UK: The New Pre-action Protocol Has Come Into Force

Last Updated: 5 December 2016
Article by Tatyana Tihhomirova

The Pre-Action Protocol for Construction and Engineering Disputes ("the Protocol") first came into force some 16 years ago. Following consultation between TeCSA, TECBAR and the judges who deal with construction disputes, a new updated Protocol came into force on 14 November 2016. The revised Protocol introduces some interesting changes, but first it is worth recalling the purpose behind the introduction of the Protocol.

What is the Protocol?

The Protocol applies to all construction and engineering disputes (including professional negligence claims against architects, engineers and quantity surveyors). There are some exceptions where parties will not be expected to comply with the Protocol before commencing proceedings, for example where there may be an issue with limitation or where the claim is in respect of enforcement of an adjudicator's decision, or arises out of matters that have recently been the subject of an adjudication.

TeCSA Survey

TeCSA sponsored a major piece of research with Acuigen to evaluate the perceived value of the Protocol which is undoubtedly a major tool to achieve the aims of Lord Justice Jackson presented in the Review of Civil Litigation Costs Final Report. The TeCSA study contained in the Acuigen report published in January 2016 shows that:

  • 95% of respondents thought that the Protocol was a valuable pre-action mechanism;
  • 87% believed that it is creating access to justice;
  • 49% suggested amendments to make the Protocol more effective;
  • of very real significance for clients, of the 677 disputes that were subject to the Protocol, 277 disputes, or 41%, settled without the need for formal proceedings;
  • such an outcome was one of the key aims of the Jackson reforms and a key point TeCSA felt was often overlooked by the judiciary in the "ones that got away".

The purpose of the Protocol

The primary purpose of the Protocol is to "encourage the exchange of early and full information about a prospective legal claim" and thereby increase the chances of the parties avoiding litigation by agreeing a settlement. In cases where litigation cannot be avoided, the Protocol supports the efficient management of proceedings. Interestingly, the TeCSA Survey showed that almost all respondents agreed with the first statement and only half of the respondents agreed that the Protocol supports the efficient management of proceedings.

Enforcing the Protocol

When determining costs the courts will take into account the conduct of the parties, including whether the parties have complied with the Protocol, but minor transgressions will be disregarded. It will only be in exceptional circumstances that the court will impose costs consequences for non-compliance.

For example, in Sainsbury's Supermarkets Ltd v Condek Holdings Ltd & Others [2014] EWHC 2016 (TCC), following a successful strike-out application, one party was awarded its costs on an indemnity basis as no good reason had been shown for the failure to implement the Protocol before issuing the Claim. Had the claimant done so, the Judge was of the view that it would have obtained all the relevant information it needed to reassess whether proceedings should actually have been brought against that party in the first place. Here, it is thought likely that the Decision would be the same under the new Protocol.

You do not necessarily have to use the Protocol

The most striking change is that parties are not required to comply with the Protocol but only provided they have expressly agreed this in writing.

This decision was in part due to the dissatisfaction expressed by 13% of the respondents to the TeCSA Survey who said that the Protocol was acting as a barrier in more sophisticated disputes, and a similar percentage who also felt that the Protocol should be amended to become a voluntary rather than compulsory process. However, unanimity is required in order to opt out.

A different objective

The objective of the original version of the Protocol was:

"the exchange of early and full information".

The new version has changed this to:

"the exchange of sufficient information to allow the other to understand its position and make informed decisions about settlement and how to proceed".

The TeCSA Survey showed that 13% of the construction firms wanted the Protocol to explore ADR or involve a third party/mediator to help reach settlement. Hence there is a new objective for the Protocol:

"to make appropriate attempts to resolve the matter without starting proceedings and, in particular, to consider the use of an appropriate form of ADR" (paragraph 3).

Reducing the costs of the Protocol

In the case of Iliffe and Another v Feltham Construction Ltd and Others [2015] EWCA Civ 715, Lord Justice Jackson had noted that as long as the Protocol is in place, parties must comply with it. As noted above, when issues of compliance with the Protocol arise, TCC judges look at the substance of the matter rather than the minutiae of the Protocol. Lord Justice Jackson also said that "the court deplores any excessive front loading of costs in order to comply with the protocol".

It is perhaps with this comment in mind that there has been some development regarding the Letter of Claim which is to contain a brief summary of claims and relief (proportionate to the claim). Further, the Protocol expressly provides that expert reports are neither expected nor required, although this will depend on what the claim is about.  The Protocol acknowledges that there may be cases where they are central and can help explain the Claimant's position. The requirement for a Claimant whose claim had previously been made and rejected to deal with the grounds for rejection has been removed.

The requirements of the Letter of Response have also been changed in the same way so that only a brief and proportionate summary of the response to the claim and a brief summary of any counterclaim are required.

The Protocol Referee: a brand new feature

TeCSA and TECBAR have introduced a completely new feature called Protocol Referee Procedure ("PRP").

The prime purpose of the Protocol Referee ("PR") role is to help the parties to comply with the Protocol and/or to assist resolution of any dispute about whether there has been material non-compliance with the Protocol. Importantly, the PR is neither an adjudicator nor an arbitrator and he/she is appointed pursuant to an agreement between the parties.

This particular feature appears to have been introduced as 74% of respondents to the  TeCSA Survey considered that access to and guidance from TCC judges pre-action would be beneficial. Such a high percentage clearly indicated that the parties needed some guidance and direction from the judiciary. The problem presented by this was twofold. First, until proceedings are on foot a judge would not have locus or jurisdiction to superintend the process. Second, the Ministry of Justice (MoJ) would not have the funds to create such a niche. Through collaboration and with the encouragement of Mr Justice Coulson, TeCSA and TECBAR came up with the role of a "lion tamer",1 before settling on the PR, with senior members of TECBAR or TeCSA taking the place of judges.

Some respondents recognised that any additional guidance could introduce some extra costs and delay. This is why the fee to involve the PR is capped at a modest £3,500 plus VAT. With regard to potential delays in invoking the PRP, the procedure is intended to be quick, so this should not be an issue:

The Chairman of TeCSA shall nominate a PR, with the object of securing the appointment no later than 2 working days from receipt of the Application.

Once a PR has been appointed, the Respondent shall submit the Response to the Application no later than 5 working days from the date of the Notice of Appointment.

If a Response is received by the Applicant and PR within 5 working days, the Applicant shall be entitled to submit the Reply no later than 2 working days from receipt of the Response.

The PR shall reach a decision no later than 10 working days after receipt of the Notice of Appointment. In total the procedure amounts to 19 working days, unless extended.

Conclusion

The key provisions of the revised Protocol are as follows:

  • Now only an outline of the claimant's case need be given, and likewise for the defendant's reply. Adding to the previous aims, which were to settle disputes fairly and early, there is now an additional aim to settle disputes inexpensively (paragraph 6).
  • The objective of the Protocol has changed from the exchange of early and full information, to the exchange of: "...sufficient information to allow the other to understand its position and make informed decisions about settlement and how to proceed [emphasis added]."
  • Parties can agree to dispense with the need to follow the Protocol (paragraph 2).
  • The requirements for a Letter of Claim and a Letter of Response have been amended so as to encourage brevity. A Letter of Claim should now contain a brief summary, which should be proportionate to the claim and likewise for the letter of response.
  • Expert reports are no longer required nor expected.
  • The timeframes for compliance have been shortened. Parties should normally meet 21 days (rather than 28 days) after the letter of response. The maximum time for EOTs is 28 days.
  • A meeting or an ADR process such as mediation can take place (paragraph 9.3).
  • There is a new provision for the Protocol action to be concluded automatically at the completion of the pre-action meeting, or 14 days after expiry of the period within which the meeting should have taken place (paragraph 10).
  • Only in exceptional circumstances, such as flagrant or very significant disregard of the Protocol, will the court impose costs consequences for non-compliance (paragraph 4).
  • Finally, a new protocol referee procedure has been introduced. The referees will not be judges, but will be drawn from senior members of the Bar and solicitors experienced in construction and engineering disputes who will be appointed by TECBAR and TeCSA, and the procedure will be administered by TeCSA.

The new upgraded version of the Protocol is intended to encourage an early and full exchange of information about the prospective claim, and thereby increase the chances of avoiding litigation. It also comes with the moral advantage of addressing the concerns of the TeCSA Survey and so it will be interesting to see the extent to which parties choose to adopt the PRP.


1. A comment made by Alexander Nissen QC at the launch of the revised Protocol on 2 November 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Tatyana Tihhomirova
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Clyde & Co
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions