The SCL Adjudication Scheme (SCLA) provides a cost-effective and speedy procedure for resolving contract disputes. Given the flexible nature of the scheme rules, it is well placed to operate ‘virtually' during the on-going COVID-19 pandemic.
Background to the SCLA Scheme
By way of recap, in October 2019, the SCL launched a three-month adjudication procedure for “technology” disputes – meaning any dispute arising from a contract for the provision of technology-related goods and services including software development contracts, outsourcing arrangements, systems integration contracts, IT consultancy contracts, software licensing agreements, blockchain/smart contracts and cloud computing contracts.
The Scheme is designed to achieve the cost-effective and prompt resolution of contractual technology disputes. There is no restriction on the size or scope of technology disputes that may be referred provided that the matter is capable of resolution within the timescales provided for in the SCLA Rules. In particular, the rules prescribe a maximum period of three calendar months for the Adjudicator to make his or her Decision.
A key feature of the SCLA Rules is that they are intentionally flexible. In particular, SCLA Rule 25 provides the Adjudicator with broad powers which may be exercised upon the application of any party or upon his or her own initiative.
The SCLA Rules may be incorporated into contracts or the parties may agree to refer disputes to the Scheme on an ad-hoc basis.
Use of the SCLA Scheme during the ongoing COVID-19 pandemic
The ongoing COVID-19 pandemic has made the cost-effective and prompt resolution of disputes more important than ever. Businesses may therefore find the SCLA Scheme particularly attractive at this time.
The flexible nature of the SCLA Rules means that the Scheme is well placed to operate effectively during the pandemic through the online sphere. In particular, all filings can be made electronically, and Rule 25 provides Adjudicators with the flexibility they need to ensure that adjudications can operate ‘virtually’. For example, Adjudicators have the power to “determine the arrangements” for hearings (Rule 25.7) which means that they can be held online.
In the COVID-19 context, the procedure may assist where unanticipated situations arise requiring an Adjudicator’s prompt decision – for example, to determine on an ad hoc basis how contracts should respond where service levels have been disrupted or where the delivery of a project has been delayed. Issues involving the interpretation of contracts should be capable of resolution quickly, within the maximum period provided for in the rules.
Michael Bywell (Partner), Duran Ross (Senior Associate) and Lida Tsakyraki (Intern), Hausfeld & Co LLP
SCL "tea and tech": Join SCL members on Wednesday 22 April 2020 @ 3 pm when the SCLA Scheme will be the topic of our weekly "tea and tech" session https://www.scl.org/events/607-scl-tea-tech-scl-adjudication-scheme-as-a-remote-service-wednesday-22-april-2020-at-3-pm