REUTERS | Mike Blake

Multi-party disputes and the TCC pre-action protocol

We have recently been involved in a large, multi-party dispute where compliance with the Pre-Action Protocol for Construction Engineering Disputes (the Protocol)  gave rise to various practical questions:

How detailed should the letter of claim and/or the defendant’s response be?

The Protocol aims to ensure that the parties provide sufficient information for each to know the nature of the other’s case, but this does not mean that each allegation must be set out and responded to in exhaustive detail: costs incurred at the Protocol stage should be proportionate to the complexity of the case and the amount of money at stake. A balance must be struck. If the court perceives that the Protocol is being used for tactical reasons, it is likely to impose cost sanctions.

Costs incurred by the defendant in relation to allegations that are subsequently abandoned by the claimant at the pre-action stage are not recoverable. This puts the defendant in a difficult position: it must strike a balance between responding to the claimant’s allegations, without incurring excessive (and potentially irrecoverable) costs. It seems there is no clear answer.

Should co-defendants/Part 20 defendants be given the opportunity to comment on the defence of another co-defendant or to pass on matters raised by Part 20 defendants?

The Protocol does not specifically address multi-party claims and, in particular, does not provide guidance on this question. The spirit of the Protocol suggests that a claimant should allow defendants time to deal with such issues. Having allowed a reasonable time, a claimant can rely on the court enforcing the CPR’s overriding objective of dealing with cases justly, which applies to the pre-action stage. The court will consider whether a defendant is using the Protocol as a technical device to secure advantage, or if it is generating unnecessary costs.

What if the other party is uncooperative?

The Protocol can play into the hands of parties intent on delaying matters and being generally obstructive, particularly in multi-party disputes. If one party is prolonging the process unnecessarily, the other party should set out its complaints in writing at every available opportunity. This correspondence can then be used to support any future application it makes to the court.

What if disclosure is insufficient?

One aim of the Protocol is to ensure better and earlier exchange of information. This means that the parties should act reasonably and proportionately in providing pre-action disclosure. However, a party may seek to hide behind paragraph 1.5 of the Protocol, which states that it is not necessary to disclose all evidence that may ultimately be required at trial. If one party believes that another party is being unreasonable in not providing key documents, it should consider making a pre-action disclosure application to the court (CPR Part 31.16 ).

The TCC has made it clear that parties should avoid a slavish application of the rules. The key is to follow the spirit rather than the letter of the Protocol.

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