How to follow a pre-action protocol

Pre-action protocols are relatively recent introductions to civil procedure, designed to engage the parties in seeking a resolution before claims can come before a court. The pre-action protocol for construction and engineering disputes applies to disputes arising from construction and engineering projects, such as professional negligence claims against architects and claims for defective works. The protocol requires parties to go through certain steps before a claimant can issue court proceedings. These steps are designed to narrow the issues between the parties and create resolution opportunities. By compelling parties to go through these steps, in theory, the prospects of resolving disputes cost-effectively is enhanced.

Readers are likely to be familiar with the principal steps in the protocol, being (i) the claimant setting out the claim in a letter of claim; (ii) the defendant setting out its position in a letter of response and (iii) the parties attending a without prejudice meeting. The process requires these steps to be completed within a fairly limited timescale. Courts focus on the parties’ protocol obligations and will impose cost sanctions where there are failures to comply with the steps.

There is evidence to suggest that the protocol has reduced the number (and scope) of disputes getting to court. Many disputes are resolved at or shortly after without prejudice meetings. There is however also evidence to indicate that parties have frustrated the objective of the protocol by mechanically going through the steps without any intention to seek to resolve the claim; this simply delays matters getting to court and increases costs.

In light of the recent decision by the Technology and Construction Court in Higginson Securities and Spiritualist National Union Trust vs Hodson, the courts have reaffirmed the importance of the protocol as a means of keeping cases out of the courts. This case offers a reminder from the court as to the expectations for parties’ conduct consistent with the objectives of the protocol.

Higginson made a £70,000 claim against an architect for professional negligence and overpaid fees. The protocol process was initiated when Higginson served a letter of claim. Hodson’s letter of response denied the claim entirely. Neither party proposed a without prejudice meeting and Higginson then issued and served proceedings. Hodson applied to the court to stay the proceedings on the basis that because there had been no without prejudice meeting, the protocol process had not been exhausted. Higginson did subsequently offer to meet Hodson (outside the protocol) although Hodson sought to make a meeting subject to Higginson’s agreement to pay their costs.

Higginson argued that there was no merit in a without prejudice meeting given Hodson’s blanket denial of liability and that the protocol had taken matters as far as it could. The key issue for the court was whether issuing the proceedings was “justified” in these circumstances.

The court looked at the wording of the protocol and noted that a meeting was not “absolutely mandatory” but rather, “normally should take place”. The default position was that a meeting should take place unless there is good reason not to. Given the denial of the claim by Hodson, and Higginson’s failure to suggest a meeting, the court was not critical of Higginson issuing proceedings. Hodsons insistence on a meeting was unhelpful. Accordingly, Higginson was justified in issuing proceedings.

The court also made a number of observations on the broader issue of protocol conduct. Slavish compliance with the wording was not appropriate and insisting upon that can be counter-productive. A degree of co-operation is expected between the parties. Critically, the court also highlighted that the overriding objective for all civil procedure also applies to protocol claims. In practice, therefore, parties to protocol claims shall be expected to consider expediency, fairness, saving expense and proportionality.

Higginson offers a warning and a reminder of the basic principles of protocol conduct expected, which should, if applied, assist in reducing the number of claims getting to court.

Digby Hebbard is a partner at Trowers & Hamlins