Reducing Pre-Action Costs? New Construction and Engineering Pre-action protocol released tomorrow.

The new Construction and Engineering Protocol will come into effect on 9 November 2016 following a joint collaboration between TecBar and TecSA with the assistance of Mr Justice Coulson.

The focus of the changes seems to be to reduce pre-action costs and speed up the pre-action procedure.

The key points that everyone should be aware of:

  • Parties can agree to waive the protocol so long as all parties agree in writing;
  • The protocol now expressly states that for modest value cases (not solely those in the County Court although not set monetary limit is provided) the Letter of Claim (“LOC”) and response can be simple to keep down costs;
  • The LOC should be a brief summary of the claim setting out the contractual/statutory provisions relied on with a summary of the relief claimed;
  • To avoid appending huge unnecessary experts reports to a LOC, the protocol expressly states that you are not expected to provide reports with the LOC but can do only if they are succinct, central to the claim and helpful;
  • To hammer home the new proportionate nature of the protocol, the standard of a party in noncompliance has been set at those with a “flagrant or very significant disregard” of the protocol;
  • The obligation for a pre-action without prejudice meeting has been watered down and the wording now refers to the parties usually having met on at least one occasion. If the meeting does go ahead it should be within 21 days rather than the current 28 days;
  • The time frames have been reduced so that  Defendant has 21 days to provide a letter of response (down from 28 days) and this can only be extended by 28 days (i.e. up to two months to respond down from the current three months); and
  • The biggest addition) is the introduction of a “Protocol Referee Procedure”. This is a voluntary option (it can be offered in the LOC and accepted in the response) and provides for a Protocol Referee to make decisions referred to him on whether the other party is correctly participating and complying with the Protocol for a set fee of £3,500 plus vat. The Protocol Referee’s decision will be binding until finally determined. Whether this introduction becomes common place is yet to be seen.

All in all the new protocol will (1) allow parties to opt out (2) create a quicker, less detailed and more proportionate protocol period and (3) introduce a Protocol Referee.

The new changes, on the whole, seem like a welcome clarification to the pre-action procedure and should go some way to minimising costs before litigation or ADR begins.

Should you wish to discuss the changes further please contact Michael WellsAsif Patel or Simone Protheroe.



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