What is the Pre-Action Protocol and What Does it Require?

Introduction

The Pre-Action Protocol for Construction and Engineering Disputes is a framework designed to manage construction-related disputes before litigation is begun. It is, in short, a document that sets out certain things the parties are supposed to do.

Its primary goal is to encourage the early exchange of information between the parties so that both understand each others’ arguments. The benefit of this is that there are fewer opportunities for misunderstanding, and a greater prospect of settling the claim.

In short, the point is to avoid litigation: to make sure that the parties have had a good opporunity to talk to each other meaningfully in advance of a claim being made.

If settlement is not possible, the protocol helps ensure efficient management of any ensuing legal case.

Summary of Key Points in the Protocol:

1. Scope of the Protocol:

   • The Protocol applies to all construction and engineering disputes, including professional negligence claims against architects, engineers, and quantity surveyors.

   • There are situations where the protocol does not apply, such as cases involving an imminent expiration of the legal time limit for starting litigation (known as the limitation period), or when a party seeks an injunction or summary judgment.

2. Protocol Process Overview:

   • Before litigation, the parties must exchange information about the dispute. The amount of detail must be proportionate, so a simple dispute that is low-value and straightforward will not require as much infomration as a complex, high-value dispute might. The key is to exchange enough detail that allows both sides to understand the issues at hand and potentially settle without going to court.

   • There are three steps for each side:

     • first, the claimant (who is bringing the case) must send a concise letter of claim to the other side;

     • second, the defendant (who is facing a claim against it) must respond in a set timeframe; and

     • third, the parties should meet to discuss the case.

3. The Letter of Claim:

   • The claimant should send a letter to the defendant that outlines the claim, including key details like the nature of the dispute, important dates, and key documents (such as contracts, or invoices) that support the case.

   • This letter should be clear, but not overly detailed. The goal is for the defendant to understand the basic allegations and be able investigate them without being confused or uncertain as to what the issues are.

4. The Response:

   • The defendant has 28 days to respond to the letter of claim. This response should address the issues raised, provide any defences, and include details of any counterclaims.

   • If the defendant does not respond in time, or at all, the claimant can proceed to litigate without having to take any further steps under the Protocol.

5. Expert Involvement:

   • Both parties are encouraged to engage experts early on to help assess the technical aspects of the case. However, expert reports are not mandatory at the letter of claim stage unless they are crucial to explaining the claim.

6. Alternative Dispute Resolution (ADR):

   • The protocol stresses the importance of considering methods other than litigation (known, collectively, as ADR) such as mediation to resolve disputes outside of court. Both parties should show that they have seriously considered ADR before proceeding with litigation.

   • If ADR is not attempted without good reason, the court can impose penalties later.

7. Time Limits and Deadlines:

   • The protocol has specific timeframes for each stage, such as the 28-day deadline for the letter of Response, and it is important to adhere to these deadlines where possible. Failing to meet them without warning and/or good reason can negatively affect the defaulting party in several ways including that the court might impose penalties an sanctions.

8. Without Prejudice Meeting:

   • Before commencing formal proceedings, the parties are encouraged to meet with each other at a "without prejudice" meeting. This is an “off-the-record” discussion to explore settlement options in an environment where the discussion can be open, and frank.

   • The meeting is not mandatory, but it can (and very often will, immesurably) help either to resolve the dispute without court involvement, or to better inform the parties prior to going to court.

9. Special Procedures for Certain Disputes:

   • Some disputes, such as those under what is called the "shorter trials scheme" or involving litigants based outside the UK, may have modified procedures to streamline the process or account for specific circumstances.

Consequences of Non-Compliance with the Protocol

If a party fails to comply with all or a part of the Protocol, the court may penalize them at a later stage. These penalties could include cost sanctions or staying (pausing) the proceedings to allow compliance.

In exceptional cases, where a party has clearly disregarded the protocol, the court may impose significant sanctions, including unfavorable cost orders or adverse judgments.

However, minor deviations from the protocol are generally not harshly punish (and are sometimes not punished at all) providing that the parties have shown willing.

Summary

In summary, the Pre-Action Protocol for Construction and Engineering Disputes aims to give parties the best chance to resolve disputes efficiently and with minimal court intervention.

By promoting early communication, reasonable behavior, and consideration of settlement options, the Protocol helps parties avoid engaging too quickly with costly and lengthy litigation.

If court proceedings are unavoidable, following the protocol ensures that both parties are well-prepared, and the case is managed effectively from the outset

The Hamshaw team knows the Protocol inside out, and can advise both on what is needed, and what you might get away with leaving out. If you need help preparing correspondence that complies with the Protocol, contact Hamshaw today.