Another review of the Pre-Action Protocol for Construction and Engineering Disputes

This article was produced by Olswang LLP, which joined with CMS on 1 May 2017.

Lord Justice Jackson’s report into the costs of civil litigation may lead in future to significant changes in the way parties in construction disputes conduct litigation. At present the Pre-Action Protocol for Construction and Engineering Disputes (the “Protocol“) must be complied with before proceedings are issued. However, a TCC working party is currently reviewing the Protocol in light of Lord Justice Jackson’s conclusion that the current process requires parties to construction disputes to effectively front load their costs.

The Protocol was last reviewed in April 2007. Although some changes were introduced, ideas canvassed to prevent abuse of the process were not implemented (for example, limiting the parties’ Protocol costs and possible Court involvement where there was a lack of co-operation).

Opinion amongst legal professionals as to the efficacy of the Protocol is split. In our opinion there can be no doubt that the Protocol requires parties to front load their costs to a degree and it is true that Protocol letters of claim sometimes mirror particulars of claim when issued. However, in general, the Protocol achieves its aim to resolve disputes before the parties need to trouble the TCC.

It may be that the Protocol could be amended so that the letter of claim is not required to be as detailed or prescriptive, which would in turn reduce costs, but abolishing the Protocol would almost certainly lead to more disputes ending up in court. The Protocol process should be as simple and practical as possible bearing in mind the legal, technical and factual issues of the particular dispute. So long as the parties (and their solicitors) are encouraged to ensure that the process is proportionate to the size and scope of the claim, then the ultimate aim of reducing costs and staying away from the TCC should be achieved.

The real difficulty with the Protocol is policing it: unless proceedings are ultimately issued allowing the Court to consider the question of compliance and to impose sanctions where appropriate, the Protocol is open to abuse. We await with interest the results of the TCC review and hope that the missed opportunities of the last review will not be repeated.