The Construction Industry Council (CIC) is the representative forum for professional bodies, research organisations and specialist professional services providers in the construction industry, first established in 1998. It has now over half a million members across more than 25,000 construction companies.
The Low Value Disputes (“LVD”) Model Adjudication Procedure (referred to as “the MAP”) First Edition was published on 1st May 2020 for use in disputes where the total amount claimed is £50,000 or less excluding VAT. It is intended to bring cost certainty to lower value disputes and does so by setting out capped fees for the adjudicator (excluding VAT) in Schedule 1 of the MAP, as follows:
|Claim value||Adjudicator’s fee|
|Up to £10,000||£2,000|
|£10,001 to £25,000||£3,500|
|£25,001 to £50,000||£6,000|
|Over £50,000||Negotiable by agreement with parties|
The LVD MAP operates by agreement between the parties to a dispute, either at inception of the contracts or at any time on an ad-hoc basis when a dispute arises.
The CIC Panel Adjudicators are held on a “Register” as members of CIC member organisations and Fellows of the Chartered Institute of Arbitrators, with a minimum of 10 years’ post qualification experience in their primary construction profession and who have attained a relevant Construction Adjudication qualification.
The administration fee for the nomination of an adjudicator is £300 (inclusive of VAT).
The CIC will nominate an adjudicator within 5 days of request.
CIC continues to accept applications from adjudicators who:
There are 10 participating ANBs who will maintain a panel of qualified adjudicators who agree to fully comply with the terms of the CIC LVD MAP. To use the CIC LVD MAP the Referring Party shall request the Construction Industry Council, or another participating ANB to nominate an adjudicator and they will do that within 5 days of receipt of the request. The request shall be in writing, accompanied by a copy of the Notice of Adjudication and the appropriate fee. All participating ANBs have agreed to charge £250 (plus VAT) for the adjudicator nominating service.
The Map confirms that the prescribed timetable is 28 days, as with standard adjudication process. By including an outline timetable for the procedural stages, it provides a flexible yet simple to understand approach to the key elements of the adjudication process.
There is evidence that parties to disputes have been deterred from using adjudication because of the ever-increasing costs involved.
To address this problem, the CIC sets out a streamlined adjudication procedure for LVDs and, by linking the adjudicator’s fee to the amount claimed, provides certainty as to how much the adjudicator will be paid for making a Decision.
The parties may still choose to be assisted by professional representatives at any stage of the adjudication.
In contrast to some forms of adjudication, the adjudicator is appointed to decide the dispute or disputes. This would assist in multiple smaller claims which may prove particularly useful for sub-contractors.
The adjudicator may decide the dispute is unsuitable under the MAP where the documents included in the Referral, the Response, or the Reply to the Response exceed more than one A4 Lever Arch File per submission. This is positive considering some of the files we have seen and compiled!
If any challenges are made to the adjudicator’s jurisdiction, the adjudicator must decide on this within two hours of the adjudicator’s time. This aims to keep jurisdictional challenges (which can run into days) to a minimum.
The MAP is for use where the law of the contract is that of England and Wales. For Scotland, there are three amendments to bring the terminology into line. There is, however, no mention of Ireland, North or South of the border.
The MAP provides a non-exhaustive list of factors under which the adjudicator may consider a dispute to be unsuitable for adjudication. This includes:
It is stated in the MAP that the Adjudicator:
Being a little vague, this does little to enhance the reputation of some rogue adjudication decisions we have seen!
Due to the overall process being for lower value disputes, those I think will benefit most would be parties at the lower end of “the food chain”, i.e. primarily sub-contractors. Consequently, as sub-contractors will have easier access to adjudication, it may mean a better cash-flow to the lower tiers, something I see as a continuous grievance when giving contract training to subbies.
So, having looked at the intention, appointment system and envisioned usage of the MAP, we simply have to wait and see the fruits of the CIC’s labour. My thoughts? It seems another move in the right direction, towards Michael Latham’s intentions spawning from his “constructing the Team” report and should have positive influences on cash flow and abuse of the system by the paying party. I, for one, welcome it.
The CIC Map can be found at the below link http://cic.org.uk/admin/resources/cic-low-value-disputes-model-adjudication-procedure-first-edition.pdf
To request for the appointment of an adjudicator under the new CIC LVD adjudication scheme Please follow this link: http://cic.org.uk/services/cic-low-value-disputes-adjudication.php.
Published 7th May 2020
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Published 20th March 2020