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Professional negligence adjudication – the dream becomes reality?

The Adjudication Scheme for Professional Negligence Claims ("the Scheme") pilot has concluded and been added to the Pre-Action Protocol for Professional Negligence Disputes ("the Protocol"). Following on from his previous article "Quicker and cheaper dispute resolution – a dream come true?" and having acted for a claimant in the successful resolution of a professional negligence counterclaim under the Scheme, Malcolm Rogers considers this recent development.

Adjudication was originally launched for professional negligence claims in February 2015 but, following a woeful uptake, it was revamped and relaunched in May 2016 with the support of Mrs Justice Carr and Mr Justice Fraser.  This revised pilot scheme had slightly more success, with seven cases conducted through the pilot scheme over two years.   

Mrs Justice Carr and Mr Justice Fraser along with a working party have now reviewed the pilot Scheme and unanimously recommended that claimants issuing a letter of claim pursuant to the Protocol must indicate whether the dispute should be referred to adjudication. If a claimant does not wish to adjudicate they must provide reasons.  However, for the time-being, the Scheme remains voluntary.

It is particularly interesting to note that, of the seven cases conducted through the pilot, none of the cases continued in formal litigation.  This appears to mirror the experience in construction disputes where many adjudicated cases are not subsequently litigated - the parties being content to accept the reasoned decision of the adjudicator as conclusive.

The working party's recommendations have been adopted and, as of 3 May 2018, incorporated into the updated Protocol, which now states:

"The Letter of Claim … should include the following…

 (i) An indication of whether the claimant wishes to refer the dispute to adjudication. If they do, they should propose three adjudicators or seek a nomination from the nominating body. If they do not wish to refer the dispute to adjudication, they should give reasons."

The requirement for claimants to now state their (reasoned) position on adjudication in the letter of claim should have a number of effects:

1)      Adjudication is lifted from a small-scale pilot scheme to a mainstream form of alternative dispute resolution.

2)      Solicitors acting for claimants will need to consider adjudication in every professional negligence claim and advise their clients as appropriate in relation to timescales, merits and costs.

3)      Claimants will need to state in open correspondence whether they are prepared to agree adjudication and, if not without good reason, defendants may seize on this as an unreasonable refusal to consider alternative dispute resolution.

4)      Professional indemnity insurers and their legal advisers will need to take the possibility of adjudication into account when deciding on a disposal strategy and setting costs reserves.

These amendments to the Protocol may, in time, result in a change of mindset for all parties, that adjudication has the potential to save significant time and costs in resolving professional negligence claims.  That is certainly our experience and, whilst there will be cases that are not suitable, we consider adjudication will be a useful tool for defendants and their insurers in many cases in the future.

Contact

Malcolm Rogers, Senior Associate, Tel: 0113 204 1846 Malcolm.rogers@dwf.law

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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