Another route for resolving technology disputes?

If you want to take a technology dispute to court, you’re unlikely to get a trial date in the Technology and Construction Court in London for over a year if you are going to need a week or more of the court’s time. With Brexit and Covid causing ongoing commercial and financial uncertainty, is there another quicker option to resolve disputes that parties can consider? The short answer is yes.

Introduced in October 2019, the Society for Computers & Law Adjudication Scheme might be just what parties need. Taking its lead from the adjudication provisions used in construction disputes, the Scheme is designed to provide a fast provisionally binding decision in three months. It can be used for all “Technology disputes” which are defined as “any dispute arising from a contract for the provision of tech-related goods and services including software development contracts, outsourcing arrangements, system integration contracts, IT consultancy contracts, software licensing agreements, blockchain/smart contracts and cloud computing contracts”. There is no restriction on the size or scope of the dispute that can be referred other than that it must be capable of being resolved within three months.

The parties can either include a clause in their contract allowing for disputes to be resolved using the Scheme (and the SCL has a number of model clauses for this purpose). Alternatively they can agree to use it on an ad hoc basis once a dispute has arisen.

If either of the parties is not happy with the decision it can refer the dispute to court proceedings or arbitration in the usual way, effectively getting a second bite of the cherry. In the meantime the parties will still need to comply with the decision. This means that if the adjudicator determines that a sum of money is payable, this must be paid and cannot be recovered unless and until a court or arbitrator determines that it should be. The intention is that the parties will not need to go down the court or arbitration route if experience from the construction adjudication process is anything to go by. Parties need to be aware though that if they are dissatisfied with the outcome they have to start court proceedings or arbitration within 6 months otherwise the decision does become final and binding. 

The SCL has appointed a panel of adjudicators who are experts in their fields with either a legal or technical background. This will hopefully give parties reassurance that they will receive a carefully reasoned decision.

The Scheme may be particularly helpful in long term contracts where the quick resolution of issues may help save a relationship that is likely to be irreparably damaged by the threat of protracted court proceedings. In these circumstances the Scheme can help to act as a pressure valve to release the tensions between the parties quickly, allowing them to continue with their relationship. 

For those worried about the enforceability of an adjudicator’s decision under the Scheme, this is dealt with by summary judgment in the TCC in a similar way to the long established process in construction adjudication. This is an expedited process so should not result in substantial further delay. There are therefore teeth to support the enforcement process if needed.

In summary, for parties looking for an effective way of resolving disputes based on a reasoned decision but without the time and costs involved in court proceedings, the SCL Scheme may provide a useful alternative method of dispute resolution for technology disputes.