How is the Industry Supporting Low Value Adjudication Disputes?

Since the introduction of Adjudication in 1998, there has been discussion as to whether Adjudication is a cost-effective method for small value disputes.

Whilst Adjudication is sold as the cost effective, fast alternative to court proceedings, in reality, the price of the Adjudicator has increased in recent years and as we are aware, it is not always guaranteed that the losing party will be the one responsible for paying the Adjudicator’s costs.

Whilst the consultancy and legal costs of the parties cannot be controlled by statute, a number of construction bodies are trying to make Adjudication more attractive by trialling new, low value dispute services.

The Technology and Construction Solicitors’ Association (“TeCSA”)

TeCSA has been involved in construction Adjudication since 1996 and has been an active force in the lobbying of government on primary and secondary legislation relating to statutory Adjudication.

In March 2018, TeCSA devised its own Adjudication rules, which, if explicitly incorporated into the contract, can be used in place of those set out in The Scheme for Construction Contracts (England and Wales) Regulations 1998.

In June 2019, TeCSA rolled out its own Adjudication service, primarily for low value disputes. This was run on a pilot basis until November 2019. Following a similar procedure to an ordinary Adjudication, the Referring Party simply applies by filling out a specified nomination form and paying the fee of £350 (note – slightly lower than the equivalent RICS fee of £425).

The main reason behind the service is to give parties certainty as to costs with the Adjudicator’s costs capped as follows:

Adjudication Costs

Construction Industry Council (“CIC”)

Construction Industry Council

Like TeCSA, the CIC is in the process of developing its Low Value Disputes Model Adjudication Procedure (“CIC LVD MAP”). The consultation is now on its second draft, drawing input from key industry bodies such as the Adjudication Society, CEDR, ICE and the RICS.

Martin Burns, RICS Head of ADR Research and Development and Chair of the CIC LVD MAP Working Group, summaries the need for services such as this by stating:

“The reality is that many smaller businesses are disillusioned with adjudication because it has developed into a process often inordinately complicated and too expensive for dealing with disputes where the sums claimed are £50,000 or less. The aim of the CIC LVD MAP is to provide SME’s who might not otherwise use adjudication, with a simple, Construction Act compliant, timetable and procedure for the low value disputes. The CIC LVD MAP will be relatively low cost to use and parties will know from the outset what the adjudicator’s fees will be”.

Although the CIC also have a cap on the Adjudicator’s costs, the fees are slightly higher than those of TeCSA:

CIC Adjudicator Fees

If anything can be taken away from these low value adjudication services, it must be that the industry is listening to feedback from construction companies and practitioners and addressing concerns which have been raised.

How can we help with your Adjudication?

Our DRS Team have a combined total of over 25 years of experience of construction claims and Adjudications and aim to consult and assist our clients at any stage of a claim or dispute. Click here to get in touch with our Dispute Resolution Team.