Professional negligence update

11 September, 2018

The pre-action rules governing professional negligence disputes have changed

On 1 May 2018, the law relating to negligence claims against non-medical and non-construction professionals underwent a sea change.  This change has resulted in parties to professional negligence actions having access to a different dispute resolution method – adjudication – in addition to conventional litigation and arbitration.

What is adjudication, and what are the advantages?

Adjudication is a streamlined form of dispute resolution often associated with construction disputes (eg between owners of property and contractors engaged to perform building works).  Adjudication in the context of professional negligence is a similar process which shares many key characteristics and advantages with construction adjudications.  For example, relative to conventional litigation, adjudication has the following advantages:

  • Rather than the matter being decided by a judge in court, adjudication awards are often made by an industry or technical expert who decides the matter.  This streamlines the matter and reduces the often significant costs associated with instructing experts to advise the court;
  • The parties’ lawyers and the adjudicator are all under very tight and strictly defined time deadlines which are much shorter than analogous court procedures.  This results in a swifter procedure for resolution of disputes by comparison to traditional court based litigation; and
  • Adjudication proceedings and awards can be kept confidential, and made final and binding on the parties if so agreed.  Indeed, claims can be kept entirely out of court in this way.

These advantages could make adjudication of professional negligence matters a very favourable option for claimants and defendants alike.

How can a professional negligence dispute be referred to adjudication instead of court?

Following the change on 1 May this year, the pre-action protocol now requires claimants to indicate at the outset whether or not they wish to refer the dispute to adjudication.  If they do, claimants are required to propose three prospective adjudicators to decide the claim, or seek nomination of an adjudicator from the Professional Negligence Bar Association (PNBA).  In this way, by agreement of the parties, professional negligence matters can be referred for adjudication.

This pre-action procedure favours agreement of the parties to adjudicate rather than take the matter to court because, where adjudication is opposed (eg by the claimant at the outset), the claimant must given reasons.  Should the matter end up in court, the judge then has discretion to make an adverse costs award against the party refusing to adjudicate.

The outlook for adjudication of professional negligence matters

Clearly the future of adjudication in the professional negligence context remains to be seen.  However, by comparison, since its inception in 1996 adjudication in the construction context has emerged as key amongst the fora available for resolution of construction disputes.  Since the advantages of adjudication apply equally to professional negligence as they do in the construction context, it appears likely that adjudication of professional negligence claims will see a similar rise to prominence as adjudication has for construction disputes.