By Rebecca Roberts

TECHNICALLY complex, time-consuming and often expensive, technology disputes are in desperate need of an overhaul. This is what educational charity, Society for Computers and Law (SCL), has set to deliver by way of its new adjudication procedure, which launched in October. Currently only available in England and Wales, it’s likely the scheme will be rolled out in Scotland.

The new fast-track adjudication procedure offers tech companies a more affordable way to resolve disputes by using an adjudicator with expert tech knowledge to determine the dispute within three months. This should be particularly attractive to technology businesses, where contract disputes can severely disrupt time-sensitive projects or result in them falling apart altogether.

The new scheme was partly influenced by the success of the statutory adjudication procedure introduced for UK construction disputes in the 90s. This overhauled expensive and long-running litigations which were causing serious cash-flow problems for construction projects.

The construction adjudication regime followed a revolutionary report published by Sir Michael Latham in 1994, which recommended a major culture shift in the UK construction industry. Sir Michael urged contractors and subcontractors to stop playing the ‘blame’ game and instead start working collaboratively for the benefit of the project. He recommended that adjudication should be the primary route for resolving disputes, 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 deems due, pending any appeal. This sought to ensure that construction projects were no longer stymied by a halt in funding and progress as a result of disputes.

The SCL had similar ambitions when developing the fast-track procedure for technology disputes and the parallels between this procedure and the construction regime are clear. There is a fixed period within which the adjudicator must reach its decision (albeit this is longer than the 28 days for construction disputes) and the adjudicator’s decision is immediately enforceable, subject a right to appeal within six months, allowing the successful business instant access to cash in cases of payment disputes. There is also a general obligation on the parties to act in “good faith”, echoing the collaborative approach lauded by Sir Michael.

However, unlike construction adjudication, the SCL’s procedure has no statutory footing. Tech businesses can elect to use the process either by specifying this in their contract or by referring themselves to the SCL once a dispute arises.

And what about costs? They will likely be significantly lower than for litigation, as a result of a cap on adjudicators’ fees and in the anticipation that adjudicators will normally be able to reach a decision without the need for hearings. The condensed procedure should reduce parties’ legal bills too.

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.

Rebecca Roberts is a solicitor in DLA Piper’s Litigation and Regulatory practice, based in Scotland.