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Legal changes

The Professional Negligence Bar Association launches its new adjudication scheme

It is proposed that the scheme will enable professional negligence disputes to be resolved cost-effectively.

May 2018 brought changes to the Professional Negligence Pre-Action Protocol (“the Protocol”) which introduced a requirement on parties to consider whether their dispute was suitable for determination by adjudication. Following these changes, and in order to accommodate this new requirement, the Professional Negligence Bar Association (“the Association”) has launched a voluntary adjudication scheme (“the scheme”) for professional negligence disputes.

The scheme’s main purpose is to assist parties in complying with the Protocol and to encourage parties to engage in Alternative Dispute Resolution (“ADR”). Parties to potential litigation should be mindful of the potential for the court to impose adverse costs consequences on a party failing to engage in ADR under the Protocol. The scheme therefore seeks to provide a further purportedly cost-effective option for the parties to utilise in order to comply with the Protocol and consider litigation only as a last resort.

It is proposed that the scheme will enable professional negligence disputes to be resolved cost-effectively and within 56 days, with the award and costs to be paid within 21 days of the determination. The parties can either nominate their own expert, independent adjudicator or may ask the Association to nominate an adjudicator from its panel.

The scheme is intended to apply to professional negligence disputes involving all types of professionals and is particularly suitable for disputes where the facts are reasonably clear from the documents available. It is specifically appropriate for those matters where the issue of whether a breach of duty has occurred, or whether recoverable loss has been caused, can be ascertained with little or no expert assistance.

It follows that the scheme is unlikely to be suitable for construction disputes, disputes which require extensive cross-examination of witnesses or those which require complex expert evidence.

Parties who consider engaging in the scheme should be aware that, unless the parties opt for finality, the adjudicator's decision will only be binding unless and until a court or arbitral tribunal gives a different ruling on the dispute. There is a risk, therefore, that if litigation or arbitration is pursued subsequently to a determination, the parties’ costs will likely be more than if the scheme had not been used in the first place.

The Association has now released the scheme’s rules, guidance notes and other useful documents for parties to consider prior to engaging in the scheme. These can be found on the Association’s website.

For any further information regarding the scheme or in respect of professional negligence disputes generally, please contact David McGuire or Robert Jones on the contact details below.

For further guidance or information on any of the issues outlined in this article, contact our professional negligence solicitors.