On 21 June 2019, the Technology and Construction Solicitors' Association (TeCSA) launched the low value disputes (“LVD”) adjudication service pilot scheme. Eligible disputes (claims for fixed amounts of up to £100,000 (excluding VAT and interest)) may be referred to adjudication under this scheme, which caps the adjudicator’s fees.
Provided that the dispute is for a specified amount, there is no restriction on the types of claims that can be made through the scheme, meaning that eligible disputes include claims for interim or final payments, loss and expense, damages or variations.
The adjudicators’ fee caps under the scheme are as follows:
- for a claim valued at up to £10,000 plus VAT, the adjudicator's fees are capped at £2,000 (excluding VAT and interest);
- for a claim valued between £10,001 and £25,000 plus VAT, the adjudicator's fees are capped at £2,500;
- for a claim valued between £25,001 and £50,000 plus VAT, the adjudicator's fees are capped at £3,500;
- for a claim valued between £50,001 and £75,000 plus VAT, the adjudicator's fees are capped at £4,500; and
- for a claim valued between £75,001 and £100,000 plus VAT, the adjudicator's fees are capped at £5,000.
TeCSA said that it launched the LVD service because there was considerable evidence that the costs of adjudication put parties off using it to resolve low value disputes. It aimed to make adjudication more accessible by limiting the fees and expenses that an adjudicator can charge. Provided that a party is entitled under the contract to apply to TeCSA as an adjudicator nominating body (ie TeCSA is either a named nominating body or no nominating body is named in the contract), it enables the referring party to ensure that the adjudicator’s fees are capped by the scheme.
TeCSA has said that whilst adjudicators will issue decisions with reasons in accordance with existing TeCSA guidelines, users can expect adjudicators to be quite robust in limiting the number and length of submissions made.
The pilot of the LVD service was successful and the service is now part of TeCSA’s offering for adjudication. Further information about the service, including the process for applying to nominate an adjudicator through the scheme, can be found at TeCSA’s website [https://www.tecsa.org.uk/dispute-resolution/adjudication/]
