New arbitration procedure for lower value construction disputes

The purpose of adjudication in building disputes has always been to achieve a fair, quick and cheap alternative to litigation.

The Housing Grants Construction and Regeneration Act 1996 created a procedure in which parties to a construction contract could refer a dispute to an independent adjudicator who would make a decision within 28 days.

Unfortunately, many small businesses were deterred from adjudication due to claim values being low and the cost of adjudication being seen as a barrier, because they were relatively high.

In light of this, the Construction Industry Council (CIC) has developed the Low Value Disputes Model Adjudication Procedure (LVD MAP). The purpose of this LVD MAP is to allow disputes worth £50,000 or less to be dealt with a streamlined procedure that avoids unnecessary costs.

The referring party has to make an application to the Adjudicator Nominating Body (ANB) for the dispute to be dealt with under the LVD MAP. The ANB will then nominate an adjudicator who will act if they believe the dispute is suitable for the procedure and the respondent has no reasonable objections.

How long do building adjudications take?

The adjudication with take a month for building disputes and the timetable under the new system will be as follows:-

• Referral being received by the adjudicator on Day 1.
• Responding Party will respond to the Referral no later than Day 14.
• Referring Party may make any Reply to the Response in writing no later than Day 21.
• The parties will receive the Adjudicator’s Decision no later than Day 28.

The adjudicator will have the power to request that the parties provide documents that the adjudicator requires to decide the dispute. The parties must comply with any request or direction of the adjudicator and failing to do so may result in the adjudicator continuing in the absence of that party. This avoids the parties overloading the adjudicator with unnecessary documents that rack up costs.

The adjudicator’s fee will be fixed and will depend on the value of the dispute.

Hopefully, the LVD MAP will persuade more parties involved in small construction disputes to consider arbitration before becoming involved in a lengthy litigation.

At Samuels Solicitors LLP, based in Devon, we have a great deal of experience in dealing with many different types of disputes about property, including construction disputes. Have you got a problem with a cowboy builder that is giving you a headache?

Contact us today to find out how we can help you with any of the issues which may be affecting your property.