Different Court Process On The Way?

The Ministry of Justice has backed a pilot scheme to achieve a quick decision, but one that can subsequently be reversed by the Courts if either party is unhappy with the outcome. The scheme, at the moment applicable to professional negligence cases valued at under £100,000, is based on the concept of ‘adjudication’ which has been with us as far as claims in the construction industry are concerned since 1996.

The way adjudication works in the construction industry is that when a claim is commenced and an adjudicator is appointed, he then has 28 days to manage the process and reach his decision. This time limit can be extended, but only up to a maximum 56 days. Once the adjudicator has reached a decision it is enforceable and has to be implemented immediately, but it can subsequently be reversed by the Court.

Experience in construction disputes shows that most parties to adjudication live with the decision, and very few are challenged. One other feature of adjudications is that the adjudicator has limited power to award legal costs, unless the parties agree otherwise, normally resulting in each side paying their own lawyer win or lose. However the parties do have to pay the adjudicator, and this can be much more than the court fees of bringing a claim.

The scheme that is being piloted borrows very heavily from the rules applicable to construction adjudication. The timescale for the decision is very limited, and the decision is enforceable once it has been made, but can be reversed by the Courts. There are some options in the draft rules. For instance it is optional whether the adjudicator has power to award legal costs or not. However the way that these rules are drafted suggests that legal fees will be capped at £5,000. At the moment there is a list of barristers in private practice to choose from, not any officially appointed Judges.

The Courts have been very keen in recent years to speed up the delivery of justice, and reduce the cost, even if that sometimes means compromising quality. They have actively promoted ‘Alternative Dispute Resolution’ (ADR) the ‘alternative’ being the alternative to going to Court. This development suggests that, in time, for smaller claims the Court may require the parties to participate in adjudication as a pre condition to using the Courts. It may be that once a decision has been reached by the adjudicator the losing party might take a step back and question whether it is worth going through another, potentially more expensive, process to get a different decision. As things stand there is nothing to stop parties agreeing to refer disputes to adjudication, or any other form of ADR if that is what they agree to do.

For further information please contact Robin Stephens on 0800 037 4628 or use the contact form here.


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