Will the Irish Construction Industry embrace the LVDP?

Purpose of the LVDP

Niall Lawless, who chaired the LVDP Working Group, explained that a Low Value Dispute (LVD) is where the total amount claimed is €50,000 or less, excluding VAT. The aim of the LVDP is to provide SMEs and individuals, who might not otherwise use adjudication, with a simple timetable and procedure for low-value disputes. It offers a flexible yet straightforward approach to the key elements of the adjudication process. The LVDP is designed to be relatively low-cost, providing parties with a clearer understanding and greater certainty regarding the adjudicator’s fees from the outset. This initiative aims to reinforce confidence in adjudication as an attractive and viable dispute resolution procedure for straightforward low-value disputes. The LVDP and the template “Notice of Intention” can be downloaded at https://lvdp.ie/.

Development of the LVDP

The development of the LVDP began in January 2018 in the UK. Niall Lawless, who was then Chair of the CIC ADR Management Board, convened an Adjudicator Nominating Body (ANB) Forum attended by most of the ANBs in the UK. One of the recommended outcomes was the development of a small-value dispute scheme, balancing adjudicators’ fees with the value of the dispute. In May 2018, Lawless established a CIC Working Group to develop what would become the CIC Low Value Disputes Model Adjudication Procedure (CIC LVD MAP). This process was expedited by the existing CIC MAP Edition 5. The CIC LVD MAP was approved by the CIC Business Panel in November 2019 and published on 1 May 2020. The CIC LVD MAP has been embraced by the UK construction industry, with about 800 adjudicator appointments from 1 May 2020 to the end of March 2025.

In Ireland, following a June 2022 workshop facilitated by Bernard Gogarty, Chair of the Construction Contracts Adjudication Service, a group of stakeholders convened a Working Group to explore the merits and potential format for a model LVDP. The CIC agreed in March 2023 that the Working Group could adopt terms from the CIC LVD MAP into the LVDP. The development process included 12 Working Group meetings from October 2022 to November 2024 and a public consultation from June to September 2023. The LVDP First Edition was published on 3 December 2024. To support centralised downloads of the LVDP and the template Notice of Intention, Lawless registered the top-level domain https://lvdp.ie/ in June 2023, now controlled by the CIF on behalf of the Participating Organisations. The CIF will also collate statistics on LVDP use.

Designated Organisations

A “Designated Organisation” is an entity that nominates an adjudicator. As outlined in the LVDP Schedule D, these include the Chartered Institute of Arbitrators, the Construction Industry Federation, and Engineers Ireland. These organisations maintain a panel of suitably qualified adjudicators and will nominate an adjudicator for €250 plus VAT. Lawless actively encouraged all Participating Organisations to become Designated Organisations, hoping more will join in the future.

Competition Commission Concerns

During the development of the LVDP, some individuals expressed concerns that the Competition and Consumer Protection Commission might have issues with the LVDP. Lawless considered these concerns as unfounded, and raised in a manner to help ensure the LVDP failed. He emphasises that the LVDP is a contract freely entered into by the Referring Party, the Responding Party, and the Adjudicator, and does not displace the Construction Contracts Act 2013 adjudication. The LVDP allows parties to choose from three different bases for paying the Adjudicator’s fees and expenses. The Schedule B ‘ad valorem’ mechanism is like the mechanism used by the ICC in Paris, the SCC Arbitration Institute in Stockholm and the CIC LVD MAP. Lawless highlighted that the Working Group did not determine the Schedule B and Schedule C rates, which were independently assessed by Cathal Ryan.

Future Control of the LVDP

Looking ahead, the Working Group agreed in November 2024 to review the LVDP (Edition One) at the end of March 2025 to determine if adjustments or updates are needed. The Working Group is now Functus Officio, meaning it has completed its task. Any future updates will be decided by the majority of the Participating Organisations active when the LVDP was published on 3 December 2024. The future development of the LVDP can be controlled by the three Designated Organisations: the Chartered Institute of Arbitrators, the Construction Industry Federation, and Engineers Ireland. Lawless views this as a positive outcome, given their steadfast support and financial contributions to the LVDP Development Expenses.

Concerns with the application of the LVDP in Ireland

When asked about any concerns with the application of the LVDP in Ireland, Niall Lawless highlighted the importance of succession planning. One of the ancillary objectives of the LVDP is to provide inexperienced adjudicators with professional development opportunities to make Adjudicator’s Decisions. Lawless, who has been on the CIArb Presidential Panel of Arbitrators since 2008, interviewing members applying for Chartered Arbitrator status, noted that this has recently extended to interviewing members applying for the CIArb Panel of Construction Adjudicators. He recounted an instance where a candidate presented a sub-standard CIC LVD MAP Adjudicator’s Decision and consequently failed their interview. Lawless suggested that mentoring from the CIArb, the CIF, and Engineers Ireland would be beneficial for inexperienced adjudicators on their panels.

He has also proposed the adoption of a unified “Adjudicator Complaints Procedure” by the LVDP Designated Organisations. This procedure, like the CIC Adjudicator Nominating Body Complaints Procedure published on 28 November 2016, would enhance the standing of the LVDP and protect its integrity. It would clarify that in investigating complaints, the Designated Organisation would act in an administrative capacity, not a judicial one, and could not entertain challenges to or appeals from Adjudicators’ decisions. The outcome of such a procedure would never result in compensation to the complainant or amendments to an Adjudicator’s Decision.