RICS is set to provide a low value construction adjudication service to give UK SMEs a simple and cost-effective procedure that will make solving disputes more accessible and quicker for lower value claims. This is something that is badly needed in these challenging times to free up SME cash flow.
This may be particularly interesting for construction companies operating in Scotland, given that the Scottish courts are experiencing unprecedented delays and disruption, as a result of the coronavirus (COVID-19) outbreak. In the light of the impact of the coronavirus (COVID-19) on the industry, there is a renewed call for an easy to use method.
The RICS service will operate in accordance with the ground-breaking Construction Industry Council CIC Low Value Disputes Model Adjudication Procedure (LVD MAP) procedure.
The service is aimed at disputes where the amounts claimed are for £50,000 or less, and the issues in dispute are relatively uncomplicated. RICS have set up a high-quality panel of RICS adjudicators who have been trained to deliver the service.
The objective is to develop a streamlined adjudication procedure that applies to disputes below £50,000 that do not involve multiple or complex issues. These Low Cost Adjudication Rules will bring the cost of adjudicating disputes below £50,000 down to around £6,000.
Details of the CIC LVD MAP are expected to be formally launched on 23 June 2020.
Fees
The Parties shall bear their own costs and expenses incurred in the adjudication. If the Adjudicator makes no direction on allocation of his or her fees, the Parties shall pay them in equal shares.
The Adjudicator’s fees exclusive of VAT will be fixed as set out below.
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
Where the Adjudicator meets with the Parties, in addition to the fee above, the Adjudicator will be paid £1,000 plus reasonable travel expenses. Where the Adjudicator visits the site, in addition to the fee above, the Adjudicator will be paid £1,000 plus reasonable travel expenses.
Where the Parties have a dispute where the claim exceeds £50,000, they may nonetheless choose to follow the LVD MAP procedure. In such circumstance the prospective Adjudicator shall write to the Parties setting out the basis of their proposed fees and expenses.
For more information contact our Construction Litigation team:
https://www.lemac.co.uk/practice-areas/12-chairman-partners-and-consultants/28-richard-barrie
https://www.lemac.co.uk/practice-areas/8-associates-solicitors-and-legal-team/69-christopher-reid
https://www.lemac.co.uk/practice-areas/8-associates-solicitors-and-legal-team/77-lindsay-burns
