Adjudications for Professional Negligence pilot scheme launched
A new pilot scheme for adjudication in solicitors' professional negligence claims was launched on 1 February 2015 following a consultation process which has included the Ministry of Justice, the Association of British Insurers, the Professional Negligence Lawyers Association and the Professional Negligence Bar Association.
Adjudication is an alternative form of dispute resolution that was developed to allow for construction contract disputes to be resolved on an interim basis more quickly and cost effectively than resolution through arbitration or litigation. An adjudicator's decision is binding unless or until the dispute is finally determined by court proceedings, arbitration or by agreement of the parties via negotiation or mediation. Some practitioners consider that adjudication is particularly appropriate in resolving disputes in professional negligence cases where, without some independent decision on the merits, the parties may not be able to reach a resolution.
It is generally intended that the scheme will apply in relation to legal proceedings threatened or brought in England and Wales by any person against a solicitor who, it is alleged, acted in breach of the duties owed by him to the claimant and where the claimant seeks damages or compensation with a financial value of less than £100,000 (exclusive of costs). Once the parties have agreed to adjudicate the dispute they will also need to decide whether the adjudicator will have any power to award any party any part of its costs (to a maximum of £5,000).
The aim is for the professional negligence pilot scheme to initially run until three test cases have been adjudicated. The Professional Negligence Bar Association have appointed a panel of 5 adjudicators for the pilot all of whom have many years of experience in these types of claims.
Once the adjudication process for the three test cases is complete the relevant feedback will be analysed. Then, a consultation will take place to decide to what extent adjudication of professional negligence claims will proceed.
It remains to be seen whether this new scheme will prove successful and extend beyond the pilot stage. However, bearing in mind the government's announcement on 16 January 2015 that court issue fees will be rising (as discussed here), it may well be the case that alternative forms of settling disputes will become increasingly common as it becomes progressively disproportionate for claimants to seek redress in court.
The professional negligence team at Blake Morgan will be keeping a keen eye on this scheme and its success. We already have experience of the benefits of settling disputes without the court's intervention and have negotiated countless settlements for claimants by way of other alternative dispute resolution mechanisms such as mediation.
It could well prove the case that adjudication becomes another useful tool that can be used in resolving negligence disputes against professionals in a cost effective and efficient manner.