The professional negligence adjudication scheme—an update

The professional negligence adjudication scheme—an update

According to Ivor Collett, barrister at Crown Office Chambers, the professional negligence adjudication scheme is a quick, informal and relatively inexpensive method of dispute resolution. Collett discusses how the scheme is being used and why he believes all professional negligence lawyers really should consider it.

When was the scheme first launched?

It was launched in February 2015, as a pilot scheme.

Who runs the scheme?

The scheme is now run by the Professional Negligence Bar Association (PNBA), a specialist bar association. I have been on the PNBA executive committee since 2007.

When it started as a pilot scheme, and up until late 2018, it was run under the auspices of a working group chaired by two High Court judges—Carr J (formerly a professional negligence silk) and Fraser J (formerly a construction silk). The working group had been put together at the behest of the Master of the Rolls and Ministry of Justice, who were behind the drive to get this scheme off the ground at its earliest stages. This was after the scheme had been proposed by a specialist solicitors’ association representing primarily claimants’ solicitors, the Professional Negligence Lawyers’ Association (PNLA)—under the leadership of Katy Manley.

Once the Master of the Rolls deemed that the pilot had been successful in 2018, the judges agreed that the PNBA should take over the running of the scheme and we have done so with a re-launch in early 2019 and some slight modifications to the rules and guidance, and we have run accreditation training for those who wish to serve as adjudicators. William Flenley QC and Simon Wilton of Hailsham Chambers have been at the forefront of this work.

The PNBA had originally been identified as the ‘appointing body’ under the scheme, ie the chair of the PNBA would appoint an adjudicator from among its ranks once parties agreed to use the scheme. There is no other recognised provider yet.

Which types of claim is the scheme aimed at?

As a pilot it was initially aimed at claims against solicitors’ firms valued up to £100,000. But it is now open to claims against all non-clinical professionals, and there is no cap on the value of the claim.

The scheme was envisaged to be used at the pre-action stage, but it can be used at any stage. Indeed, the very first one through the doors in 2015 was already in litigation, and pleadings drafted by experienced counsel had been exchanged. Several more have been claims that are in litigation and they then get stayed by consent to allow adjudication to take place.

Is it mandatory for those claims?

No. This is absolutely crucial to understanding the scheme. In contrast to the statutory adjudication scheme for construction disputes (in place since 1998), no party can drag their opponent to an adjudication without agreement between them to utilise the scheme. If one party doesn’t want to go down that route, it cannot happen.

Why use the scheme?

It’s a quick, informal and relatively inexpensive method of dispute resolution, getting a high-quality determination of the dispute by a specialist within 56 days from referral.

It was initially brought in to assist in modestly valued claims where there was a risk of claims getting bogged down in a war of attrition and a disproportionate escalation of costs. This was a particularly sore point for claimants’ representatives acting under conditional fee agreements after the Jackson reforms of 2013 abolished recoverable uplifts (success fees) and recoverable after the event (ATE) premiums for claimants.

Those concerns may still be there, but a bigger picture has developed. This scheme is excellent for cases where one or maybe two issues have become an obstacle that the parties can’t get past. Each side may think they have a strong case, eg on whether a duty was owed to deal with a particular matter, or on breach of duty, or on limitation, or on causation of loss – even though everything else might be agreed or capable of resolution. We have all been to settlement meetings like that!

So, especially in those cases, this scheme can be very useful to both sides as it allows an independent specialist (the adjudicator) to come in and give an impartial answer to the disputed issue(s). It does not need to be the whole dispute that is referred for adjudication: it can be just a distinct issue or issues. But if the parties wish, all issues in dispute could be referred – it’s entirely up to them.

I should add that the parties can decide (at the outset) whether the outcome should be confidential or not. So, if privacy is important, then this scheme can help.

The other important aspect to note is that the parties agree—again, at the outset—whether to opt for a binding decision or one that is merely ‘temporarily binding’ (as in the statutory construction adjudication scheme). If the latter, then the losing party can litigate or arbitrate the matter to a conventional conclusion. But in fact, I think all of the referrals to date have involved the parties opting for binding determinations.

Who is using the scheme?

I think it has so far mainly been used for claims against solicitors’ firms, as originally conceived. But I have certainly determined claims against other professionals, such as accountants.

The adjudications to date seem mostly to have been against small to medium sized firms, but not entirely—I have determined one brought against a top-20 law firm. The claimants tend to be individuals, but, again, some businesses are bringing these disputes to us. One of the biggest champions of the scheme is a nationally recognised partner at a major global law firm acting for UK and international financial institutions regularly bringing claims against professionals.

The scheme really should be considered by all professional negligence lawyers, not least since there is a new requirement (as of 2018) in the pre-action protocol for claimants to state if they have considered using the scheme. The Rules Committee for the Civil Procedure Rules clearly thought it important enough to insert that requirement. Ironically, it would probably amount to professional negligence now not to consider and advise the client on each side on the merits of proposing use of this scheme.

Where can we obtain further details of/documents for use in the scheme?

The PNBA is the place to go.

The PNBA website has a section you can go to with all the information, rules, guidance, etc you could wish, including the list of accredited adjudicators.

Ivor Collett’s practice covers commercial, professional liability and insurance disputes, with a particular focus on construction professionals and lawyers. He is heavily involved in cases of impostor fraud and appeared successfully in the identity fraud conjoined appeals of P&P Property Ltd v Owen White & Caitlin LLP and another; Dreamvar (UK) Ltd v Mischon de Reya and others [2018] EWCA Civ 1082[2018] All ER (D) 124 (May). His insurance work involves policy wording and coverage issues of notification, non-disclosure, aggregation and third parties’ rights. He is a TECBAR-accredited construction adjudicator. Ivor Collett was involved in the development of the professional negligence adjudication scheme and is closely involved in its operation and training new adjudicators. Over the last four years he has been the most frequently appointed adjudicator under the scheme. He has just been nominated for the Chambers Bar Awards 2019 for Professional Negligence Junior of the Year.

Interviewed by Kate Beaumont.

This news was first published on Lexis®PSL Dispute Resolution on 23 September 2019.  For a free trial, click here.


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