#10344 - Pre Action Protocols - BPC Civil Litigation

PRE-ACTION PROTOCOLS

• co-operation facilitates settlement at early stage - encourage exchange of information and ADR

• departure from protocol must be explained to court, and may attract sanctions

• Apply to 3rd party and normal proceedings

• MoJ has published 12 pre-action protocols, and PD on pre-action conduct:

  1. Practice Direction - Pre-Action Conduct

  2. Pre-Action Protocol for PI Claims

  3. Pre-Action Protocol for Resolution of Clinical Disputes

  4. Pre-Action Protocol for the Construction and Engineering Disputes

  5. Pre-Action Protocol for Defamation

  6. Professional Negligence Pre-Action Protocol

  7. Pre-Action Protocol for JR

  8. Pre-Action Protocol for Disease and Illness Claims

  9. Pre-Action Protocol for Housing Disrepair Claims

  10. Pre-Action Protocol for Possession Claims based on Rent Arrears

  11. Pre-Action Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in respect of Residential Property

  12. Pre-Action Protocol for Low Value PI Claims in RTAs

  13. Pre-Action Protocol for Claims for Damages in Relation to the Physical State of a Commercial Property at Termination of a Tenancy (the Dilapidations Protocol)

PD ON PRE-ACTION CONDUCT (cases not covered by specific protocol)

The protocol

Annex A - applies to straightforward claims likely to be disputed

Annex C - guidance on instructing experts

Annex B - information to be provided in debt claims where C = business and D = individual

• Does not apply to

  • consent orders

  • most applications for directions by a fiduciary

  • without notice applications e.g. freezing orders

• Approach of the courts

  • court can take into account extent parties comply when giving case management directions - r3.1(4) and (5), r3.9(1)(e)

  • court expect parties to have complied

  • court may expect parties to explain non-compliance

  • court consider:

    • compliance in substance minor shortcomings ok

    • proportionality of steps v importance of matter

    • urgency of matter - if urgent, parties only expected to comply as far as reasonable

• Sanctions for non-compliance

  • court consider overall effect of non-compliance on other party

  • if court decides has been non compliance sanctions court may impose:

    • order of stay till steps done

    • order party at fault to pay costs proportionate to breach

    • order party at fault to pay costs on indemnity basis

    • if winning C at fault, deprive of interest on damages/reduce rate

    • if D at fault, increase interest on damages

    • pay money into court - r3.1(5)

• Principles governing pre-action conduct where no specific protocol

  • unless circumstances make it inappropriate, before starting proceedings parties should:

    • exchange sufficient info about matter to

      • allow them to understand each other's position

      • make informed decision about settlement and how to proceed

    • try to resolve

    • consider ADR, throughout proceedings

  • act reasonably and proportionately

    • costs should be proportionate to complexity of matter and money at stake

    • must not use PD tactically

• Exchanging information before starting proceedings

  • debt claims only - at any time before letter of claim, C should

    • provide details of how money can be paid

    • state that D can contact C to discuss repayment, including contact details

    • inform D that free debt advice is available and where from

  • C should set out details in letter of claim

    • give concise details to allow D to understand and investigate w/o needing to request further info:

      • letter should include

        • C's full name and address

        • basis on which claim made

        • summary of facts

        • remedy desired

        • if financial loss claimed explanation of how calculated

        • details of any funding arrangement of C

      • letter should also

        • list essential documents C intends to rely on

        • set out form of ADR, invite D to agree

        • state date C considers reasonable for D to respond by

        • ID and ask for copies of any relevant documents not in C's possession and which C wants to see

      • unless D known to be legally represented, letter should

        • refer D to PD pre-action conduct, especially sanctions for non-compliance

        • inform D that ignoring letter may lead to C starting proceedings and increase D's costs

  • D should provide full written response w/in reasonable period:

    • reasonable:

      • simple matter 14 days

      • 3rd party involved 30 days

      • complex matter 30+ days

      • exceptional circumstances 90+ days

    • if D cannot provide full response should provide - w/in 14 days - written acknowledgement instead:

      • state whether insurer involved

      • state date by which D / insurer will provide full written response

        • if later than that C stated as reasonable in letter of claim, D should give reasons

        • if C starts proceedings before this date, court consider whether period specified by D reasonable

      • may request further info to enable full response

      • if D cannot provide full response because intends to seek (debt) advice

        • state:

          • seeking (debt) advice

          • from whom

          • when D expects to have received advice

        • C should allow up to 14 days for D to obtain advice

        • debt claims only - BUT C need not allow D time if C knows:

          • D already received debt advice and circumstances haven't changed

          • D has previously requested time to seek debt advice and hasn't

    • full written response should

      • accept claim in whole / part; or

      • deny liability

      • if C accepts in part / denies liability, response should

        • give reasons, IDing which facts accepted / disputed and basis of dispute

        • state whether D will counterclaim (give details cf letter of claim)

        • state whether D alleges C wholly or partly to blame and summarise facts relied on

        • state if D agrees to C's suggestion of ADR and if not, suggest alternative

        • list essential documents D intends to rely on

        • enclose copies of documents requested by C / explain why not providing

        • ID and ask for copies of any relevant documents not in D's possession and which D wants to see

  • C should reply

    • provide documents requested by D ASAP / explain in writing why documents not provided

    • if D has counterclaimed, C should provide 'full written response'

  • if matter not resolved on completion of procedure, parties should review their positions to see if proceedings can be avoided

• Disclosure

  • disclosed documents must not be used for purpose other than resolving dispute unless disclosing party agrees in writing

• Funding arrangements

  • party must inform other parties within 7 days of entering funding agreement / in letter of claim

  • costs recovery may be restricted if don't provide information

• Experts

  • if expert evidence necessary, try to minimise costs:

    • instruct single joint expert (engaged and paid jointly by parties); or

    • agreed expert:

      • before either party instructs expert, C lists names of 1+ experts

      • within 14 days D may object to 1+

      • as long as D doesn’t object to all, C instructs (and bears costs of) mutually acceptable expert

      • if D objects to all, parties instruct separate experts BUT court decides at allocation stage if cost of 2 experts justified

      • if D does not object, cannot then rely on own expert evidence unless C agrees, court directs or C amends expert report and will not disclose original

• Limitation periods

  • if limitation expired = defence

  • if compliance not possible before expiry of limitation, start proceedings, then apply for order to stay

• Notifying court

  • party should state in claim form / particulars that they have complied with the protocol

Commentary

• Lord Woolf - increase benefits of early & well informed settlements to both parties

• = 'codes of best practice to be followed generally but not slavishly' C1A-008

• litigation = last resort; part 36 can be made at any time; cards on table; proportionality

• courts increasingly refer cases to ADR if proceedings started

  • BUT if C unwilling to compromise, D unlikely to be penalised by failure to mitigate

  • ADR clauses in commercial contracts have been held to be enforceable stay

• letter of claim

  • failure to send = unreasonable sanction (indemnity costs)

• D's response:

  • detailed

  • not just denial

  • ignoring / replying too briefly = breach

  • if D admits liability, admission should be clear

  • if D denies liability, denial should include reasons & docs

Court's compliance role C1A-010

• court can order party to pay court for breach w/o good reason - r3.1(b)

• if unnecessary proceedings commenced, court will try to put innocent party in position would've been in if protocol complied w/

• sanctions have been described as a 'paper tiger' i.e. sanctions not being imposed

• r31.16 extends courts' jurisdiction to order pre-action disclosure of documents in any case

  • disclosure must be necessary - not fishing expedition

• parties must act reasonably in line w/OO

  • costs must be proportionate to complexity

  • parties must not use PD as a tactical device to secure unfair advantage/generate costs unnecessarily

• resolution should be attempted by realistic Part 36 offers

• if C loses claim and has not sent letter before claim, court may make order for indemnity basis costs

PI PROTOCOL

• all claims which include PI claim

• PI up to 25k i.e. likely to be fast track if proceedings start

• 1k-10k RTA claims covered by RTA Protocol, unless claim drops out, in which case, proceeds under PI protocol

• spirit of PI protocol should be followed in larger cases

• parties can depart from protocol if give court reasons

• in early stages C may send informal letter to D / insurer intimating claim, but not compulsory in protocol

The procedure

• early notification - C's legal rep may wish to notify D and/or insurer as soon as know claim likely to be made

  • does NOT start timetable for responding

• 2 copies of letter of claim to D (does not have same status as SoC)

  • 1 for D, 1 for D to give to insurer

    • if D delays in sending to insurer,...