For some time the industry has been concerned about the level of fees on low value disputes. To address this, TeCSA has recently launched a pilot of its Low Value Disputes (LVD) Adjudication Service. This is for simple claims between two parties, for quantified amounts, where the total (VAT and interest exclusive) value of the claim is £100,000 or less.
One advantage for parties is that under the LVD Adjudication Service, the adjudicator’s fees are capped, depending upon the value of the claim, as set out below.
Claim Value Fee Cap (exclusive of VAT)
Up to £10,000 £2,000
£10,001 to £25,000 £2,500
£25,001 to £50,000 £3,500
£50,001 to £75,000 £4,500
£75,001 to £100,000 £5,000
The fees are exclusive of VAT, but inclusive of expenses and disbursements.
Who can use it?
The LVD Adjudication Service applies to contracts where the TeCSA adjudication rules apply, the Scheme applies, or where other adjudication rules apply, provided that it must be an adjudication under the Construction Act or under a contractual procedure which is similar to it.
To stop ‘game playing’, if following nomination, the adjudicator decides that the referring party has deliberately undervalued its claim, then the adjudicator shall be entitled either to resign or to continue with the adjudication on the basis that the caps on fees above shall not apply for all time spent on the matter.
It is good to see that the industry is listening to feedback from practitioners and addressing concerns raised. The TeCSA LVD service will help those with low value disputes to resolve their claims cost- effectively.
To find out more about TeCSA’s LVD service, click here: