Practice Direction – Pre-Action Conduct and Protocols

Depending on the nature of the dispute, there are specific protocols for certain types of claims, such as Construction and Engineering disputes; Housing Disrepair and Professional Negligence. Where a claim does not fall within a specific protocol, the parties must use the Pre-Action Protocol. A full list of the relevant pre-action protocols in force can be found at paragraph 18 of the Pre-Action Protocol.

The objectives of the Pre-Action Protocol are for the parties to have exchanged enough information prior to entering into court proceedings to ensure that each party:-

(a) Has a good understanding of the other party’s position;

(b) Is able to make an informed decision about how best to proceed;

(c) Is able to try to settle the dispute without the need for court proceedings;

(d) Can consider a form of Alternative Dispute Resolution (ADR) to assist with settlement;

(e) Is able to support the efficient management of those proceedings; and

(f) Can reduce the costs of resolving the dispute.

In relation to pre-action costs, it should be noted that these should be kept proportionate to the sums in dispute (or any non-monetary relief sought); the complexity of the dispute and other factors set out in the Costs Rules at CPR 44. Pre-Action costs may be recoverable by the successful party to a court claim but only if the court considers these to have been reasonably incurred.

Before any claim is issued at court the prospective claimant must set out concisely in correspondence to the prospective defendant the details of their claim in what is often referred to as a Letter of Claim, consisting of a summary of facts to include the basis upon which the claim is to be made; what the claimant expects from the defendant and, if it is a money claim, it should clearly set out how the sum sought is calculated.

The prospective claimant must afford the prospective defendant a reasonable time to respond, taking into account all the facts of the case – for a straightforward case a defendant may only need 14 days to provide their response; however for a more complex case, a defendant may request up to 3 months to reply. The prospective defendant should reply detailing whether the claim is accepted, or if not accepted, the reasons why and setting out specifically what parts of the claim are disputed. A prospective defendant may also use this opportunity to say whether they intend to make a counterclaim against the prospective claimant and set out that claim appropriately. The parties should use this exchange of correspondence as an opportunity to disclose key documents upon which they intend to rely to support their respective positions.

The parties are able to use the pre-action stage to obtain expert evidence; however, it should be noted that a party must seek the permission of the court to be able to rely on such expert evidence during the course of proceedings and, particularly in low value claims within the Small Claims Track, the court may consider the use of experts as a disproportionate expense.

The court considers that litigation should only be used as a last resort. It should not be used as the primary means of resolving a dispute and the court will expect the parties to reflect on settlement options and ADR, such as mediation or arbitration, before bringing the dispute before the court. Some useful guidance in respect of mediation can be found here. The court may look unfavourably on a party who refuses an invitation to participate in ADR and, in some cases, impose costs sanctions.

The court will likely not be concerned with minor breaches of the Pre-Action Protocol or other relevant protocol provided that a party has:-

(a) provided sufficient information to the other party to enable the objectives to be met;

(b) acted within the time limit set out in a relevant protocol, or within a reasonable period; and,

(c) not unreasonably refused to use a form of ADR or failed to respond to an invitation to do so.

However where the court may determine that there has been a material failure by one or both parties to adhere to the Pre-Action Protocol or relevant pre-action protocol, the court has the power to relieve the parties of any such obligation, or stay the proceedings in order compliance can be achieved. The court also can apply sanctions to a non-complying party, which could include an order to pay the costs, or part costs, of the other party or other costs sanctions as set out in paragraph 16 of the Pre-Action Protocol.

Where limitation considerations apply and a claim must be issued in order to avoid the same being statute barred, it may be necessary for the parties to delay compliance with the Pre-Action Protocol or relevant pre-action protocol until the claim has been issued and the proceedings stayed to allow for compliance. In all other cases the procedure under the Pre-Action Protocol ought to be exhausted (at proportionate cost) before proceedings are issued as a matter of last resort if the parties are unable to dispose of the dispute by agreement.