Bargaining power

Few practitioners can be unaware of the potential benefits of active participation and possible sanctions for non-engagement in alternative dispute resolution (ADR), and the publication of the report of the Civil Justice Council's Online Dispute Resolution Advisory Group in relation to low-value claims evidences the continued interest in this field.

With spiralling litigation costs, increases in court fees, and constraints on costs recovery accentuated by the costs budgeting process, perhaps the time is right for a paradigm shift to more bespoke and varied forms of ADR, with the field of professional negligence leading the way.

Pilot scheme

In February, the Professional Negligence Bar Association (PNBA) launched its Professional Negligence Adjudication Pilot Scheme. Aimed at claims for professional negligence against solicitors of up to £100,000, the pilot is being monitored by the Ministry of Justice and Mr Justice Ramsey.

The form of the scheme will
be familiar to those aware of the statutory process applicable
to construction contracts.
In essence, it involves the appointment of an adjudicator with specialist knowledge in the relevant field to provide a merits-based decision at a relatively low and fixed cost, which is temporarily binding.

While parties have the right to seek a final determination from the courts, experience shows this to be unusual, with the adjudicator's decision being accepted and acted upon.

While there may be a
degree of trepidation among practitioners who have no experience of the adjudication process, they should find solace and encouragement in its success in complex and high-value construction disputes for many years.

However, the attraction
of adjudication as part of the dispute resolution process does not stop with construction and low-value solicitors' negligence claims. Claims involving professionals in other disciplines, such as surveyors, financial advisers, and accountants, could also benefit from a similar adjudication process.

Indeed, as we see professional indemnity insurance expanding into new, or less traditional, professions, such as wedding planners, photographers, and genealogical researchers, the attraction of a process with expertise in the field of dispute at the heart of its resolution is ever more appealing.

As well as expanding into new areas, practitioners should keep an open mind as to the form of adjudication that best suits the case in question. Why a single adjudicator? Joint adjudicators may be a more appropriate option, utilising an adjudicator with a legal background and one with experience of each relevant discipline, thus enabling the process to be moulded to cover multi-disciplinary disputes.

Options open

Flexibility need not end there.
A referral to adjudication could be preceded by a shorter period within which the adjudicator could take on the role of an evaluative mediator, assisting the parties in seeking a negotiated solution ahead of
a formal adjudication but, unlike a traditional mediator, proffering an opinion and assisting the parties by giving an evaluative view of their position. Few cases would not benefit from early independent evaluation before the parties' positions become entrenched.

It would be unwise to dismiss the potential benefits of other forms of ADR, such as expert determination or, particularly where there is a significant business relationship (for example, between a panel valuer and a lender), the creation of a dispute resolution board to resolve such matters. Flexibility of approach and a willingness to adapt ADR to the needs of any given case are essential.

As with all forms of ADR, a major issue will be how to ensure the active engagement of the parties and, equally importantly, their insurers. To date, compulsory ADR has been viewed as a step too far, but it is an issue that periodically makes its way back up the agenda.

Perhaps compulsion is required, or maybe we will see
a halfway house approach, for example, through added emphasis in the pre-action protocols. Whichever way you look at it, ADR is high on the agenda and will rarely not be in the parties' interests. Support
for new forms of ADR initiatives from professional regulators
can only help the cause.

The time is ripe for a
re-evaluation of ADR in the professional negligence arena. Considerations of reduced levels of costs, accurate reserving, and expeditious resolution, to name but three issues, should be incentive enough to drive both
a realistic and creative approach to early resolution of claims.

Parties should, from the pre-action protocol stage, engage in discussion not just as to the issue of ADR generally, but the form of ADR best suited to resolving the matter in hand. SJ

Robert Crossingham, pictured, is a professional risk partner and Stewart Simpson is a knowledge services manager at Weightmans

@Weightmans