It is important to understand there are strict rules on how you should act prior to bringing a claim, as failure to observe the correct protocol may incur penalties if the matter does come to court.  The basic position is set out in the Practice Direction on Pre-Action Conduct and Protocols. The Protocols, approved by the Master of the Rolls and annexed to the civil procedure rules (CPR), are designed to ensure that all parties are completely clear on a number of things including each other's position, the costs involved and have considered alternative dispute resolution (ADR) to settle the matter.

Khizar Arif, a partner, commented "a Protocol is simply a set of rules and steps that you should follow in a range of legal actions and circumstances. A list of Pre-Action Protocols can be found at the bottom of the Practice Direction. These include Protocols for Debt Claims, Media and Communications Claims and Professional Negligence amongst others. If you need help determining which Protocol would be most relevant to your claim, Giambrone & Partners' litigation and dispute resolution lawyers can help clarify the obligatory steps that you must take." Khizar further remarked "pre-action protocols help to clarify the situation and direct the parties involved to a resolution that does not involve appearing before the court"

First, the concept of proportionality is very important. Proportionality means the steps taken by the parties must be reasonable and proportionate to identify, narrow and resolve the issues; and the costs incurred must not be excessive. Para. 5 provides that any disproportionate costs will not be recoverable as costs of the proceedings at the end of the case.

Second, there are steps that you must follow before commencing court proceedings. These include writing to the defendant setting out the concise details of the claim, including the basis of the claim, a summary of the facts, and what the claimant wants from the defendant. Here, the defendant is also required to follow the protocol by responding to the Letter of Claim in a reasonable time. The reply should confirm whether the defendant accepts or rejects the claim.  The reasons for the decision should be forthcoming and should provide details of a counterclaim if one is to be raised. All parties should disclose relevant documents at this stage.

Third, litigation is to be used only as a last resort. The court encourages, and it is often most advantageous, for parties to reach a settlement out of court. The Practice Direction stipulates that parties should consider whether negotiation or other forms of ADR might enable them to settle their dispute without commencing proceedings. As going to court is recognised as often risky, expensive and bad publicity, it is almost always better for the parties to seek a settlement outside of court. To this end, both parties should consider the use of mediation, arbitration, early neutral evaluation or Ombudsman schemes.

Part 36 offers, a provision in the Civil Procedure Rules (CPR) is designed to encourage parties to settle disputes, where both claimants and defendants set out what they are prepared to offer or accept to resolve the dispute. Also offers made without prejudice, may be made and accepted at this stage. 'Without Prejudice' offers are offers you can freely make to the other party without fear it will be subsequently used against you.

If ADR fails to elicit a settlement between the parties, the Practice Direction encourages the parties to do a stock take and review their respective positions. This means you should reconsider the papers and evidence to make a final decision as to whether you wish to proceed with a claim.

If the dispute does proceed to litigation, the court will examine whether the parties have fully complied with the relevant Pre-Action Protocol and the above-mentioned Practice Direction. It is important to ensure you have, as the court will hold it against you if you have not.  Naturally, the court will consider whether the breach of a Protocol, if any, is substantial or minor, and will then decide the best course of action. The court may, depending on the circumstances,

  1. Waive the requirements of a Pre-Action Protocol and/or the Practice Direction;
  2. Order the party in breach to pay the full costs or part of the costs of the proceedings;
  3. Deprive the party deemed to be at fault of the interest on their award; and/or
  4. Award the other party an increased interest rate.

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.