Pre-action Conduct and Protocols

Court action is a last resort. The parties to a dispute are expected to try and resolve it themselves before a claim is issued. 

The Courts have introduced several pre-action procedures called pre-action protocols that are to be followed by both parties with a view to settling a case without the need to bring a claim. The pre-action protocols lay down specific procedures for certain categories of case.

Where a specific pre-action protocol does not apply, the parties will still be expected to co-operate with each other in exchanging information to put them in the best position to consider the merits of their case and whether other steps should be taken to settle their dispute without a claim being brought.

Compliance with the pre-action protocols requires the parties to gather a large part of the evidence upon which they will rely at the pre-action stage of the case. Civil litigation cases are therefore said to be front loaded which simply means that a lot of work must be undertaken before a claim is issued to gather and analyse the evidence that will be necessary for a party to prove their case (or disprove the case of their opponents), with a view to achieving early settlement. The gathering and collation of relevant evidence is a fundamental element of the claim that in most cases should be dealt with substantially before a claim is issued.

A pre-action protocol has several purposes

  • To focus the attention of litigants on the desirability of resolving disputes about litigation;
  • To enable them to obtain information they reasonably need in order to enter an appropriate settlement;
  • To make an appropriate offer (of a kind which can have cost consequences if litigation ensues)

If pre-action settlement is not achievable, to lay the ground for expeditious conduct of proceedings.

At present there are several formal pre-action protocols in force and these set out a specific procedure that should be followed in all cases to which they apply.

In cases where no form of pre-action protocol is in place, a court would still expect the parties to act reasonably towards each other in exchanging information and considering early settlement with a view to avoiding litigation. The practice direction on pre-action conduct under the Civil Procedure Rules 1998  provides guidance to what the courts will consider to be good practice to be adopted at the initial stages of the case. PRADPAC sets out how the court expects both parties to conduct themselves in accordance with the overriding objective of the Civil Procedure Rules.

Where no formal pre-action protocol applies, the approach to all disputes should be as follows:

  • The Claimant should write a reasonably detailed and self-contained letter of claim enclosing copies of essential documents and asking for those in the Defendants possession.
  •  The Claimant should set a reasonable timescale within the terms of the letter for the Defendant to admit or deny liability and for many claims a 1 month period is suggested as a reasonable time.
  •  The Defendant should acknowledge the letter within 21 days and should reply within the suggested timescale if at all possible or, as a minimum, explain the steps that are being taken to look into the matter and when a full reply is likely to be possible.
  • If the Defendants reply accepts the claim, it should acknowledge this and make proposals for settlement. If the claim is disputed then the Defendant should explain the reason why and enclose any essential documents that will be necessary to support this.
  • Both parties should reply to the others reasonable requests for further information.

Both parties should show a willingness to consider a settlement including any mediation or other form of Alternative Dispute Resolution (ADR).

What is considered to be reasonable conduct will vary depending on the nature of the case but the approach set out above should be regarded as a good start point for reasonableness.

Compliance with pre-action protocols and the practice direction

The court may consider the parties compliance or non-compliance with the pre-action protocols when it gives directions for the management of a case and, importantly, when it is considering costs orders.

Under the general costs rule set out in part 44 of the CPR, the court may take into account the conduct of the parties before as well as during court proceedings and in particular the extent to which the parties followed any relevant pre-action protocol in making any costs order it considers appropriate.

The pre-action protocols are, however, a guide and what is a reasonable procedure to follow will differ according to the case under consideration. For example, more co-operation and pre-action exchanges of information are likely to be necessary in a complex case with a long history and a great deal of evidence than they would be in a very simple claim where the facts are easily ascertained with the important thing to note that if the parties cannot show that they have behaved reasonably in relation to pre-action conduct in trying to settle the claim, the court may impose a costs sanction. 

In other words, if the failure to comply with a protocol or practice direction leads to a claim being commenced that would otherwise not have been necessary, or to costs being incurred which would otherwise not have been incurred, then the court is empowered to put the innocent party into the position they would have been in if the protocol had been complied with.

The court is therefore empowered to make the following orders:

  • the party at fault pays all or part of the costs of the proceedings to date
  • the party at fault pays costs on an indemnity basis
  • if the party at fault is the Claimant, the court may deprive the Claimant of some or all of the interest on damages or may apply a reduced rate of interest
  • if the party at fault is the Defendant and damages are being awarded, the court may require the Defendant to pay additional interest of up to 10% above the relevant base rate

The court does have other wide ranging powers to address non-compliance which can include further cost penalties but also might include giving one party additional time or result in the staying of proceedings until the protocol procedure has been completed.

At key stages of the case, the parties are both asked to confirm whether they have complied with any relevant pre-action protocol and whilst this may not have any immediate consequences during the life of the case, it is a factor to be considered at the end of the case if the court is being asked to decide any questions related to costs.

If you would like any more advice regarding this please contact us today.

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