This judgment arose out of an application by the remaining defendant in the claim, for a stay of the proceedings pending the implementation of the process laid down by the pre-action protocol for construction and engineering disputes.
The claimant engaged Kier Regional Ltd to carry out the fitting out works to its building, which included the provision of an air conditioning system. Kier sub-contracted amongst other things, the provision of the air conditioning system to Haden Young Ltd. The claimant also engaged the defendant to carry out certain professional services in relation to the design of the mechanical and electrical works including the air conditioning system.
A flood occurred which caused damage to the claimant’s equipment in the building. The claimant issued proceedings for damages against Kier and Haden in relation to the flood. Both Kier and Haden denied that they were responsible for any bad workmanship and insofar as the claimant suffered loss and damage, they claim that it was contributable to the claimant and its design team.
To avoid limitation issues, the claimant issued proceedings against its design team. However, the claim against the defendant was contingent on the failures of Kier and Haden being established.
The defendant applied for a stay on the basis that the claimant had not followed the protocol.
The issue before Mr Justice Akenhead related to the extent to which it was appropriate for the court to adopt a pragmatic approach in relation to compliance with the protocol.
Reference
Given that the two claims were intimately connected, the judge was reluctant to delay the trial further to enable the protocol process to take place, as it would be undesirable in terms of cost, time and resource.
It was held that the claimant did not comply with proper practice. Although, given the impending limitation difficulty, the claimant was excused from commencing the protocol process before issuing the claim, the court held that there was no valid excuse why the claimant did not tell the defendant about the issue of the claim much earlier. The claimant should have also informed the other parties and the court when agreeing and presenting agreed directions to the court that there was a probability that a new party would be added.
Although the defendant lost the application, it was Mr Justice Akenhead’s view that the defendant had no choice but to issue the application and it was a reasonable application to bring. As a result, the claimant was ordered to pay their own costs of the application and one third of the defendant’s costs occasioned by the claimant’s procedural failings.
*Full case details: Orange Personal Communications Services v Hoare Lee (A firm) [2008] EWHC 223 (TCC) 12 February 2008, Mr Justice Atkenhead
Postscript
While the protocol is recognised as being effective both in settling disputes before they even arrive at court and narrowing the issues, it is also seen as being costly on occasion and can enable parties to delay matters without taking matters very much forward.
While the norm must be that parties to litigation do comply with the protocol requirements, this case illustrates that the court will look at non-compliances in a pragmatic and commercially realistic way. Parties should note however that non-compliances will be compensated by way of costs orders.
