The new Pre-Action Protocol for Construction and Engineering Disputes
The Pre-Action Protocol for Construction and Engineering Disputes was updated last year, and the new version came into force in November 2016. One might think I was somewhat late to the party by writing about it here in February 2017, but actually the Ministry of Justice itself still hasn’t updated its website with the new version, so I’m still one step ahead of the curve in that regard at least.
By way of reminder, the Protocol applies to all construction disputes and is to be used by parties before issuing court proceedings. It doesn’t apply to adjudication proceedings, those involving an injunction or anything that would be the subject of a summary judgment application.
The old Protocol was creating quite a frustratingly drawn out process, giving parties in whose interests it was to drag out cases and push up costs a bit of a sharper tool. Although the changes on the face of it seem relatively subtle, they are really very helpful in practice. I’ve already managed to get a letter of claim out pursuant to the Protocol which is less than 4 pages long, which would probably have been unheard of under the previous requirements.
For a start, the nature of the use of the Protocol has changed. Parties are able to contract out of it if they wish (whereas it was previously compulsory), which gives a little more flexibility. Moreover, it is no longer the case that parties are at risk of a costs order unless the breach is minor only. Now, costs consequences will only be imposed when there has been “flagrant or very significant disregard” for the Protocol.
Whilst on the one hand parties are able to contract out of the Protocol, combined with the more laissez faire approach taken by the court, parties can also contract in to have a Protocol referee using the procedure set out by TeCSA and TECBAR. Both parties will have to agree, though.
The key reason my letter of claim was much shorter than it might have been is the removal of a requirement for “a clear summary of the facts” and “the basis on which each claim is made”, replaced instead with “a brief summary of the claim or claims”. That might seem semantic from initial reading, but it’s really quite significant. Construction disputes can stand or fall on the basis of quite detailed and lengthy factual provisions, and if all that is required is a brief summary, that can vastly reduce the cost of the proceedings, and the opponent can still see what case has to be answered.
In turn, the opponent only has to provide a “brief and proportionate” summary in response, rather than full details of the facts that are agreed and not agreed. The response must be provided within 28 days, as before, but parties can now only agree an additional extension of 28 days, which eliminates what was happening in practice, which was defendants routinely requesting 3 months even if not required.
Thereafter, the parties are to meet within 21 days, rather than 28, and that can take the form of mediation if they wish. That is really quite helpful. I have had disputes in the past where vast sums of money have been expended on attending a pre-action meeting, and all that is decided at the meeting is that the parties should attend mediation. It’s better to be able to go straight there.
I certainly like the new Protocol, and am pleased that the pre-action phase can be somewhat more proportionate. Hopefully there will be less tactical abuse of this process and disputes can be resolved quicker and at lower cost.