Goal is a better relationship between technology and law

A new method of adjudication aims to fast-track procedure for technology disputes, explains Rebecca Roberts

Technically complex, time-consuming and often expensive, technology disputes were ripe for a new form of alternative dispute resolution. this is what the Society for Computers and Law (SCL) has set to deliver by way of its new adjudication procedure which launched in October. The SCL is an educational charity aiming to promote best practice within the tech law space. although currently the SCL’S scheme is only available in England and Wales, it looks likely that the scheme will be rolled out to Scotland in the near future.

The new fast-track adjudication procedure offers contracting parties a lower cost avenue for resolving disputes, whereby an adjudicator with expert knowledge in the relevant field of technology will determine the dispute within three months. The condensed timetable will be particularly attractive to parties in the technology space, where contract disputes can severely disrupt time-sensitive projects and even jeopardize their achievement altogether.

The new scheme was partly influenced by the success of the statutory adjudication procedure introduced for construction disputes in 1996. In the early 1990s it was recognised that the mechanism for resolving construction disputes was in need of overhaul; expensive and long-running litigations were causing serious cash-flow problems for construction projects. A revolutionary report published by Sir Michael Latham in 1994 recommended a culture shift in the UK construction industry, pushing contractors and subcontractors to stop playing the ‘blame’ game and instead start working collaboratively for the benefit of the project. This was reflected in Sir Michael’s recommendation that adjudication should be the clear primary route for disputing parties, with recourse to litigation only available as a last resort. The statutory adjudication regime which followed gave parties a right to adjudicate which could not be contracted out of and dictated that the adjudicator’s decision must be made within 28 days from referral. The scheme also introduced a policy of “pay first, argue later”, where the unsuccessful party immediately pays any sums which the adjudicator de ems due, pending any appeal. This sought to ensure that construction projects were no longer stymied by a halt in funding while disputes were ongoing.

The SCL had similar ambitions when developing the fast-track procedurefor technology disputes and the parallels between this procedure and the statutory construction regime are clear: There is a fixed time period within which the adjudicator must reach its decisionand the adjudicator’ s decision is immediately enforceable, subject to a right to appeal within six months, allowing the successful party instant access to cash if the dispute related to payment. There is also a general obligation for parties to act in good faith.

However, unlike construction adjudication, the SCL’S procedure has no statutory footing. Parties are not mandated to use the scheme but can elect to do so either by specifying this in their contract or by referring themselves to the SCL once a dispute arises. The SCL has produced model clauses which parties can incorporate into their contracts to agree in advance that any dispute will be directed towards fast-track adjudication.

The adjudicators charged with deciding disputes brought under the new procedure will be selected from the SCL’S panel of preapproved adjudicators. These can be lawyers or non-lawyers, but will always be technology specialists with dispute resolution experience. And what about costs? It seems these will be significantly lower than those incurred in a protracted litigation. The fee to commence an adjudication is £500 and the adjudicators’ fees are generally capped at £450 per hour. It is anticipated that adjudicators will normally be able to reach a decision on the papers without the need for hearings, which could also cut costs for parties.

Although the scheme has now officially launched, the SCL is still finalising its panel, which is expected to be complete by the end of the year. The SCL expects to begin receiving referrals from January 2020.

Given that the SCL’S fast-track adjudication scheme is voluntary, its success will depend on how well the technology sector embraces the new procedure. The SCL will hope that the technology industry’s reputation as a community of innovators and ‘early adopters’ will help drive these changes forward, to the ultimate goal of achieving a more effective relationship between technology and the law.