People making professional negligence claims must consider adjudication or face the risk of paying higher costs in court. An amendment to the Pre-Action Protocol for Professional Negligence says that claimants should indicate whether they want to refer the complaint to adjudication in their letter of claim. Those that choose not to will need to give reasons.
The protocol sets out the steps parties should take to settle a dispute. An updated version, published by the Ministry of Justice on 30 April 2018, sets out for the first time that parties should consider adjudication before taking court action.
Case law has consistently shown that the courts impose costs penalties on parties who do not try to resolve their dispute before turning to the courts – even if they go on to win their case.
Adjudication is one method of alternative dispute resolution (ADR). Others include informal settlement negotiations, arbitration, formal mediation, expert determination and more.
Adjudication is voluntary and both parties must agree to have their claim dealt with by the process. An expert adjudicator is appointed who considers evidence and written submissions from both parties before reaching a decision and potentially making a financial award to the successful party. The outcome is legally binding unless subsequently altered by the courts.
“Taking a professional negligence claim to trial is an expensive and time-consuming business. It can take principals’ eyes off running their firms, leading to longer-term business performance issues,” said James Burgoyne, Director – Claims & Technical, Brunel Professions. “Using methods of ADR, such as adjudication, can lead to cheaper, confidential and less disruptive outcomes. ADR should be seriously considered by all parties to a dispute.”
Details of the changes have been published in the Ministry of Justice’s website, along with the amended pre-action protocol. Reports on the amendments have been published by the London Market Association and Walker Morris.
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