Out-Law / Your Daily Need-To-Know

CIC creates new UK adjudication procedure for low-value construction claims

Out-Law News | 18 Feb 2020 | 10:55 am | 1 min. read

The UK's Construction Industry Council (CIC) has announced the upcoming publication of a new low value disputes model adjudication procedure (CIC LVD MAP).

The MAP is to be published in March in response to growing construction industry concerns about the increasing complexity and prohibitive costs of adjudication.

The CIC said it was aiming to provide a simple and cost-effective procedure to make adjudication more accessible for small and medium-sized enterprises and others involved in lower value claims. The procedure will be aimed at disputes where claims are for £50,000 or less, and the issues in dispute are relatively uncomplicated. It is also hoped that newly qualified adjudicators will be able to gain experience deciding low-value disputes.

The new MAP follows two industry consultations and consideration of the feedback received. The document will set out a streamlined adjudication procedure for low-value claims. The adjudicator’s fee will be linked to the amount claimed, which is intended to provide certainty on how much the adjudicator will be paid for making a decision.

The document will also include an outline timetable for the procedural stages, giving users a simple but flexible approach to the main stages of the process.

The CIC LVD MAP has been developed by a working group including representatives from a number of industry bodies. It is supported by 10 organisations which will maintain their own panel of qualified adjudicators who will apply the procedure fee and expenses scale as set out in the MAP. The 10 organisations include the CIC, the Centre for Effective Dispute Resolution and the Chartered Institute of Arbitrators among others.

The UK and other jurisdictions make the availability of adjudication mandatory for parties to a construction contract. The decision of an adjudication is final and binding, provided it is not challenged by subsequent arbitration or litigation. Statutory adjudication was first introduced in the UK in 1996.

Last June the Technology and Construction Solicitors Association (TeCSA) launched a pilot adjudication service for low-value disputes, where the amount claimed was under £100,000. The scheme became part of the association’s adjudication offering as of January 1 2020.

The TeCSA service caps adjudicators’ fees depending on the value of the claim up to a maximum of £5,000, and the association has created a separate panel of adjudicators for the low-value service.

Meanwhile the CIC also launched a model mediation agreement and procedure (MMAP) last year designed to help resolve disputes through mediation. The MMAP fixes the mediator’s fee at £6,000 if the dispute is valued at under £100,000.