Building and Construction Law Pre-Action Protocols
Robert Fenwick Elliott, Barrister
Notes for Civil Litigation Reform: Advocating for the Woolf at the Door – Session 3
Friday 25th July 2014
A series of pre-action protocols was set up in England & Wales from 1999 as part of the Woolf Reforms. In his Report “Access to Justice” Lord Woolf said that they were
intended to build and increase the benefits of early but well informed settlements which genuinely satisfy both parties to a dispute…The purpose of such protocols are:
to focus the attention of litigants on the desirability of resolving disputes without litigation;
to enable them to obtain the information they reasonably need in order to enter into an appropriate settlement; or
to make an appropriate offer (of a kind which can have cost consequences if litigation ensues); and
if a pre-action settlement is not achievable, to lay the ground for expeditious conduct of proceedings.
This is part of Lord Woolf’s approach that litigation should be avoided wherever possible – it should be viewed as a last resort.
The set of protocols in England & Wales is currently as follows:
- Personal Injury 26 April 1999
- Clinical Negligence 26 April 1999
- Construction and Engineering Disputes 2 October 2000
- Defamation 2 October 2000
- Professional Negligence 16 July 2001
- Judicial Review 4 March 2002
- Disease and Illness 8th December 2003
- Housing Disrepair 8th December 2003
- Possession claims based on rent arrears 2nd October 2006
- Possession claims based on mortgage arrears 19 November 2008
At the invitation of the Vice-Chancellor, the first draft of The Construction and Engineering Disputes Pre-Action Protocol was prepared by the Technology and Construction Solicitors Association. Uniquely among the protocols, it provided for a pre-action meeting. This idea was not universally welcomed. Insurers in particular disliked the idea that they would have to meet claimants. Nevertheless, it was introduced in 2000 and revised in 2007.
The bare bones of the protocol were (and are) as follows:
- Before commencing proceedings, the plaintiff sends a letter identifying why it thinks the defendant should meet the claim; 
- The defendant then sends a letter identifying why it has not met the claim; 
- There is then a meeting between the parties and the lawyers. The purpose of the meeting is to identify the main issues, and to see whether those issues might be resolved without litigation. It does this chiefly by the lawyers identifying the likely cost and time of litigation, and canvassing whether some alternative approach might be more sensible;
- There is a philosophy of both carrot and stick:
- The mere process of getting the parties and their lawyers into a room and getting them to talk about likely costs and procedures often opens the door to a constructive dialogue that is otherwise absent, such that many cases settle on the spot
- A party which refuses to engage in the process may be penalised in a stay and/or costs in subsequent litigation. 
In 2003, Caroline Cummins reported on the feedback from an early questionnaire into the way the protocol was working.
The overwhelming response to the questionnaire is that claims are settling earlier and that the Protocol is assisting with this because it provides parties with a framework within which they can understand the nature of claims and defences better and explore settlements earlier than was hitherto the case … it is clear that the Protocol is, in general, working well in practice and has played a part in encouraging parties to settle their disputes before commencing proceedings.
The questionnaire did highlight some areas where the Protocol is open to abuse or where dissatisfaction has been expressed. These areas are mentioned in more detail above but the questions arising may be summarised as follows:
- there is disagreement between practitioners over the amount of detail required in the letter of claim and response which leads to unnecessary conflict and tactical positioning. Should more guidance be given to practitioners about this (although the answer may come down to a question of what the particular case involves and the nature of the issues)?
- There is evidence of claimants initiating a speculative claim in the hope that the Protocol will lead to ADR or settlement without the need for them to prove their case. This is causing defendants to expend costs without any right of objection or recovery. Should defendants have some protection where claims are withdrawn before litigation commences?
- Should key documents be issued automatically with the letter of claim and response?
- Should the Protocol be more proactive about providing for mediation?
- Should the costs of complying with the Protocol be recoverable?
- Users comment that Judges seldom enquire about compliance with the Protocol at CMCs. Should Judges make full enquiries and apply sanctions for non compliance? Or should parties be entitled to dispense with the Protocol if that is their joint preference?
In 2009, Lord Justice Jackson delivered his Final Report as part of the Review of Civil Litigation Costs. See Attachment 2. Despite noting some opposition, Lord Jackson recommendation was that the construction and engineering protocol be retained, and it has been.
In 2011, the Technology & Construction Solicitors Association conducted a survey of view about the pre-action protocol; there were 172 responses, made up as follows:
Construction Professionals 29
None of the above 7
The key findings were:
88% or 147 respondents had experience of using the Protocol;
77% or 110 respondents said they found the Protocol useful;
47% or 67 respondents said the Protocol should be retained substantially in its current form;
11% or 16 respondents said it should be abolished altogether, and
42% or 60 respondents said it should be amended in some way.
The key amendment required was to prevent the amount of cost being spent on pre-action protocol compliance becoming disproportionate – something addressed in the South Australian version.
TeCSA comment as follows on their website:
The respondents who said that they found the Protocol useful commented that the Protocol provided a framework for the early identification, clarification and narrowing of issues between the parties, which saved time and cost. They also referred to the Protocol encouraging early assessment of the merits of claims, which could lead to resolution and early settlement, structured dialogue prior to formal proceedings or a launch pad for ADR. Some respondents commented that the Protocol focused the parties’ attention on the issue of fees early on, which was often a reason for inability to settle at a later stage. Early exchange of expert evidence was considered helpful in assessing the merits of a claim.
Those respondents who did not find the Protocol useful (and even some of those who considered, overall, that it was useful) pointed to abuse of the Protocol by some parties, in particular through delaying tactics and deliberate building of costs. This can lead to some meritorious cases settling on poorer terms than would otherwise seem justified. Respondents also referred to excessive delay and the increase in and duplication of costs as a result of the Protocol, and disproportionate and excessive front loading of costs. One respondent said the Protocol was a disincentive to foreign litigants using the TCC. TeCSA has seen little evidence of this but could, we suppose, treat foreign litigant cases as an exception? But do we really want to go back to the days of the “14 day letter”, which often demanded payment on the basis of a few paragraphs and which routinely led to litigation?
The South Australian protocol is to be found in the Supreme Court Civil Supplementary Rules 2014 rr 8 to 21; it follows the general form of the English model, but applies the lessons learnt from that experience, particularly in seeking to ensure that the costs of compliance with the protocol do not become disproportionate. Its form was substantially settled by a committee chaired by Master Blumberg in 2013.
These new rules will apply to actions commenced from 1 January 2015. The pre-action process will generally take about 3 months (although it can of course be quicker if the parties get on with it)
|Claimant prepares letter of claim||14 days (say)|
|Time for respondent to reply||21 days (r18(1))|
|Time for claimant to respond to any counterclaim||14 days (r19)|
|Time allowed for meeting||30 days (r 20(1)|
|? Further meeting||7 days (say, r 20(1))|
|Total||About 3 months|
And so in practice, claimants who want to bring claims in the last quarter of this calendar year will have a choice:
- Go through the process, which should produce advantages in terms of avoiding unnecessary litigation cost, or
- Just issue proceedings, which might be short term quicker and cheaper, but long term slower and more expensive.
There is now a body of case law showing how the courts in England & Wales have treated the protocol there – this is summarised in the extract from my book at Attachment 3.
Attachment 1 – Extracts from Supreme Court Civil Supplementary Rules 2014
…(2) In these Supplementary Rules, unless the contrary intention appears—
construction dispute – see supplementary rule 10;
(2) Unless the Court otherwise orders, Chapter 3 Part 2 applies to actions commenced on or after 1 January 2015.
Construction Disputes and Medical Negligence Disputes are excluded from rule 33 of the Rules and are governed instead by this Division.
The objectives of this Division are to –
(a) encourage parties to resolve a claim before commencing proceedings;
(b) enable litigation (if unavoidable) to proceed on a reasonable timetable, at a proportionate cost and to limit the matters in contention when resolution is not achieved; and
(c) involve insurers at an early stage.
In this Division—
construction dispute means a building, construction or engineering dispute whether involving a monetary claim or otherwise and includes a professional negligence claim against a construction expert architect, engineer, quantity surveyor, building consultant or like expert;
construction expert means a building, construction or engineering expert and includes an architect, engineer, quantity surveyor and building consultant;
(1) A party is excused from complying with the relevant subdivision before commencing an action if—
(a) urgent relief is to be sought in an action;
(b) a freezing order is to be sought in an action; or
(c) a claim is about to become time-barred or adversely affected by passage of time;
and complying with subdivision 2 or 3 would prejudice the claimant.
(2) If the respondent fails to send a letter of response in breach of supplementary rule 18 or 26 or fails to attend a pre-action meeting in breach of supplementary rule 20 or 27, the claimant is excused from further compliance with the relevant subdivision before commencing an action.
In these events, supplementary rule 31(3) entitles a party to file an interlocutory application for directions as to what procedure should be taken in lieu of compliance with the relevant subdivision.
(1) This Division is not to be used as a tactical device to secure advantage for one party, delay the commencement of proceedings, or generate avoidable costs.
(2) The extent of the steps required to be taken under this Division and which would not otherwise be undertaken is limited to ensuring that the time and costs incurred is proportional to the amount or value in dispute.
(3) It is likely to be disproportionate for a party, in compliance with this Division, to incur more than 5% of the estimated cost of a fully contested litigation including trial.
(4) The Court may take into account the extent of the parties’ compliance with this Division when giving directions for the management of proceedings and when making orders about who should pay costs.
(5) The Court will expect the parties to have complied with this Division. The Court may ask the parties to explain what steps were taken to comply before the start of the claim. When a party fails to comply, the Court may ask that party to explain.
(6) When considering compliance, the Court will—
(a) be concerned with substantial compliance and not minor departures;
(b) not regard minor departures as exempting the other party from compliance;
(c) take into account the need for proportionality; and
(d) take into account any unavoidable urgency.
When a time period is prescribed by subdivision 2 or 3, the time period may be altered by the consent of all parties.
The costs incurred by the parties in compliance with subdivision 2 or 3 will be treated as costs incurred in the conduct of litigation of issues identified in the letter of claim, but not insofar as such costs relate to issues not subsequently litigated.
The communications between the parties and documents created by the parties in compliance with this Division—
(a) are required to be disclosed to the Court when required by this Division or when an order is made by the Court for such disclosure for the purpose of making procedural directions or costs orders;
(b) are not to be disclosed to the Court at trial or at the hearing of a substantive issue.
(1) This subdivision applies to all construction disputes in respect of which an action is subsequently commenced in the Court.
(2) A claimant is not required to comply with this subdivision if—
(a) the proposed action is to enforce a binding determination enforceable between the parties as such, including (without limitation) a decision of an adjudicator under section 22 of the Building and Construction Industry (Security of Payment) Act 2009 or an arbitrator under section 35 of the Commercial Arbitration Act 2011;
(b) the proposed action is for payment of a claimed amount under section 15(2)(a)(i) of the Building and Construction Industry (Security of Payment) Act 2009; or
(c) the dispute has been or will be the subject of a dispute resolution procedure to similar effect to that prescribed by this subdivision.
- Before commencing an action, the claimant or the claimant’s solicitor is to send to the respondent or the respondent’s insurer a letter of claim.
- The letter of claim is to—
(a) give the full name and address of the claimant;
(b) give the full name and address of each proposed defendant;
(c) identify the basis on which the claims are made, including the principal contractual term and/or statutory provision relied on;
(d) identify the nature of each separate claim and the brief facts supporting each claim;
(e) identify the nature and extent of the relief claimed— if damages are claimed, a breakdown showing how the damages are quantified; if a liquidated sum is claimed, how it is calculated; if an extension of time is claimed, the period claimed and basis for the extension claim;
(f) attach a copy of any report obtained from an expert on whose evidence the claimant intends to rely;
(g) estimate the total costs likely to be incurred by the claimant in a contested trial;
(h) make an offer to resolve the dispute; and
(i) propose a date and venue for the pre-action meeting (referred to in supplementary rule 20) if the offer is not accepted.
(1) Within 21 days after receipt of the letter of claim, if the respondent does not accept the offer, the respondent is to send a letter of response.
(2) The letter of response is to—
(a) identify the basis of any dispute concerning the contractual or statutory basis of the claims;
(b) identify which claims are accepted and which are rejected, and, if rejected, the basis of the rejection including any dispute as to the factual basis relied on by the claimant;
(c) identify any special defence to a claim, including the expiration of any relevant time limit or the making of any binding decision in relation to the claim;
(d) if a claim is accepted in whole or in part, identify whether the damages, amounts claimed or extensions of time claimed are accepted or rejected, and, if rejected, the basis of the rejection;
(e) if contributory negligence is alleged against the claimant, summarise the facts relied on;
(f) if the respondent intends to make a counterclaim, give the information that is required by supplementary rule 17 to be given in a letter of claim;
(g) attach a copy of any report obtained from an expert on whose evidence the proposed defendant intends to rely;
(h) estimate the total costs likely to be incurred by the proposed defendant in a contested trial;
(i) make an offer to resolve the dispute; and
(j) respond to the date and venue for the proposed pre-action meeting if the counter offer is not accepted.
(3) If a respondent intends to object to all or any part of the claimant’s claim on the ground that—
(a) the Court lacks jurisdiction;
(b) the matter is required to be referred to arbitration or determined otherwise than by action in the Court;
(c) a step is required to be taken before the institution of proceedings; or
(d) the proposed defendant named in the letter of claim is the wrong defendant;
the respondent is to identify the parts of the claim to which the objection relates, set out the ground relied on, and, where applicable, identify the correct defendant (if known).
(4) Any failure to make an objection will not prejudice the proposed defendant’s rights to do so in any subsequent action, but the Court may take such failure into account on the issue of costs at any stage of the action.
The claimant is to provide a response to any notice of intended counterclaim by the respondent within 14 days of receipt of the letter of response.
(1) If the dispute has not been resolved, within 30 days after receipt of the letter of response or of the claimant’s letter of response to a counterclaim (whichever is later), the parties are to meet to—
(a) agree what are the main issues in dispute and identify the root cause of disagreement in respect of each issue;
(b) consider whether, and if so how, the issues might be resolved without recourse to litigation; and
(c) consider, if litigation is unavoidable, what steps should be taken to ensure that it is conducted as expeditiously and efficiently as possible in accordance with the overriding objectives prescribed in rules 10 and 113 to 116 of the Rules.
In some circumstances, it may be necessary to convene more than one meeting.
(2) During the meeting, the lawyers for the parties are to endeavour to reach a consensus in the presence of the parties as to the likely legal cost and timescale of each of litigation and any appropriate alternative dispute resolution procedure.
(3) In cases in which the parties or their solicitors anticipate difficulty in achieving the aims of the pre-action meeting, the parties should consider appointing at their joint cost an independent person to chair the meeting. In the interests of proportionality of cost, such independent person should not ordinarily be expected to do any extensive reading or preparation before the meeting.
(4) The meeting should be attended by—
(a) each party or a representative of the party (including an insurer) having authority to resolve the dispute;
(b) a legal representative of each party (if one has been instructed); and
(c) when a claim is made or defended on behalf of some other party (such as, for example, a claim made by a main contractor pursuant to a contractual obligation to pass on subcontractor claims), the party on whose behalf the claim is made or defended and/or that party’s legal representative.
(5) In respect of each issue in dispute, or the dispute as a whole, the parties should consider whether some form of alternative dispute resolution would be more suitable than litigation, and if so, endeavour to agree which form to adopt.
(6) If the parties are unable to agree on a means of resolving the dispute other than by litigation, they are to use their best endeavours to agree—
(a) if expert evidence is likely to be required, how the relevant issues are to be defined and how expert evidence is to be dealt with including whether a joint expert might be appointed, and if so, who that should be;
(b) the extent of disclosure of documents with a view to saving costs; and
(c) the conduct of the litigation with the aim of minimising cost and delay.
If the parties do not resolve the dispute at the pre-action meeting, any party may institute an action in accordance with supplementary rule 29.
(1) When an action to which this Division applies is commenced, the plaintiff must file a memorandum concerning compliance in form 3 stating that—
- the parties have substantially complied with this Division;
- the plaintiff has substantially complied with this Division to the extent able but the defendant has not;
- the plaintiff has commenced the action without substantially complying with this Division due to urgency under supplementary rule 11; or
- the plaintiff has not substantially complied with this Division.
(2) When an action to which this Division applies is commenced, the plaintiff is to file with the memorandum a copy of the letter of claim and letter of response. These documents will be filed in a suppressed file.
(1) When there has been substantial compliance with this Division, rules 130 to 130B of the Rules do not apply to the action.
(2) Such an action will proceed directly to a directions hearing without the need for a settlement conference.
(3) Despite paragraph (2), the Court may if it thinks fit order that the parties attend a settlement conference.
(1) When for any reason there has not been substantial compliance with this Division (due to default by any party or because a plaintiff was excused from compliance under supplementary rule 11 or otherwise), the provisions of this rule apply.
(2) Unless the parties unanimously agree or the Court otherwise orders, rules 130 to 130B of the Rules apply to the action
(3) Any party not in default (including a plaintiff excused from compliance) may apply for directions under rule 126 of the Rules.
(4) Unless the Court otherwise orders, any such application must be made by a plaintiff within 7 days after commencement of the action and by a defendant within 7 days after being served with the originating process.
(5) If a defendant files an application under subrule (3) within 7 days after being served with the originating process on the ground of default by the plaintiff, the defendant is not required to file a defence until directions are given on the application.
(6) Upon receipt of an application for directions under this rule, the Registrar will convene a preliminary hearing to consider what directions, if any, should be given for steps to be taken in lieu of compliance with this Division.
(1) At a preliminary hearing if convened, the Court will consider the consequences of any non-compliance with this Division.
(2) The Court may have regard to the contents of the suppressed file and to information provided by the parties or required by the Court to be provided concerning non-compliance.
(3) If the plaintiff was excused under supplementary rule 11 from compliance with subdivision 2 or 3, the Court may give such directions as it thinks fit as to steps to be taken by the parties in lieu thereof which may include a stay of the action pending the taking of those steps.
(4) If the plaintiff failed to comply substantially with subdivision 2 or 3 as applicable—
(a) the Court may stay the action and/or give directions as it thinks fit as to steps to be taken by the parties in lieu of compliance with the relevant subdivision;
(b) unless there is good reason not to do so, the Court will order that the plaintiff pay the other party’s costs incurred due to the failure by the plaintiff to comply, which will be fixed by the Court in a lump sum;
(c) unless it would stultify the action, the Court will order that the costs be payable immediately.
(5) If the defendant failed to comply substantially with subdivision 2 or 3 as applicable—
(a) the Court may stay the action and/or give such directions as it thinks fit as to steps to be taken by the parties in lieu of compliance with the relevant subdivision;
(b) unless there is good reason not to do so, the Court will order that the defendant pay the other party’s costs incurred due to the failure by the defendant to comply, which will be fixed by the Court in a lump sum;
(c) unless it would stultify the defence, the Court will order that the costs be payable immediately.
(1) If no preliminary hearing is convened, at the initial directions hearing, on application by a party, the Court will consider the consequences of any default in compliance with this Division.
(2) The Court may have regard to the contents of the suppressed file and to information provided by the parties or required by the Court to be provided concerning non-compliance.
(3) If a plaintiff failed to comply substantially with subdivision 2 or 3 as applicable—
(a) unless there is good reason not to do so, the Court will order that the plaintiff pay the other parties’ costs incurred due to the default by the plaintiff, which will be fixed by the Court in a lump sum;
(b) unless it would stultify the action, the Court will order that the costs be payable immediately.
(4) If a defendant failed to comply substantially with subdivision 2 or 3 as applicable—
(a) unless there is good reason not to do so, the Court will order that the defendant pay the other parties’ costs incurred due to the default by the defendant, which will be fixed by the Court in a lump sum;
(b) unless it would stultify the defence, the Court will order that the costs be payable immediately.
(5) The Court will take into account the steps taken by the parties before institution of the action when giving directions for the progress of the action.
(6) If a party does not allege default in compliance with this Division by another party at the initial directions hearing, the Court will not subsequently apply sanctions against the defaulting party unless the complying party was not aware of the default.
(1) If non-compliance with this Division becomes apparent after the initial directions hearing, the Court may make remedial orders and/or impose sanctions for the non-compliance if the non-compliance was substantial and has a substantial prejudicial effect upon another party.
Failure to disclose an expert report, documents or information required by this Division to be disclosed.
(2) The remedial orders or sanctions that the Court may impose include –
(a) directing a defaulting party to take steps to remedy the default;
(b) staying the action;
(c) making an order that the defaulting party pay the costs of another party incurred due to the default, which may be on an indemnity basis and payable immediately.
Attachment 2 – Extracts from Review of Civil Litigation Costs: Final Report
December 2009 (The Jackson Report)
CHAPTER 35. PRE-ACTION PROTOCOLS
The relevant protocol
- Construction litigation is subject to one of the specific protocols, namely the Pre-Action Protocol for Construction and Engineering Disputes (referred to in this section as the “protocol”). The protocol came into force in October 2000. It was revised with effect from April 2007 in accordance with the recommendations of a working party. That working party was chaired by Mr Justice Ramsey, who is now the judge in charge of the Technology and Construction Court (the “TCC”).
- TCC judges. The TCC High Court judges (the “TCC judges”) state in their submission:
Views expressed during Phase 2
“There is a widespread view that the Pre-Action Protocol can often be a waste of time and costs. Those costs can often be substantial, running into many and sometimes hundreds of thousands of pounds. The steps taken during that process can often be duplicative; for instance, the letter of claim will mirror (but in less detail) the Particulars of Claim.”
The TCC judges go on to suggest that, if the protocol is to be retained, the steps required by the protocol should be taken after issue of proceedings, during a period when the action is stayed. This would have the advantage that the assigned judge could oversee the process and give any necessary directions. This proposal was first raised during Phase 1 and is referred to in PR paragraph 34.4.3.
- The Technology and Construction Bar Association (“TECBAR”) states as follows in its Phase 2 submission:
“The unanimous view of the TECBAR committee and the respondents to the survey referred to above was that PAP substantially and unnecessarily increases costs. It is now commonplace to see very detailed letters of claim supported by voluminous appendices, and equally detailed letters of response, which, in the event that the meeting between the parties does not result in a settlement, are then reproduced and often elaborated as pleadings. It was also the unanimous view of the committee and respondents that the formal PAP should be abolished, and replaced with a more informal process which is limited to a summary letter of claim, a summary letter of response and a meeting.”
- Construction solicitors. The views of construction solicitors have been made clear during the Phase 2 meetings and seminars, and also in the written submissions of the Technology and Construction Solicitors Association (“TeCSA”). Construction solicitors take a different view from their colleagues at the Bar. They believe that the protocol procedures, when followed sensibly, promote early settlements and lead to saving of costs. TeCSA states in its written submissions:
“Although opinion is divided on the most effective means of dealing with these issues, the majority view is that the Protocol procedure should remain pre-action. It has been suggested that issues of non-compliance could be eliminated by clear judicial guidance, as and when the opportunity arises, as to what constitutes proper compliance, although it is recognised that much will depend on the facts of individual cases; but guidelines would emerge from a body of case law. An alternative suggestion which attracts general approval is that there might be a change of the rules in order to confer jurisdiction on the TCC to deal with applications in respect of compliance with the Protocol prior to the issue of the claim form.”
- King’s College conference. On 9th July 2009 I attended a conference of construction experts and solicitors, where the protocol was one of the issues debated. There was strong opposition to the idea that the protocol processes should be carried out post-issue. The majority of delegates favoured a reform whereby applications could be made to the court for directions during the protocol process, if matters were going awry. In other words these would be pre-action applications similar to the preaction applications for disclosure which already exist.
The threshold question.
- The threshold question, which emerges from the debates during Phase 2, is whether the protocol procedure should be
- converted into a post-action process or
- retained as a pre-action process.
- Having considered the submissions and arguments advanced during Phase 2 (and also drawing upon my own experience as a former TCC judge) I conclude that for the time being the protocol procedure should be retained as a pre-action process. However, a number of steps should be taken in order to address the concerns which have been raised.
My conclusion on the threshold question
Steps necessary to address concerns
- Controlling undue front loading of costs
- The proportionality provision. Paragraph 1.5 of the protocol provides:
“In all cases the costs incurred at the Protocol stage should be proportionate to the complexity of the case and the amount of money which is at stake. The Protocol does not impose a requirement on the parties to marshal and disclose all the supporting details and evidence that may ultimately be required if the case proceeds to litigation.”
This provision is repeated in paragraph 2.1.3 of the TCC Guide.
- Non-compliance. It is clear from the submissions of TECBAR and from other submissions received that the proportionality provision is often honoured in the breach.
- Consideration should be given to strengthening the wording of the proportionality provision. Consideration should also be given to making paragraph 3 (re letter of claim) and paragraph 4 (re letter of response) of the protocol less prescriptive. It should be made clear in the protocol that the claim letter should not annex or reproduce a draft pleading and that expert reports should not normally be served at the protocol stage. Documents should not be annexed to the claim letter or the response letter, unless there is good reason to do so. Documents in the possession of both sides should not be supplied.
- Costs penalty. As the law now stands, the costs incurred by each party during the protocol process may, in principle, be recovered as costs incidental to the litigation: see Roundstone Nurseries Ltd v Stephenson Holdings Ltd  EWHC 1431 (TCC) at  – . I recommend that it should be provided that, in so far as a party has gone beyond the requirements of the protocol, the costs of those excessive labours shall not be recoverable. The costs estimates lodged by both parties before the first case management conference (“CMC”) should expressly state what costs have been incurred in complying with the protocol. If it is found that either party has gone substantially beyond the requirements of the protocol, the judge should so certify at the first CMC and should decide the amount of costs to be disallowed.
- I appreciate that this recommendation, if accepted, will impose a substantial additional burden upon TCC judges. On the other hand, it is to be hoped that a few robust judicial decisions will rapidly have the desired effect upon pre-action behaviour, thus reducing the need for cost disallowance applications. Furthermore where one or both parties run up excessive costs in the pre-action period, it must be hoped that the solicitors will be able to agree what costs should be disallowed. At the moment, I can see no other way of controlling the excesses of which complaint is made.
- Provision for protocol applications
- Court users from a number of disciplines have suggested that the court should have the power to give directions pre-action, where there is a serious problem in relation to the protocol process. I see force in this proposal, having seen extensive evidence during the Costs Review of non-compliance causing serious problems. I therefore recommend that such a power should be added by way of amendment to CPR rule 25.1. This recommendation is dealt with in chapter 39 below.
- In chapter 39 below I set out a number of orders which the court should be permitted to make where there is non-compliance with a protocol. These include:
- That the parties are relieved from the obligation to comply or further comply with the protocol.
- That a party do take any step which might be required in order to comply with the protocol.
- It is possible to think of many situations in which the court might make an order under (i) above: for example, a substantial case where there is no real prospect of pre-trial settlement and compliance with the protocol would simply involve duplication of costs; or a case where D has failed to send a proper letter of response in time and C wishes to get on with the litigation. It is also possible to think of many situations in which the court might make an order under (ii) above. In a case where C fails to comply with the (attenuated) protocol requirements for the letter of claim, the court may have a choice between making an order under (i) or (ii). The court may say that since C has failed to send a proper letter of claim, it is not entitled to a response letter; or the court may direct C to send a proper letter. The appropriate order in any instance will depend upon the circumstances of the case.
- I am conscious that the decision whether to retain a pre-action protocol for construction and engineering disputes is finely balanced. There is a strong body of opinion to the effect that the protocol serves to increase, rather than reduce, costs. When the TCC moves into the Rolls Building in 2011 the anomalous situation will arise that the TCC has a pre-action protocol applicable to most of its cases, but the other two jurisdictions within that building (Commercial Court and Chancery Division) have not.
- I recommend that after the TCC has moved into the Rolls Building in 2011, the whole question of the protocol should be reviewed. The three jurisdictions in that building will all deal with business disputes. There will be benefit in the TCC taking account of the position in the Commercial Court and Chancery Division, when the different specialist jurisdictions have come together under one roof. The users of the TCC, both litigants and lawyers, may possibly conclude at that stage that their preaction procedures should be aligned with those prevailing in those other
Need for further review
- However, the outcome of that review must be a matter for the TCC judges and practitioners after 2011.
Attachment 3 – Extracts from Building Contract Disputes: Practice & Precedents
Robert Fenwick Elliott and Jeremy Glover, Thomson Reuters Sweet & Maxwell, London, (Looseleaf)
Note that these extracts are addressed to the England & Wales Pre-Action Protocol for Construction and Engineering Disputes.
7–2B It applies to most but not all TCC cases; paragraphs 2.1.2 and 2.2 et seq. of the TCC Guide provides the following explanation:
“2.1.2 The purpose of the Protocol is to encourage the frank and early exchange of information about the prospective claim and any defence to it; to enable parties to avoid litigation by agreeing a settlement of the claim before the commencement of proceedings; and to support the efficient management of proceedings where litigation cannot be avoided.
The overriding objective (CPR rule 1.1) applies to the pre-action period. The Protocol must not be used as a tactical device to secure advantage for one party or to generate unnecessary costs. In lower value TCC claims (such as those likely to proceed in the county court), the letter of claim and the response should be simple and the costs of both sides should be kept to a modest level. In all cases the costs incurred at the Protocol stage should be proportionate to the complexity of the case and the amount of money which is at stake. The Protocol does not impose a requirement on the parties to produce a detailed pleading as a letter of claim or response or to marshal and disclose all the supporting details and evidence or to provide witness statements or expert reports that may ultimately be required if the case proceeds to litigation. Where a party has serious concerns that the approach of the other party to the Pre-Action Protocol is not proportionate, then it is open for that party to issue a claim form and/or make an application (see Paragraph 4.1.5 below) to seek the assistance of the court.”
7–3 The second is the Practice Direction on Pre-Action Conduct, which came into force on April 6, 2009. Sections (II) and (IV) of this Practice Direction apply to all types of proceedings including those already governed by the Construction and Engineering Pre-action Protocol. That said, the aims of the new Practice Direction are consistent with the Construction and Engineering Protocol, namely, as set out in item 6.1, the parties should:
“(i) exchange sufficient information about the matter to allow them to understand each other’s position and make informed decisions about settlement and how to proceed;
(ii) make appropriate attempts to resolve the matter without starting proceedings, and in particular consider the use of an appropriate form of ADR in order to do so.
(iii) the parties should act in a reasonable and proportionate manner in all dealings with one another. In particular, the costs incurred are compliant should be proportionate to the complexity of the matter and any money at stake. The parties must not use this Practice Direction as a tactical device to secure an unfair advantage for one party or to generate unnecessary costs.”
However, it should be noted that there may be some conflict in terms of certain practical issues between the new Practice Direction and the Construction and Engineering Protocol. For example the Practice Direction lists at para.2.2 those applications to which it does not apply. These include applications for consent orders or applications for freezing orders. Adjudication and applications to enforce adjudicator’s decisions are not mentioned, which puts the Practice Direction in conflict with the Construction and Engineering Protocol. The TCC Guide lists out to which claims the Construction and Engineering Protocol applies at ss.2.2 and 2.3 as set out below:
- 2 To Which Claims Does The Protocol Apply?
2.2.1 The court will expect all parties to have complied in substance with the provisions of the Protocol in all construction and engineering disputes. The only exceptions to this are identified in paragraph 2.3 below.
2.2.2 The court regards the Protocol as setting out normal and reasonable pre-action conduct. Accordingly, whilst the Protocol is not mandatory for a number of the claims noted by way of example in paragraph 1.3.1 above, such as computer cases or dilapidations claims, the court would, in the absence of a specific reason to the contrary, expect the Protocol generally to be followed in such cases prior to the commencement of proceedings in the TCC.
2.3 What Are The Exceptions?
2.3.1 A claimant does not have to comply with the Protocol if his claim:
a) is to enforce the decision of an adjudicator;
b) includes a claim for interim injunctive relief;
c) will be the subject of a claim for summary judgment pursuant to Part 24 of the CPR; or
d) relates to the same or substantially the same issues as have been the subject of a recent adjudication or some other formal alternative dispute resolution procedure.
2.3.2 In addition, a claimant need not comply with any part of the Protocol if, by so doing, his claim may become time-barred under the Limitation Act 1980. In those circumstances, a claimant should commence proceedings without complying with the Protocol and must, at the same time, apply for specific directions as to the timetable and form of procedure to be adopted. The court may order a stay of those proceedings pending completion of the steps set out in the Protocol.”
The Guide also provides a useful overview of the Protocol:
“2.4 What Are The Essential Ingredients Of The Protocol?
2.4.1 The Letter of Claim.
The letter of claim must comply with Section 3 of the Protocol. Amongst other things, it must contain a clear summary of the facts on which each claim is based; the basis on which each claim is made; and details of the relief claimed, including a breakdown showing how any damages have been quantified. The claimant must also provide the names of experts already instructed and on whom he intends to rely.
2.4.2 The Defendant’s Response.
The defendant has 14 days to acknowledge the letter of claim and 28 days (from receipt of the letter of claim) either to take any jurisdiction objection or to respond in substance to the letter of claim. Paragraph 4.3.1 of the Protocol enables the parties to agree an extension of the 28 day period up to a maximum of 3 months. In any case of substance it is quite usual for an extension of time to be agreed for the defendant’s response. The letter of response must comply with section 4 of the Protocol. Amongst other things, it must state which claims are accepted, which claims are rejected and on what basis. It must set out any counterclaim to be advanced by the defendant. The defendant should also provide the names of experts who have been instructed and on whom he intends to rely. If the defendant fails either to acknowledge or to respond to the letter of claim in time, the claimant is entitled to commence proceedings.
2.4.3 Pre-action Meeting.
The Construction and Engineering Protocol is the only Protocol under the CPR that generally requires the parties to meet, without prejudice, at least once, in order to identify the main issues and the root causes of their disagreement on those issues. The purpose of the meeting is to see whether, and if so how, those issues might be resolved without recourse to litigation or, if litigation is unavoidable, what steps should be taken to ensure that it is conducted in accordance with the overriding objective. At or as a result of the meeting, the parties should consider whether some form of alternative dispute resolution (“ADR”) would be more suitable than litigation and if so, they should endeavour to agree which form of ADR to adopt. Although the meeting is “without prejudice”, any party who attended the meeting is at liberty to disclose to the Court at a later stage that the meeting took place; who attended and who refused to attend, together with the grounds for their refusal; and any agreements concluded between the parties.
2.5 What Happens To The Material Generated By The Protocol?
2.5.1 The letter of claim, the defendant’s response, and the information relating to attendance (or otherwise) at the meeting are not confidential or ‘without prejudice’ and can therefore be referred to by the parties in any subsequent litigation. The detail of any discussion at the meeting(s) and/or any note of the meeting cannot be referred to the court unless all parties agree.
2.5.2 Normally the parties should include in the bundle for the first case management conference: (a) the letter of claim, (b) the response, and (c) any agreed note of the pre-action meeting: see Section 5 below. The documents attached to or enclosed with the letter and the response should not be included in the bundle.”
The Protocol is principally concerned with cases where there has been no prior adjudication of the issues between the parties, and thus, in a sense, the application of the Protocol and the adjudication procedure represent a twin-forked attack on unnecessary legal expenditure.
7–3A Where there is a Pre-action Protocol, there are two main areas where the court may impose sanctions for non-compliance:
- at the stage at which the court gives directions-the court may order a party to pay a sum of money into court if that party has, without good reason, fail to comply with the relevant Pre-action Protocol;
- the court must have regard to pre-action conduct in relation to costs.
Even in cases not covered by an approved protocol, the courts may penalise parties who act unreasonably pre-action. Allocation questionnaires note that parties are expected to comply with the relevant pre-action protocol and ask the parties whether they have so complied, and, if not, to explain why not.
7–4 The courts will take these principles seriously:
- Thus for example in Paul Thomas v Hyland, a claimant who made an unsuccessful application under Pts 24 and 25 was ordered to pay costs on an indemnity basis because he refused to provide information reasonably required by the defendant as to the claim, or to follow the terms of the (then draft) pre-action protocol. Presumably, the claimant would have been deprived of some or all of his costs even if he had won.
- In Phoenix Finance Limited v Federation International de l’Automobile, the successful defendants were awarded their costs on an indemnity basis since the claimant had started proceedings without sending as letter before action or giving any other warning.
- In Burchell v Bullard, Ward L.J. said:
“I draw attention, moreover, to paragraph 5.4 of the pre-action protocol for Construction and Engineering Disputes-which I doubt was at the forefront of the parties’ minds-which expressly requires the parties to consider at a pre-action meeting whether some form of alternative dispute resolution procedure would be more suitable than litigation. These defendants have escaped the imposition of a costs sanction in this case but defendants in a like position in the future can expect little sympathy if they blithely battle on regardless of the alternatives.”
- In Charles Church Developments Ltd v Stent Foundations Ltd & Peter Dann Ltd, Mr Justice Ramsey, made an adverse costs order against Charles Church who had failed to follow the Protocol, concluding that:
“(1) …; these proceedings would have been likely to be resolved had a pre-action protocol procedure been followed.
(2) The fact that the proceedings from 14 February 2006 to 13 April 2007 should have been carried out in the lower-cost atmosphere of the pre-action protocol process.
(3) The fact that if the proceedings are not settled, the proceedings will continue, and if CCD succeeds, it would otherwise be entitled to its costs in the period from 14 February 2006 to 13 April 2007.”
- In Bovis Homes Ltd v Kendrick Construction Ltd Mr Justice Coulson penalised a party in costs, who failed to mention at an early stage that they intended to apply for a stay so that the claim could be referred to arbitration.
- In a Chancery case, Webb Resolutions Ltd v Waller Needham Green, the court held that a defendant who accepted a Pt 36 offer almost a year late should be awarded its costs for the period of delay, thereby reversing the normal costs rule, because of the claimant’s failure to comply with the Professional Negligence Pre-action Protocol.
7–4A The courts will not automatically penalise a party who fails to comply with the pre-action protocol process. In the case of Mason v Coleman, Judge Behrens QC concluded that the sending of a pre-action protocol letter would not have made any “significant difference” to the conduct of the defendant trustees.
7–5 The approach of the courts where a party fails to observe the protocol is in parallel to its approach where a party refuses unreasonably to attempt ADR; the Construction and Engineering Pre-Action Protocol expressly require the parties to consider ADR, and whilst there is no compulsion to agree to attempt ADR, the old view that a party is entitled to have his disputes heard in court is subject to the filter that the courts do not expect to have to deal with matters which could and should have been resolved at a pre-action stage. The TCC Guide contains the following:
“2.6 What If One Party Has Not Complied With The Protocol?
2.6.1 There can often be a complaint that one or other party has not complied with the Protocol. The court will consider any such complaints once proceedings have been commenced. If the court finds that the claimant has not complied with one part of the Protocol, then the court may stay the proceedings until the steps set out in the Protocol have been taken.
2.6.2 Paragraph 2.3 of the Practice Direction in respect of Protocols (section C of volume 1 of the White Book) makes plain that the court may make adverse costs orders against a party who has failed to comply with the Protocol. The court will exercise any sanctions available with the object of placing the innocent party in no worse a position than he would have been if the Protocol had been complied with.
2.6.3 The court is unlikely to be concerned with minor infringements of the Protocol or to engage in lengthy debates as to the precise quality of the information provided by one party to the other during the Protocol stages. The court will principally be concerned to ensure that, as a result of the Protocol stage, each party to any subsequent litigation has a clear understanding of the nature of the case that it has to meet at the commencement of those proceedings.”
The approach of the TCC has been summarised by Mr Justice Akenhead who has made it clear that the overriding objective was concerned with saving expense, proportionality, expedition and fairness:
“The Court should avoid the slavish application of individual rules, practice directions or protocols if such application undermines the overriding objective …; Whilst the norm must be that parties to litigation do comply with the Protocol requirements, the Court must ultimately look at non-compliances in a pragmatic and commercially realistic way. Non-compliances have always been compensated by way of costs orders.”
The same judge has also commented that:
“What the Court should do in considering the Pre-Action Protocol is to look at the matters in substance, not as a matter of semantics …; and not for technical non-compliances …;”
And again, Mr Justice Akenhead cautioned, especially in low-value claims, against using the Protocol as a “weapon or tactic”. Parties should not prolong the process unnecessarily and should aim to keep costs to a reasonable minimum.
However where there is a substantial breach, the courts will not be slow to penalise it.
7–5A The new Practice Direction, at item 4.6, lists examples of the type of sanctions the court may impose if there has been non-compliance with the Protocol. These, which are in line with the approach of the TCC, are as follows:
“(i) staying (that is suspending) the proceedings until steps which are thought to have been taken have been taken;
(ii) an Order that the party at fault pays the costs, or part of the costs, of the other party or parties …;
(iii) an Order that the party at fault pays those costs on an indemnity basis …;
(iv) if the Party at fault is the Claimant in whose favour an Order for the payment of a sum of money is subsequently made, an Order that the Claimant is deprived of interest on all or part of that sum, and/or that interest is awarded at a lower rate than would otherwise have been awarded;
(v) if the Party at fault is a Defendant, and an Order for the payment of a sum of money is subsequently made in favour of the Claimant, an Order that the Defendant pay interest on all or part of that sum at a higher rate, not exceeding 10+ above base rate, then would otherwise have been awarded.”
Party and judicial reaction to the Protocol
7–6 In 2003, three years after the introduction of the Protocol, a survey was carried out of its working. The key findings were as follows:
- In general the Protocol is working well and has played a part in encouraging parties to settle their cases before commencing proceedings.
- Some litigators find the required provision of information burdensome and wasteful; others find it helpful.
- With some exceptions, the TCC typically does not show the interest in Protocol compliance that the CPR expects.
In October 2005 a working party was set up by the then head of the TCC, Mr Justice Jackson, to consider whether any changes might be made to the Protocol. The interim report noted that the protocol had:
“benefited the parties to disputes by providing them with an early opportunity to articulate and evaluate the strengths and weaknesses of the claims and defences.”
The interim report, did however note two areas of concern with the working of the Protocol, namely the length of time spent and costs incurred in complying with the Protocol. The revisions to the Protocol were made with these concerns in mind.
Jackson L.J., as part of his Review of Civil Litigation Costs: Final Report, noted concern on the part of all those concerned with construction claims about the costs of the Protocol process. For example, the TCC judges themselves said that:
“There is a widespread view that the Pre-Action Protocol can often be a waste of time and costs. Those costs can often be substantial, running into many and sometimes hundreds of thousands of pounds. The steps taken during that process can often be duplicative; for instance, the letter of claim will mirror (but in less detail) the Particulars of Claim.”
His proposed remedy to this was to suggest that consideration be given to strengthening the wording of the proportionality provision. For example, the claim letter should not annex or reproduce a draft pleading. This is why in para.2.3.2 of the TCC Guide, reproduced above at para.7-2B, the wording has been strengthened to lay stress on the need for proportionality and to avoid the generation of unnecessary costs.
The cost of compliance
7–7 The 2003 survey found that the amount of money spent on the Protocol varied, no doubt to reflect the complexity of the claim in question. It ranged from £2,000–£300,000; much but not all of those sums would have been spent in any event on the litigation. It was not the intention of the original draftsman of the Protocol that significant sums should be spent on its implementation, and one of the changes introduced was to include a provision at para.1.5 requiring to parties to keep the cost of compliance “proportionate”. But the Protocol does not say what this equates to in quantative terms. As a rough rule of thumb, it is suggested that the amount spent on compliance (excluding work that would need to be done in any event for court proceedings, and the cost of any ADR process which emerges from it) should not exceed about two per cent of the likely cost of fought litigation; if the parties spend much more than that, they are unlikely to be getting value for money, and will probably be doing more than they need to avoid the risk of sanctions from the court.
“In addition, I am aware that prospective claimants complain that compliance with the Engineering and Construction protocol can be an expensive exercise which ‘front-loads’ the costs to their detriment. There would be concern in the construction and the related insurance industry if it was thought that a prospective claimant embarking on the Engineering and Construction protocol procedure was routinely obliged to discharge the sort of onerous disclosure obligations contended for by the Applicant here.”
7–9 The TCC Guide says that:
“2.7 Costs of compliance with the Protocol.
2.7.1 If compliance with the Protocol results in settlement, the costs incurred will not be recoverable from the paying party, unless this is specifically agreed.
2.7.2 If compliance with the Protocol does not result in settlement, then the costs of the exercise cannot be recovered as costs, unless:
a) those costs fall within the principles stated by Sir Robert Megarry V-C in Re Gibson’s Settlement Trusts  Ch 179; or
b) the steps taken in compliance with the Protocol can properly be attributable to the conduct of the action.”
But in principle it seems clear that the costs of compliance with the protocol are usually recoverable costs in subsequent litigation as “incidental to” those proceedings within the meaning of s.51 of the Senior Courts Act 1981. But part of the purpose of the protocol is to narrow issues, and a defendant will not ordinarily be entitled to the costs he incurs at protocol stage in successfully persuading a claimant not to pursue a particular claim, and protocol costs in relation to an issue that is not, in the event, included in the litigation are not treated as costs incidental to the litigation.
7–15 The pre-action letters were not intended to be a first pass at pleadings, although some anecdotal evidence suggests that particularly those acting for potential defendants are seeking a high degree of particularisation. Instead, their key purpose is to identify the true nature of the dispute. Thus, by way of example:
- A contractor has a claim for loss and expense under a traditional building contract, based on the late provision for information. The claimant needs to set out in summary form the facts, principal contractual terms and relief claimed, but he should also go on to say (by way of example) that he believes the claim to have been wrongly rejected by the architect because the grant of extension of time and the certification of loss and expense would carry with it a tacit admission by the architect that he had failed in his own obligations to the client. This latter point is not one which would need to appear in the contractor’s pleaded case, but it would alert the employer to the potential dangers in relying only upon his architect’s assessment of the matter.
- In his reply, the employer might say, if it be the case, that he has not merely relied upon the architects’ account, but has instead satisfied himself that the contractor was relying upon information to which he was never contractually entitled at all, and which had been issued merely as a co-operative gesture when the contractor was already in delay. Again, the sort of points made in the defendant’s reply may well go beyond that which it would be necessary for him to plead in his defence.
7–16 There may be occasion when the contents of these pre-action letters come close to the defamatory. However, provided they are written without malice, they will enjoy qualified privilege on the ground that there are corresponding duties to impart and receive the communication. The tone of the letters should be very much to the point, dwelling upon motive only to the extent necessary to address these essential issues between the parties. Certainly, long essays seeking to analyse every twist and turn of a dispute should be avoided.
7–17 It should be remembered that these letters are very much “open” letters, and if the matter proceeds to litigation, are very likely to be referred at some stage to the court: as such, they should aim for a tone which is both reasonable and to the point.
The next paragraph is 7–20.
The claimant’s letter
7–20 It is sometimes assumed, wrongly, that the claimant’s letter should contain all the information needed by the defendant to make a full assessment of his liability, and as to quantum. This is not so, and it is certainly not the function of the claimant’s letter to cover all the ground that will be covered by pleadings, experts reports, exchange of witness statements which would be required in litigation. This has been confirmed by the introduction of para.1.5 in the revised protocol which makes it clear that the costs incurred should be proportionate to both the complexity of the case and the amount of money which is at stake. What is appropriate is sufficient information for the defendant to understand the nature of the case being made against him, in enough detail to know if the claim is one that he should take seriously and, if so, to form a view as to what is likely to be an efficient way to deal with it. Put another way, the claimant’s letter should contain enough for the defendant to say, for example, “OK, I can see that there some technical issues here: it would make sense for us to agree a mutually respected engineer who could act by way of look-sniff arbitration or expert determination”; it would not be appropriate for the claimant’s letter to contain all the material that would be submitted to such an engineer in such a process.
7–21 There will always be claimants who genuinely believe that they have a good claim, but who are unwilling or unable to bear the cost burden of full-scale litigation or arbitration. For them, the writing of a claim letter under the protocol will inevitably be something of a bluff; the procedure will not provide them with an effective alternative dispute resolution process if the defendant gets their measure and calls their bluff. Some defendants in these circumstances will try to play the claimant along the pre-action protocol route for as long as possible with no intention of making an offer, exploiting the tendency of claimants to believe what they want to believe (namely, that the process will lead to an offer) and getting the claimant to waste some money on costs. The best line for claimants in these circumstances will normally be: adjudicate if you can, but if that is not possible, do not overspend on the pre-action protocol process.
7–22 Claimants should write their pre-action letters with the following objectives in mind (most important first):
- to try to persuade the defendant to settle the claim, or perhaps parts of it, on reasonable terms without the need for any formal dispute resolution process. If that is not possible,
- to try to persuade the defendant to agree to adopt a dispute resolution route more efficient than full scale litigation or arbitration. If that is not possible,
- if litigation is inevitable, there may be aspects of the claimant’s claim to which the defendant may be able to produce a good defence. It makes sense for the claimant to find out about these areas before issuing proceedings, partly to save himself the risk of wasted costs (including a likely order for costs against him) when those claims are abandoned later, and partly because a defendant is likely to take the remaining good claims more seriously if he sees the claimant drop the bad ones. Claimant should not be afraid to write along the lines of, “We do not believe that you can have a defence to this claim, but if you believe you have, please tell us now so that we can consider it”.
- if it is inevitable that the case will not resolved until the defendant has carried out some investigative work, to provide the information that the defendant will need to get that investigative work under way
- to start setting up his position for discussion of procedure at the pre-action meeting,
- to satisfy the court that the protocol was followed. It is not enough to forward a copy of an expert’s report.
The next paragraph is 7–24.
The defendant’s letters
7–24 The protocol calls for response in three phases:
- The acknowledgement within 14 days from receipt of the pre-action letter. No information is required here except the name of the defendant’s insurer, and extension of this time will rarely be appropriate. However, a defendant will often here seek an extension of time for his substantive response (see below).
- Any objections to jurisdiction, within 28 days from receipt of the pre-action letter.
- The substantive response. This is due 28 days from receipt of the pre-action letter, extendable by agreement to three months. In practice, more than 20 days is often needed, and claimants usually and sensibly agree such further time as is reasonably needed; if a claimant unreasonably refuses an extension of the 28 days, the defendant should simply tell the claimant when (within the three month window) he will be able to respond.
7–25 The defendant’s obligation to respond is only triggered upon receipt of a proper letter of claim. As with the pre-action letter, the formal matters called for by the protocol do not envisage a pleading, and no useful purpose is served by formulaic denials. Rather, what is required is a practical identification of what is really in dispute, so that a sensible discussion can take place at the pre-action meeting as to how those issues might be resolved.
7–26 Defendants should write their substantive response with the following objectives in mind (most important first):
(1) to try to persuade the claimant to drop the claim, or perhaps parts of it, without the need for any formal dispute resolution process. If that is not possible,
(2) to try to persuade the claimant to agree to adopt a dispute resolution route more efficient than full scale litigation or arbitration. If that is not possible,
(3) if the defendant thinks that he might have to pay at least something in satisfaction of the claim, but does not know how much, to obtain the information he needs to make an informed decision about settlement or a Pt 36 offer,
(4) to start setting up his position for discussion of procedure at the pre-action meeting,
(5) to satisfy the court that the protocol was followed.
7–27 It is open to a defendant to spell out here what further information he might reasonably require in order to decide whether to accept the claim, and if so, in what amount. But it appears from the 2003 survey that some defendants are asking for unreasonable amounts of information, sometimes it seems for their nuisance value. There is no need or advantage for claimants to get sucked into answering such questions unless the claimant thinks there is a real prospect that answering them might lead to a pre-action settlement.
7–28 Further pre-action letters may follow out of the response, and at least one further letter will be required if there is a counterclaim. But parties should resist the temptation to keep the correspondence going: it is the purpose of the pre-action meeting to make sensible agreements about how to resolve the dispute, and disputes are rarely if ever resolved by batting the issues back and forth by way of letters.
Pre-action disclosure-seeking documents from the other party
7–29 Unlike the other pre-action protocols, the Construction and Engineering Pre-action Protocol does not contain any provision whereby one party can require the production of documents by the other. This is entirely deliberate. Construction disputes are notorious for the amount of documentation they produce, and if there were an automatic pre-action right to require documents, it is likely that such a right would routinely lead to a further initial round of expensive and time-consuming disclosure, incompatible with the object of a short, inexpensive review of the case. The policy of this Protocol, therefore, is to limit exchange of pre-action documentation to that which parties put forward voluntarily.
- There is nothing to prevent one party asking the other voluntarily to disclose a document or documents at pre-disclosure stage, and very often it will be in that other party’s interest to give that voluntary disclosure. It is generally in the interests of neither party that one of them be motivated to trigger the expensive path of litigation or arbitration merely to obtain access to documents.
- In an appropriate case (which will be rare), the other party can be required to give pre-action disclosure under CPR 31.16; such disclosure will be ordered if at all on a strictly limited basis.
- It is necessary for the applicant to have identified an arguable claim against the respondent.
- The court does not have the power to order pre-action disclosure if the underlying dispute is to be decided in arbitration?
Note that, far from providing for compulsory disclosure pre-action, the Protocol invites the parties to dispense with all or part of the disclosure process, even if litigation cannot be avoided. Paragraph 1.5 also makes it clear that the Protocol does not require the parties to marshall and disclose all the supporting details and evidence they may require if the case is ultimately litigated. Mr Justice Jackson in Birse Construction Limited v HLC Engenharia E Gestäo de Projectus SA said:
“Let me now stand back from the authorities and consider the operation of CPR rule 31.16 in the context of TCC litigation. IT projects and construction projects typically generate extensive documentation. In many TCC cases, disclosure is a labour-intensive exercise and a major head of costs. Therefore, disclosure before the proper time is not something which should be lightly ordered. On the other hand, the court encourages the early and candid exchange of information in the hope that this will promote settlement before excessive costs are incurred. Alternatively, it is hoped that the parties may at least narrow the issues between them. This is part of the philosophy which underlies the Pre-action Protocol for Construction and Engineering Disputes. It should be noted that this is the only pre-action protocol which requires a meeting between the parties before they resort to litigation.
In any given case it must be a matter for close and critical analysis whether the early disclosure by one party of certain categories of documents really does bring the prospect of (1) disposing fairly of the anticipated proceedings; or (2) assisting the dispute to be resolved without proceedings; or (3) saving costs. The answer to this question must be heavily fact-sensitive.
No rule of thumb can assist. This question is the jurisdictional threshold. If the answer is no, the application fails.
If the answer to the first question is yes, the next matter to consider is whether pre-action disclosure is desirable in order to achieve those of the specified purposes which are achievable. The third question to consider is whether the court should exercise its discretion in favour of making the order. As Rix LJ pointed out in Black, those two questions tend to merge into one another, but the judge must bear in mind each of the separate tests which he is required to perform.
The test of “desirable” and the exercise of discretion are particularly important in this context because of the relative ease with which the jurisdictional threshold can be crossed (see Black at paragraphs 82 and 83). In the TCC context, the judge may be assisted by having regard to any correspondence written pursuant to the Protocol. The judge should also have regard to the importance of limiting (a) pre-action costs and (b) the pre-action expenditure of resources (including management time) to a level which is reasonable and proportionate.
Christopher Clarke J. observed in First Gulf Bank that to require pre-action disclosure is an order which, even if not exceptional, is unusual. I agree with that observation. Given the level of co-operation between opposing parties, which is a normal feature of TCC litigation, I would not expect an order for pre-action disclosure to be appropriate in most cases which come before this court.”
The Pre-Action Meeting
7–30 This is a feature unique to the Construction and Engineering protocol. Paragraph 5.1 of the protocol stipulates that the parties should “normally” meet, within 28 days after the Defendant sends in its letter of response; and they usually do.
7–30A The agenda should be based on para.5 of the protocol. There are 3 benefits that might come from the pre-action meeting:
- In some cases, the issues can be resolved without litigation, in the sense of being resolved on the spot.
- In other cases, the parties might agree a method for the resolution of the dispute that is more efficient than litigation.
- Thirdly, where litigation is inevitable, the parties may be able to agree means for streamlining it.
This meeting represents an important opportunity for settlement, or at least reducing the scope of the dispute, potentially carrying with it several of the benefits of an ADR process. In some cases, particularly large ones, it might well be worthwhile for the parties to invest in the help of a neutral solicitor to chair the meeting. The cost of this, which would naturally be shared by the parties, will be very small in the context of a large case, and might well ensure that the meeting fulfils its purpose and lead to very considerable savings in cost. Alternatively it is not unusual for the meeting to be carried out under the “umbrella” of ADR.
The next paragraph is 7–31.
Resolution on the spot
7–31 The key here is the attendance list. Almost all disputes in the construction industry will be the subject of some sort of discussion between the parties, but very rarely with the list of attendees set out at paragraph 5.3 of the protocol. Frequently, meetings without lawyers fail on the basis that one or both parties simply says “well, my lawyer says I will win”, and meetings attended only by lawyers frequently suffer for want of authorised decision takers. Further, the obligation on both parties to consider settlement should be sufficient to break the ice, in cases where neither party would otherwise be willing to raise the question of settlement for fear of appearing weak.
Agreement of an alternative dispute resolution mechanism
7–32 Secondly, the meeting may be able to avoid litigation, in the sense that the parties may be able to agree some other method of dispute resolution that is much quicker and cheaper than litigation. For example, a defects dispute may hinge entirely on a difference of opinion as to whether the defect is one of design or one of workmanship. In such circumstances, it may be prudent for the parties to agree to refer that issue to expert determination or to adjudication. It is not always necessary in these circumstances that the issue so referred to determination should cover every issue (such as quantum) where the unlocking of a central issue realistically be expected to lead to a settlement dispute as a whole. The range of alternative dispute resolution methods includes the following:
- hybrid ADR,
- adjudication (if there be no right to adjudication, it can of course be adopted by agreement),
- expert determination,
- look-sniff arbitration,
- pendulum arbitration,
- documents only arbitration, or
- arbitration limited in time and money.
7–33 Sometimes, it will emerge at the meeting stage that one party in other is looking for some further information other, and that the provision of that information may well be the key to unlocking the dispute. It appears from Paul Thomas Construction Ltd v Hyland (see paragraph 7.4 above) that the court may well approach the question of costs according to whether information reasonably sought was provided. There is a procedural problem here, in that under paragraph 5.7 of the protocol, and subject to the exceptions at paragraph 5.6 of the protocol, everything that takes place at the meeting is “without prejudice”. For this reason, it is desirable that the defendant should set out in the pre-meeting correspondence the information that he requires.
Streamlining the litigation
7–34 The scope for saving of costs here is perhaps more modest. The two obvious candidates in this regard are listed at paragraph 5.5 of the protocol, namely the use of a single joint expert or an agreement to dispense with disclosure of documents altogether. Other economy measures might include, for example, agreement that either side will not use leading counsel, or even an attempt to keep legal costs down by agreeing a ceiling to the amount of legal costs recoverable by the winning party.
How does the Protocol apply to additional parties who are brought into a multi-party action?
7–36 This was the question faced by Mr Justice Jackson in the case of Alfred McAlpine Capital Projects Ltd v SIAC Corporation (UK) Ltd. As the Judge remarked, there are two conflicting considerations. On the one hand, the new parties should not be deprived of the benefits of the Protocol. On the other hand, it is desirable, if possible, that the existing trial timetable should be maintained. The Judge concluded that there was “no simple formula or universal answer to this problem”. However he set out seven points which should be taken into consideration:
“(1) When was it known that the party in question was going to be joined in the action?
(2) What information about the action and the underlying dispute was given to that party before joinder and when?
(3) How large a part does the new party play in the action as a whole?
(4) What stay, if any, could be accommodated in the proceedings against the new party without jeopardising the overall timetable?
(5) Does justice require that the whole timetable should be put back and that a new trial date should be fixed?
(6) Could the new party be compensated in costs for any non-compliance with the Protocol? If so, should the question of costs be addressed immediately or should that question be addressed at the end of the action?
(7) Is there any way (other than a stay) within the parameters of the existing timetable by which the new party could be put in the same position that it would occupy if the Protocol had been followed?”
On the facts, Mr Justice Jackson refused the application for a stay which had been brought by the Part 20 defendant.
The next paragraph is 7–40.
The Application of the Protocol to Other Processes
7–40 To what extent should the protocol be followed before the commencement of proceedings other than litigation in court?
7–41 There is certainly no formal requirement as such within the Arbitration Act 1996 to follow the Pre-action Protocol, but the sense and purpose of the Pre-action Protocol apply just as much to arbitrations as to litigation. Some arbitrators may feel that a party who declines to adopt the Protocol is acting unreasonably; other more cynical arbitrators who treat the early settlement of cases as a threat to their livelihood may regard the Pre-action Protocol as markedly unwelcome.
7–42 However, most practitioners are likely, once the Pre-action Protocol has become more widely established, to follow it whether the matter is destined for litigation or for arbitration. It is to be borne in mind that in many cases there will be doubt at this early stage as to whether the matter would proceed along a litigation or an arbitration route.
The next paragraph is 7–45.
7–45 Neither is there any formal need to follow the pre-action protocol procedure before commencing an adjudication. Indeed, if adjudication or other ADR procedure has taken place, the protocol need not be followed at all, and in that sense these other processes are seen by the protocol as alternative to it. But the decision in London & Amsterdam v Waterman suggests that in some complex cases a claimant is well advised to prime the pre-adjudication pump if he is not to be accused of ambush; the pre-adjudication letters might be in much the same form as the pre-action letters, but little or no purpose is likely to be served by a meeting on the eve of an adjudication notice.
 As the then Chairman of TeCSA, I was the principal draftsman.
 See r 17 of the Supreme Court Civil Supplementary Rules 2014 for the new South Australian provision.
 See r 18 ibid.
 See r 20 ibid.
 See rr 31 – 33 ibid.
 Second edition, first revision, October 2007.
 Unless these reports have necessarily been obtained as part of the investigation of the claim and it
would promote the chances of settlement for them to be disclosed.
 But not the costs of a separate stand-alone ADR process, which is separate from the pre-action meeting required by paragraph 5.1 of the protocol.
 Either in the protocol or in the TCC Guide, as appropriate.
 This disallowance should apply even if those excessive labours were subsequently of benefit in the litigation. The objective of my proposal is to stamp out excessive front loading: see The Cost of Civil Justice: Time for Review or Revolution, Lexis Nexis White Paper by Elsa Booth, which can be found at http://www.lnbconnect.co.uk/images/the%20cost%20of%20civil%20justice.pdf, at pages 4-7.
 In my experience, the solicitors who regularly practise in the TCC are for the most part specialists, who are well able to reach sensible agreements on matters of this sort thus saving their clients unnecessary hearing costs.
 In cases of conflict such as these, whilst having regard to the Pre Action Conduct Practice Direction, it is anticipated that the TCC, in maintaining its pragmatic approach to pre action conduct generally (see for example Mr Justice Akenhead in the Orange case, para.7–5 below), is likely to give primary consideration to the extent to which a party has complied with the TCC guide and the Construction & Engineering Protocol. See also Higginson Securities (Developments) Ltd v Hodson  EWHC 1052 where the court confirmed that the Protocol should not be used as a “weapon or tactic”, especially in low value claims.
 See Anglo Swiss Holdings Ltd v Packman Lucas Ltd  EWHC 3212 (TCC) for an example of the court applying this rule Mr Justice Akenhead on account of what he termed the “unreasonable and oppressive behaviour” of the claimants in pursuing claims without first honouring the adjudicator’s decisions and the Court judgments enforcing them, imposed a stay until that wrong had been rectified.
 In the new Practice Direction item 7.4(4) notes that where the matter is “particularly complex, for example requiring specialise advice” then a period of larger than 30 days may be appropriate. At 7.2(5) it notes that a period of larger than 90 days will only be reasonable in “exceptional circumstances”.
 Indeed it was confirmed by Mr Justice Akenhead in the case of Higginson Securities (Developments) Ltd v Hodson  EWHC 1052 that a meeting is not compulsory. However, he cautioned that: “the ‘default option’ is that a meeting should take place unless there is a reasonably good reason for such a meeting not to take place. The wording does not impose specifically on a particular party an obligation to arrange the meeting and so it must be incumbent on both parties to seek to set up a meeting. Usually, if one party expresses the view that it wants a meeting, that will be a good reason for a meeting to take place.”
 Paragraph 1.2(iv) of the Protocol, reproduced at para.7–10 below and referred to at 2.3.1.d of the Guide at para.7–2 above.
 See for example the case of Skanska v Eggar (Barony)  EWHC 284 (TCC) in which the original contract price was £12 million, and the disputes were eventually judged at a net £2.9 million with costs of £9 million. HHJ Wilcox remarked at paras 31 and 32 of the judgment that:;
“This is not a case to which the Construction and Engineering Protocol applied, neither did the provisions of the Housing Grants Construction and Regeneration Act 1996. Had they done so the posturing and failure of each party to co-operate at various stages would have been frustrated.”
 CPR r.3.1(4) and (5).
 13 CPR r.44.5(3)(a). Paras 2.3 and 2.4 of the Practice Direction provide as follows:
“2.3If, in the opinion of the court, non-compliance has led to the commencement of proceedings which might otherwise not have needed to be commenced, or has led to costs being incurred in the proceedings that might otherwise not have been incurred, the orders the court may make include: (1)an order that the party at fault pay the costs of the proceedings, or part of those costs, of the other party or parties; (2)an order that the party at fault pay those costs on an indemnity basis; (3)if the party at fault is a claimant in whose favour an order for the payment of damages or some specified sum is subsequently made, an order depriving that party of interest on such sum and in respect of such period as may be specified, and/or awarding interest at a lower rate than that at which interest would otherwise have been awarded; (4)if the party at fault is a defendant and an order for the payment of damages or some specified sum is subsequently made in favour of the claimant, an order awarding interest on such sum and in respect of such period as may be specified at a higher rate, not exceeding 10 per cent above base rate (cf. CPR r.36.21(2), than the rate at which interest would otherwise have been awarded. 2.4The court will exercise its powers under paras 2.1 and 2.3 with the object of placing the innocent party in no worse a position than he would have been in if the protocol had been complied with.”
 For an example, see Liverpool City Council v Rosemary Chavasse Ltd and Walton Group Plc  C.I.L.L. 1706, where the plaintiff was deprived of more than half of its costs.
  C.I.L.L. 1748, decided in March 2000, some months before the Construction and Engineering Pre-Action Protocol came into effect (see para.7–10 below), but after the general form of the draft had been made known.
 TLR June 27, 2002.
  EWCA Civ 358.
  EWHC 855 (TCC). The case was subsequently described by Mr Justice Akenhead as a serious breach of the protocol-see Orange Personal Communication Services Ltd v Hoare Lea  EWHC 223 below.
  EWHC 1359 (TCC). This is a particular requirement of para.4(ii) of Construction and Engineering Protocol, although the principle of failing to mention something at an early stage upon which you later rely has a more general application.
  EWHC 3529 (Ch).
  EWHC 3070 (Ch).
 In fact, the Protocol itself does not specifically refer to the possibility of a stay being ordered as a sanction or remedy for non-compliance. That, as the TCC Guide makes clear, does not stop the question of a stay being considered by the courts. See Cundall Johnson and Partners LLP v Whipps Cross University Hospital NHS Trust  EWHC 2178 (TCC) where Mr Justice Jackson stayed the action on the grounds that the claimant had failed to comply with the terms of the Protocol. However, contrast that decision with that of Mr Justice Akenhead in Orange Personal Communication Services Ltd v Hoare Lea  EWHC 223 who refused to grant a stay for a number of reasons. Here, the claimant was involved in a dispute (their primary case) with its contractors following a flood at their data centre. The contractor’s defence was based on the defective design, as alleged, of Hoare Lea. As there were limitation issues, Orange commenced separate proceedings (the secondary case) against Hoare Lea to protect its position. In the first action there were directions and a trial date fixed for October 2008. The directions made a provision for ADR in April. Hoare Lea applied for a stay as Orange had not followed the Protocol. However Orange had responded by offering to provide any information that might be required. Significantly, this offer was not taken up. After consideration of this case, the judge dismissed the application. As Hoare Lea was privy to the pleaded case in the first action (ie there had been an exchange of information), a stay would not narrow the issues. So little time or costs would be saved embarking on the Protocol process at this stage. Perhaps most significantly of all, ordering a stay might jeopardise a forthcoming ADR and thus reduce the chances of settlement, which would be to the disadvantage of everyone concerned.
 In Orange v Hoare Lee  EWHC 223.
 TJ Brent Ltd v Black & Veatch Consulting Ltd  EWHC 1497.
 Higginson Securities (Developments) Ltd v Hodson  EWHC 1052 (TCC).
 See for example the somewhat withering remarks of Ward L.J. in Burchell v Bullard and the costs penalties imposed by Mr Justice Ramsey in Charles Church v Stent discussed at para.7-4 above.
 This includes cases allocated to the Small Claims Track.
 See Chapter 35 for comments about the Pre-Action Protocol process.
 The author knows this to be the case, since he was the original draftsman of the Protocol.
 Or, to put it another way, about 20 per cent of the likely cost of ADR.
 See para.7–29 below.
 A comment repeated in Roundstone Nuseries Ltd v Stephenson Holdings Ltd  EWHC 1431 (TCC) where the judge also noted that the fact that parties often caused the pre-action protocol to be protracted served to increase those costs.
 In Callery v Gray  1 W.L.R. 2112, CA Lord Woolf C.J. said at para.54: “Where an action is commenced and a costs order is then obtained, the costs awarded will include costs reasonably incurred before the action started, such as costs incurred in complying with a Pre-Action Protocol”.
 McGlinn v Waltham  EWHC 1419 (TCC).
 See para.7–32 below.
 For example, if the claimant is going to be looking for agreement for expert determination of some discrete valuation issues, he might in his pre-action letter be suggesting the essentially mechanical nature of the valuation issues.
 See para.7–6 above.
 Cundall Johnson & Partners LLP v Whipps Cross University Hospital Trust  EWHC 2178, TCC.
 Para.4.1 of the protocol at para.7–10 above.
 Para.4.2 of the protocol at para.7–10 above.
 The 2003 survey suggests that there are some instances of defendants seeking extensions they do not need in order to drag things out, and of claimants unreasonably refusing extension reasonably needed, but on the whole common sense prevails.
 Cundall Johnson v Whipps Cross-see above.
 See para.4.3.1 at para.7–10 above.
 See para.9–500 below.
 For example, if the claimant is going to be looking for agreement for expert determination of some discrete valuation issues, he might in his pre-action letter be suggesting the essentially mechanical nature of the valuation issues.
 See para.7–6 above.
 See para.4.4 of the Protocol at para.7–10 above.
 Sometimes, the audit clauses to be found within the contract may require one party to provide the other with certain classes of documentation. See Transport for Greater Manchester v Thales Transport & Security Ltd  EWHC 3717 (TCC).
 Briggs & Forrester v Southfields  EWHC 1734 (TCC); see also para.7–8 above.
 Gwelhayl Ltd v The Bailey Partnership  EWHC 2316.
 Senior Courts Act 1981 s.33(2) (and thus CPR 31.16) can only be invoked if it appears likely that the applicant would be a party to subsequent High Court proceedings. Travelers Insurance Co Ltd v Countrywide Surveyors Ltd  EWHC 2455 TCC.
 See para.7–34 below.
  EWHC 1258 (TCC).
 Comments echoed by Mr Justice Blair in resisting an application for pre-action disclosure albeit in the Commercial Court in Anglo Irish Bank Corporation Plc v West LB AG  EWHC 207 (Comm).
 See the 2003 survey.
 Caroline Cummins said this in her review of the 2003 survey: Generally, the responses indicated that the provision in the Protocol for a pre-action meeting is very helpful. Without the Protocol, it would have been difficult to persuade some of the other parties to meet to discuss the claims. A face-to-face meeting, particularly between clients, is very helpful and encourages constructive discussion. Alternatively it allows clients to let off a bit of steam so that later discussions become a little less emotionally charged. It also requires clients to address issues and focus upon the possible costs of proceeding to litigation at a very early stage. Even if the meeting is a “bun fight” useful information can follow from it. It is helpful because it enables parties to ensure that good claims or good defences to claims are made loud and clear to the people they most affect-the clients. It means that important information does not rest with intermediaries-the solicitors. However, in order for this to work, it is essential that a representative of the client who has some knowledge of the dispute and authority to settle attends the meeting along with an experienced solicitor charged with the conduct of the case. These meetings cannot or should not be delegated to junior staff-they are too important.
 If the parties cannot agree on such a solicitor, the Chairman of TeCSA will nominate someone.
 Roundstone Nurseries Ltd v Stephenson Holdings Ltd
 See para.4–46 above. The courts have occasionally made it plain that they would expect the meeting to lead to an agreement to mediate; see, e.g, Maggs t/a BM Builders v Marsh  EWCA Civ 1058, C.I.L.L. 2369, BAILLI.
 See para.4–50 above.
 See para.47–51 above.
 See para.5–3 above. In Paul Thomas v Hyland (see para.7.4 above), it weighed in favour of the defendants that they were prepared to agree to adjudication, notwithstanding the Housing Grants, Construction and Regeneration Act 1996 did not apply because they were residential occupiers.
 See para.5–210 above.
 See para.5–56 above.
 See Precedent 11–600 below.
 For example under CIMAR Rule 8 at para.11–570 below.
 This is easier said than done. It might be a little cynical to remark that arbitrators earn their livelihood from time-based charges, but there always seems to be some reason why procedures designed to shorten arbitrations fail to achieve their objective. The time of an arbitration can be reduced by adopting the Short Hearing procedure under CIMAR Rule 7, but arbitrators may baulk at using such a procedure in a complex case. Recoverable costs can be limited under CIMAR Rule 13.4, but that will not of itself stop cost escalation. A formula sometimes used in these circumstances is to adopt the TeCSA Adjudication Rules, but with the modification that the decision of the adjudicator be final and binding, and that is probably the most effective way of delivering a fair binding result at a reasonable cost.
 See para.5.3(v) of the Protocol.
 Anecdotal evidence suggests that courts will find their own ways of encouraging parties to try mediation. It is the experience of the authors that at least one judge, if ADR is not attempted, requires the parties to write to him in a sealed envelope explaining why a mediation has not taken place.
 At least, this was the experience of one respondent to the 2003 survey, see para.7–6 above.
 See para.9–404 below.
 Mr Justice Akenhead in the case of Orange Personal Communication Services Ltd v Hoare Lea  EWHC 223, also refused a stay in a case where there were two separate sets of proceedings. See para.7–5 above.
 Where, for example, there is doubt as to whether an arbitration clause has been sufficiently incorporated into the contractual arrangements, and where a party with a right to seek a stay of arbitration may yet nevertheless choose, after the service of Court proceedings, to allow those Court proceedings to continue.
 Following DGT Steel and Cladding Ltd v Cubitt Building and Interiors Ltd  EWHC 1584, TCC, if the parties have signed a binding agreement to submit disputes to adjudication they may be held to it. Accordingly, HHJ Coulson Q.C. stayed proceedings brought by DGT as the dispute which was the subject of the proceedings, had not been subject to adjudication as required by the contract. See para.5–46 above.