The pre-action protocol is three years old. So do we crack open the bubbly – or keep quiet and hope nobody will mention it? A new survey might help us decide
It is three years since the Construction and Engineering Pre-action Protocol came into force. Its laudable purpose was to encourage parties involved in disputes to avoid litigation or, where this could not be avoided, to ensure that everyone knew what they were getting themselves into.

To mark the anniversary of the launch, the Technology and Construction Solicitors Association has carried out a survey to find out how successful the protocol has been in achieving its objectives.

The results of that survey were presented at TeCSA's recent conference "Improving Methods of Dispute Resolution for the Construction Industry" at which His Honour Judge Humphrey Lloyd made a guest appearance.

The response to the survey was somewhat disappointing. There were 33 responses to the main questionnaire and four members of the judiciary responded to a related questionnaire that covered much the same ground. However, in view of the declining number of disputes that end up in court these days, the size of the response is probably unsurprising. So what are the messages that come through?

A central feature of the protocol is the requirement for a claimant to explain its case in a detailed letter of claim. The defendant then has 28 days to respond – although the parties can agree to extend that period up to four months.

It is clear that those acting on behalf of claimants and defendants have significant reservations about this aspect of the process. Those representing defendants are concerned about the lack of clarity and detail provided in the typical letter of claim. Indeed, it seems that in some cases letters of claim are sent out by parties as a try on without any real intention of pursuing the matter. Conversely, those representing claimants are concerned about constant requests from defendants for further information, which they view as either a fishing expedition or an attempt to drag matters out.

Claimants are concerned about constant requests for information, which they view as a fishing expedition

On both sides of the fence there is concern about the front-end loading of costs that compliance with the protocol necessarily involves: bear in mind that the cost of going through the hoops can be as much as £300,000.

One of the unique features of this protocol is that it expressly encourages the parties to attend a pre-action meeting. Indeed, the good news is that there is evidence in the survey that the protocol is helping to bring parties to the negotiating table, and a successful outcome has frequently been achieved at the time or soon thereafter. Some respondents suggest that this meeting can, unless properly structured, degenerate into a bun fight and in order to prevent this, parties have in some cases engaged an independent mediator or facilitator to assist.

Perhaps the single most important message that comes out of the survey, and this was a point that Judge Lloyd indicated that he would be exploring with his colleagues, is that the cost sanction aspect of the protocol does not seem to be working effectively. The theory is that a party that refuses to comply with the protocol procedure should be punished by subsequent cost orders from the court. However, in practice, what seems to happen where the protocol does not work is that, since it is essentially a without-prejudice process, it is difficult, if not impossible, for the parties to pursue a claim for costs. Understandably, the court is reluctant to dig beneath the surface unless it is invited to do so.

It will be interesting to see what, if anything, comes from the results of this survey. I suspect that if the judges in the Technology and Construction Court do adopt a more inquisitive approach about pre-action matters, parties will be more forthcoming about their experiences, thereby giving the judges the ammunition to lay down the law through the appropriate application of cost sanctions.