“Don’t Trip Before You Start: Navigating Pre-Action Protocols”

Introduction

Pursuing litigation or responding to a claim is a stressful process. There are a number of considerations which one needs to consider, including an assessment of merits, strategy decisions, and budget limitations. However, before a court claim is officially commenced, i.e. a court claim is filed with the court, it is expected that the parties comply with a series of steps and procedures known as a pre-action protocol. A failure to engage in the protocol may have serious adverse consequences on your case, including penal costs orders once litigation has commenced. Pre-action protocols are not obligatory, though compliance is strongly encouraged.

This article provides an overview of the pre-action conduct regime applicable to any matter where there is a possibility of court action in the English Courts.

The pre-action protocols set out the steps that each party should take before initiating legal action and can also be used as an attempt to support parties in settling the dispute without litigation. The protocols allow the parties to acquire the information they need to partake in the negotiation. However, if settlement is not possible, the protocols establish a framework for commencing proceedings efficiently. 

Pre-action rules:

Certain types of claims warrant compliance with specific pre-action protocols. These case-specific protocols address the unique nature of each dispute and are tailored to reflect the realities and quirks of such disputes. For example, defamation, judicial review, and professional negligence all have distinct protocols. These protocols ensure that the necessary steps are taken for each type of claim, assisting in resolving the issues effectively. 

Types of protocol:

• Construction and Engineering
• Debt claims
• Defamation
• Dilapidation of Commercial Property
• Disease and Illness
• Housing Disrepair
• Judicial Review
• Low Value Personal Injury Employers’ and Public Liability Claims
• Low Value Personal Injury Road Traffic Accident Claims
• Personal Injury
• Personal Injury Claims Below the Small Claims Limit in Road Traffic Accidents
• Possession Claims by Social Landlords
• Possession Claims for Mortgage Arrears
• Professional Negligence
• Resolution of Clinical Disputes

It is crucial for parties to follow the relevant protocol for their type of claim, as this ensures that the process aligns with the specific requirements and expectations set out by the court.

What if no relevant pre-action protocol exists?

If you cannot find a specific pre-action protocol that applies to your case, you will be expected to follow general court prescribed guidelines for communication and settlement. These are set out in a document titled “Practice Direction – Pre-Action Conduct and Protocols” (the Pre-Action Practice Direction), which is available on: https://www.justice.gov.uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct 

The Objectives of Pre-action Rules

Paragraph 3 of the Pre-Action Practice Direction sets out its objectives. The court expects parties to have exchanged enough information to:

1. understand each other’s position;

1. make decisions about how to proceed;

1. try to settle the issues without proceedings;

1. consider a form of Alternative Dispute Resolution (ADR) to assist with settlement;

1. support the efficient management of those proceedings; and

1. reduce the costs of resolving the dispute.

All of the above are firmly embedded in the principle of proportionality, which serves to reduce adversarial conduct and ensure costs are proportionate to the value of a dispute.

The court explicitly warns future litigants that a pre-action protocol or the Pre-action Practice Direction must not be used by a party as a tactical device to secure an unfair advantage over another party. Only reasonable and proportionate steps should be taken by the parties to identify, narrow and resolve the legal, factual or expert issues. In other words, the protocols should not be exploited to gain an unfair advantage.

As for the costs, any costs incurred while adhering to the pre-action protocol must be proportionate to the case at hand.

If the protocol process does not result in settlement and the claimant does not continue with the claim, the defendant typically cannot recover costs. However, if proceedings are issued and then stayed to allow protocol compliance, there may be some recovery of costs, provided they are proportionate.

The Pre-Action Practice Direction follows these steps:

1. The claimant’s initial letter: This letter is known as a letter of claim, letter before claim or letter before action. This letter acts as a final caution to the other party that court proceedings will commence if the dispute is not resolved within a reasonable timeframe. In this letter, the claimant should provide concise details of the claim, the basis on which the claim is made, a summary of facts, what the claimant wants from the defendant, and, if monetary compensation, how the amount will be calculated. A failure to issue a letter before action, save for limited circumstances, and proceeding directly with a court claim can result in a costs order against the claimant. 
2. Defendant’s response: The defendant is required to respond to a letter before action within a reasonable timeframe, typically 14 days for straightforward cases or up to three months for more complex issues. The response should either accept or deny the claim, with reasons provided. If the defendant denies the claim, the reasons should include specific facts and details of any counterclaims. The defendant may also choose to make a counterclaim against the claimant and should put forward that claim appropriately in a letter before action. 
3. Exchange of documents: Both parties should disclose documents that are crucial to understanding the disputed issues, allowing each side to assess the case fully. This could include disclosure of contracts, emails, invoices, photographs and other material evidence. If a party fails to disclose relevant documents or ignores a reasonable request, the court may penalise them later by making a costs order against them.

Expert Evidence

If expert evidence is needed, a permission to adduce such evidence and rely on it must be sought from the court (see CPR 35.4(1)). In many cases, disputes can be resolved without needing expert advice or evidence. If expert evidence is necessary, especially for low-value claims, parties should consider appointing a single expert, agreed upon and jointly instructed by both sides, with the costs split equally. The court can also limit the fees charged by the expert witness for their work.

Instances in which pre-action rules are not applicable:

The court expects parties to act in accordance with the relevant pre-action protocols or the Pre-Action Practice Direction. It will consider non-compliance when managing proceedings and awarding costs.

Notwithstanding the above, in certain situations, it may be appropriate to begin court proceedings without fully adhering to the protocol, for example:

• Near the limitation period: If the time limit for filing a claim is close, the claimant may need to initiate proceedings to avoid the claim becoming time-barred.
• To preserve evidence or assets: If there is a risk that evidence or assets could be lost or destroyed, it is imperative to act fast and apply to the court to seek an appropriate remedy. In such circumstances, there may simply not be enough time to comply with the protocol and/or compliance with the pre-action rules would put the party on notice and defeat the purpose of the application (i.e. application for a freezing injunction). 

The court is typically lenient about minor or technical breaches and assesses compliance with reference to the principle of proportionality. 

Consequences of non-compliance may include:

• The non-compliant party is being ordered to pay part of the costs of the other party or parties, or the costs of the proceedings
• In some cases, the claimant may be deprived of interest or have the rate of interest reduced if they are the non-compliant party. The court may also issue a stay of proceedings to allow compliance with the protocol. A stay imposes a halt on the conduct of the proceedings to either a part or the whole of a claim. 

Alternative Dispute Resolution

Alternative Dispute Resolution (“ADR”) is a key feature of the Pre-Action Practice Direction under the Civil Procedure Rules in England and Wales; thus, it is important to consider carefully whether the dispute can be resolved out of court.

Paragraph 10 of the Practice Direction states that:

Parties may negotiate to settle a dispute or may use a form of ADR, including –

1. mediation, a third party facilitating a resolution;
2. arbitration, a third party deciding the dispute;
3. early neutral evaluation, a third party giving an informed opinion on the dispute; and
4. Ombudsmen schemes

Litigation should be the last resort, and the court strongly encourages ADR before parties start formal litigation in order to save time and costs.

Conclusion

The pre-action protocol serves as a critical tool in civil disputes, promoting settlement and reducing the need for litigation. It encourages early communication, the sharing of information, and the exploration of alternative methods like ADR. Compliance is vital, as failure to follow the protocol can result in adverse cost consequences and penalties. By adhering to these guidelines, parties can avoid unnecessary cost proceedings, therefore allowing them to save costs and potentially resolve disputes amicably.