The new Pre-Action Protocol for Construction Disputes is to be welcomed. But it won’t stop some litigants from giving the other side the runaround.
For those of you who missed the appearance of the new Pre-Action Protocol for Construction Disputes, which came into force on 6 April, you can probably be forgiven, so quiet has been the accompanying fanfare. But remember, this is the document that regulates the conduct of all construction disputes before the commencement of formal proceedings.
The changes have come about as the result of a working party review. This was set up by the Technology and Construction Court and in its January 2006 interim report, after consultation with court user groups, it identified certain questions about the old protocol.
These included whether:
- The maximum period for responding to claims letters (and counterclaims) was too long
- There was a need to provide for recovery of costs at the protocol stage or to apply a limit to those costs
- There should be a process to assist if there was a lack of co-operation between the parties on documents and information
- There should be some procedure for including third parties in the process
- There should be limited court involvement in the protocol process on certain issues.
- Requires the costs of the protocol stage to be proportionate to the complexity of the case and the amount of money that is at stake (1.5)
- Reduces the maximum period for the defendant to respond to the letter of claim from four to three months (4.3.1)
- Requires the protocol meeting to take place within 28 days of receipt by the claimant of the response (5.1)
- Recognises that no party can or should be forced to mediate or use any other form of alternative dispute resolution (5.4)
- Requires parties to consider more carefully how expert evidence is to be dealt with (5.5i)
- Enables parties to the protocol meeting to be required to disclose to the court details of that meeting (5.6), including whether alternative means of resolving the dispute were considered or agreed (5.6v).
More careful consideration of how expert evidence is dealt with will also help. Some might consider the express recognition that parties should not be forced to mediate or use other forms of alternative dispute resolution unhelpful in that it could fortify parties who are not prepared to try and resolve disputes outside the court. Refusing to mediate can still result in adverse costs orders.
It is not clear how parties to protocol meetings are going to be required to disclose matters to the court in practice.
There is no new process for dealing with parties that won’t play ball, nor has there been provision for accommodating third-party issues in the protocol
The really important changes, then, are the reduced time to respond to letters of claim, which will limit costs simply by shortening the process, and the new 28-day deadline for holding the protocol meeting.
Some of the issues mentioned in the interim report have inevitably not made it through to the final document.
There is not going to be any increased court involvement in the process and parties will still able to run amok until they come in front of a judge at the case management conference. There is no new process for dealing with parties that won’t play ball, nor has there been any provision made for accommodating third-party issues into the protocol process overall.
To be fair the interim report did emphasise that the matters raised were intended to stimulate debate and made no promises as to what would end up in the protocol. It did, however, seem to suggest that there would be further debate, and I have seen little evidence of this, unless what was meant was the stimulation of debate among members of the working party.
By and large the changes to the protocol are to be welcomed. On the other hand, I don’t think they will stop prospective litigants from giving the other side the runaround if they are hell-bent on doing so.
Has it then been something of a missed opportunity in terms of really beefing the protocol up? It deserves something like Ian Duncan Smith’s welcome from the Labour backbenchers after the infamous “quiet man” comment – a loud “shhhh”.
Some good ideas that were being canvassed at the interim report stage seem to have become lost in translation …
Nick Lane is a construction lawyer at Olswang: firstname.lastname@example.org