arguably a much more accessible and appealing form of resolution for and parties to professional negligence disputes. The relatively short timelines outlined in the guidance would indicate that resolution can be achieved much faster and therefore much more cheaply, as costs will be prevented from increasing in the course of litigation. As the scheme will be available to a much wider range of professional negligence disputes, it is likely that the revised scheme will receive greater uptake. The success of the scheme remains to be seen, but this is certainly a promising development for parties who seek a quicker, lower cost resolution to their claim.