21 June 2019

Bringing down the cost of low value dispute adjudication

Making adjudication more accessible so that low-value disputes can be resolved quickly and economically, the Technology and Construction Solicitors Association (TeCSA) have launched a fee-capped low value dispute (LVD) adjudication service.

The service, aimed at claims for the payment of up to £100,000 (excluding VAT and interest), will have capped adjudicators’ fees The maximum adjudicator’s fee will be £5,000 excluding VAT for claims between £75,001 and £100,000, with a sliding scale of fees for lower value claims.

The new service, which comes into effect from today (June 21), will be run by TeCSA on a pilot basis until November 2019 and will be available for claims for payment of a specified amount of up to £100,000. It will apply to disputes under construction contracts which fall under the Construction Act (primarily between businesses) or to disputes under contracts which contain adjudication rules under the Construction Act’s Adjudication Scheme (for example, under a JCT Minor Works Contract with a residential occupier) or similar rules.

TeCSA chairman Caroline Pope, a partner at Bryan Cave Leighton Paisner LLP, said: “As has often been said, cash flow is the life blood of the industry, and so we hope that this new LVD service will enable parties who have not been paid to have greater certainty as to the costs of adjudication.

“We also thought it was important that using the service is not dependent upon the agreement of the other party. We will run it on a trial basis and review its effectiveness and identify any teething problems at our Annual Adjudication Conference on 14 November 2019.”

Andrew James, Head of Construction and Engineering at Harrison Clark Rickerbys LLP, and a member of TeCSA’s Adjudication Sub-Committee, who helped to develop the pilot scheme, said: “There is considerable evidence that the costs of adjudication both in terms of adjudicators’ fees and legal and claims consultants’ costs, are proving a disincentive to parties to use adjudication for resolving low value disputes.

“We cannot control people’s legal costs, but we can help to make adjudication more attractive and improve access to justice by having a service where adjudicators’ fees are capped, depending upon the value of the claim.”

TeCSA already runs an adjudication service and has over 80 adjudicators on its panel. Adjudicators on the existing panel include not only solicitors but also quantity surveyors, engineers, architects and barristers.

Neal Morris, Head of Construction Advisory & Disputes at Pinsent Masons Solicitors and Chairperson of the Adjudication Sub-Committee of TeCSA, said: “We initially consulted with our existing panel of adjudicators at last year’s annual conference and have since got the agreement of the majority of our adjudicators to take part in this low value dispute service – we hope that it will prove successful and provide a valuable service to the construction industry.”

Further details of the service and guidance are provided on the TeCSA adjudication website at https://www.tecsa.org.uk/tecsa-adjudication-service. Any queries or comments, please contact Andrew James at Harrison Clark Rickerbys at ajames@hcrlaw.com.

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About the Author
Andrew James, Partner, Head of Construction & Engineering Team
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