The Society for Computers and Law (“SCL”) has launched an Adjudication Scheme which aims to resolve disputes arising from technology-related goods and services contracts, including software development contracts, outsourcing agreements, software licensing agreements and cloud computing contracts.

How does the Scheme work?

Prospective parties to a technology-related contract wishing to benefit from the Scheme can incorporate the SCL adjudication rules into their contract. Any dispute which then arises under the contract will be referred to an SCL-appointed adjudicator (who may be a lawyer or a non-lawyer IT specialist) who will determine (i) what damages and/or debt is payable, (ii) what a party must do or refrain from doing something and/or (iii) any contractual rights or obligations of a party.

Once an adjudicator has been appointed (from a panel of pre-selected adjudicators), they will deliver a decision in writing within three calendar months. This decision will become binding in six months, as long as no challenge is made. A party therefore has six months within which to commence litigation or arbitration proceedings if they wish to do so.

Advantages and disadvantages of the Scheme

The clear advantage of the Scheme is its promise to conduct the adjudication in a timely and cost-effective manner, avoiding the steeper costs which may be associated with formal litigation or arbitration proceedings. Moreover, parties are jointly and severally responsible for the fees and expenses of the adjudicator (which are capped to equip the parties with a greater degree of certainty). A further benefit for the successful party is that the decision of the adjudicator can be enforced by application to the specialist Technology and Construction Court, if necessary, which aims to list hearings within 28 days.

There are strict limits about the volume of documentation that a party can disclose in the adjudication process, as well as strict time-limits (such as respondents having to serve any counterclaim within 10 working days from receiving the claimant's statement of case). This means that the scheme may not be suitable for a dispute that is highly complex (which will be compounded if a non-lawyer adjudicator is responsible for presiding over a complex contractual dispute, though this may be mitigated by adjudicators having to the meet eligibility criteria set by SCL).

Want to use the Scheme or discuss further?

We are experts in commercial dispute resolution and would be happy to assist you to resolve any technology-related dispute.