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Don’t let the Pre-Action Protocol go

A Technology and Construction Court (TCC) working party is undertaking a review of the Pre-Action Protocol for Construction and Engineering disputes. I understand that there is support from some quarters for its abolition.

I would like to add my voice to Catherine Gelder’s blog: to stand up for the Protocol and record my support for it. I urge others to do the same.

The Protocol, in my view, performs a useful function and it would be a retrograde step to see it go. No doubt, its working could be improved. Learning from our experience so far, I think the Protocol should be amended, not abolished.

Jackson LJ considered pre-action protocols as part of his review of civil litigation costs. Apparently, during that process, the judges and barristers expressed concern that it might often be a waste of time and costs while solicitors thought that, when followed sensibly, it promoted early settlement and saved costs.

Presumably, barristers and judges hardly ever see disputes that have been through the Protocol process successfully. It is possible that this has given them an overly pessimistic view. With respect to them,  I would have thought that this is an issue on which solicitors are in a position to make a more balanced assessment.

What clients want

Over recent years, BLP has been involved in a lot of disputes that have been through the Protocol procedure. I don’t deny that some cases have been frustrating at times. However, my sense is that in a significant majority of cases, the process has led to settlement without the need to issue proceedings. Even if that takes many months, it is quicker and cheaper than the course of litigation. Settlement without litigation almost always represents an ideal outcome for clients. It is what clients want and therefore offering them this opportunity and doing all one can to make it successful is an integral part of good client service.

Despite what some may tell you, the old days weren’t better

What is the alternative? Do we really want to go back to the days of the “14 day letter”, which often demanded payment on the basis of a few paragraphs and which routinely led to litigation?

I do not remember that being a better or cheaper system.

The commencement of proceedings creates its own momentum and often the reality is that, despite best intentions, the clients and their lawyers may become too busy dealing with the next stage of the process to step back and consider their case and engage with the opposition with regard to settlement.

In any event, even if the Protocol was abolished, I don’t think that similar pre-litigation negotiations would go away. The industry and the lawyers that serve it are aware of this possibility and, I think, inevitably, they would wish to explore it whether or not a formal process existed.

I suspect that an unregulated process would be less satisfactory than the present regulated one.

Ways to improve the Protocol

So let’s keep the Protocol but create better means of overcoming stalling and unreasonable obduracy on the part of participants. I have two suggestions:

  • Access to the court during the Protocol for directions.
  • A more explicit right to recover the costs of the Protocol process.

Access to the court

Firstly, like Catherine, I would suggest a clear, simple and relatively cheap process of applying to the court for directions during the Protocol process. At present, the only sanction against unreasonable conduct is a potential costs sanction at the end of proceedings, if they are commenced. Judging the culpability of such unreasonableness years after the event is difficult. I would suggest that it would be much easier at the time and one could, I believe, rely on the TCC judges to distinguish correctly between those cases where pushing the Protocol process ahead was worthwhile and those where it was not.

Costs recovery

Of course, the other key motivation in disputes is money. Therefore, secondly, I would favour a much more explicit right to recover the costs of the Protocol process, if litigation followed. At present, costs of the Protocol cannot be recovered unless they fall within the principles stated by Sir Robert Megarry VC in Re Gibson’s Settlement Trusts [1981] Ch 179 or can be properly attributable to the conduct of the action (paragraph 2.7.2, TCC Guide).

I suggest reversing that burden of proof. Let us say a right to costs, to be assessed on the standard basis, save to the extent that the paying party can show them to have been unreasonably incurred or clearly not connected with the Protocol process.

A more explicit right to recovery would provide motivation to parties to act quickly and cost effectively during the Protocol process so as to attempt (and hopefully achieve) settlement as quickly and cheaply as possible. It would also strengthen the hand of the party requiring the payment of costs as part of the settlement and therefore have some of the same effect when litigation did not follow.

Would that give license to claimants to put pressure on defendants? I don’t see why, if the claim is a poor one and can be met with a robust response.

One thought on “Don’t let the Pre-Action Protocol go

  1. Oversight of Protocol correspondence by the Courts would be another option in my view.

    A simple requirement to copy the Court into the Letters of Claim and Response would surely focus minds and remove silly behaviour or points at a stroke.

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