All very civil

The pre-Action Protocol, which is part of the civil procedure rules, has attracted surprisingly little attention since its introduction in October last year. However, it is a useful way not only of resolving disputes but of avoiding the need for full-blown court proceedings. It contrasts in several ways with adjudication.

The idea of a protocol is to regulate the parties' actions before formal proceedings. Lord Woolf, architect of the CPR, was concerned that there was little to control conduct before the court became involved, and that parties often failed to address and identify their true differences.

Lord Woolf stated that pre-action protocols were intended to "increase the benefits of early but well-informed settlements which genuinely satisfy both parties to a dispute". As such, they echo features of alternative dispute resolution. The fact that the courts require compliance with the protocol enables the parties to engage in an early dialogue without loss of face. This was traditionally a concern when suggesting, for instance, mediation to an opponent.

Parties are expected to have complied with the substance of the pre-action protocol before proceedings are issued, and the court may impose cost and interest penalties for failure to do so, and could even stay the action. However, if the intended defendant fails to co-operate, the claimant can go ahead and issue proceedings.

The pre-action protocol for cases in the Technology and Construction Court was developed with input both from the judges in that court and the solicitors' body, TeCSA. As such, it should be well-tailored to meet the needs of the construction industry.

The protocol procedure consists of a letter of claim, provision for a response to that claim and then a without-prejudice meeting between the parties. The letter of claim should enable each party to understand what is being alleged, providing a clear summary of the facts on which each claim is based, identifying the principal contractual terms and statutory provisions relied on. It should set out what is claimed and show how damages have been quantified.

Each defendant is required to respond to the letter of claim. The initial time limit for a response is 28 days. The parties can (and frequently will) agree to extend this period.

The protocol encourages the exchange of information – adjudication encourages ambush

The defendant's response should state what is agreed in terms of the facts and damages, or extensions of time claimed. The defendant should set out the basis for its views. If the defendant intends to counterclaim, then the defendant should give the same level of information as for a letter of claim.

The protocol also dictates that the parties should meet formally on at least one occasion. Under the old rules, the parties may not have met until the day of the trial. The aim of the meeting is to agree the main issues in dispute, consider how they might be resolved without recourse to litigation and, if litigation is unavoidable, discuss how it should be conducted to ensure the case is dealt with justly and at the minimum cost and delay.

Those attending the meeting should have authority to settle the dispute. Other parties with a commercial interest in the dispute should be present or represented. These may be insurers and any party on whose behalf the claim is made or defended – possibly a subcontractor where the main contractor is making a claim pursuant to a contractual obligation to pass on subcontract claims to the employer.

There are similarities between a pre-action protocol meeting and mediation. The meeting is without prejudice and the parties should have exchanged information beforehand. The protocol requires the parties to consider whether some form of ADR would be appropriate to each agreed issue or the dispute as a whole. It is only a small step from this to treat the pre-action meeting as a form of ADR in its own right.

Of course, this procedure is in contrast or conflict with adjudication as a process. The protocol aims to settle disputes and differences without proceedings, whereas adjudication puts the dispute to the adjudicator to determine. The protocol encourages the exchange of information – adjudication encourages ambush. The protocol encourages detailed preparation, whereas adjudication, once begun, gives little time for anything.