The new Pre-Action Protocol for construction and engineering disputes09 Nov 2016
A new edition of the Pre-Action Protocol for construction and engineering disputes has been published and is expected to come into force today, 9 November 2016.
The new Protocol applies to all construction and engineering disputes, including professional negligence claims against architects, engineers and quantity surveyors.
The new objectives of the new Protocol are to:
i) exchange sufficient information about the proposed proceedings, broadly to allow the parties 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, to consider the use of an appropriate form of alternative dispute resolution in order to do so.
The overall purpose of the new Protocol is to reduce the costs involved in compliance with a greater emphasis on proportionality. Parties are now encouraged to provide each other with an “outline” of its case before court proceedings are commenced. In particular, the requirement to keep the letter of claim simple and costs of both sides modest has been broadened to many cases, including those of modest value.
Further specific changes have been introduced to the new Protocol. The most noteworthy are as follows:
• The parties to the proposed proceedings can expressly agree in writing not to apply the Protocol. However, the default position is that the Practice Direction on Pre-Action Conduct and Protocols will still apply. It is difficult to say, at this stage, how this will work in practice;
• If proceedings are commenced, it is likely to be only in exceptional circumstances, such as flagrant or very significant disregard of the terms of the Protocol, that the court will impose costs consequences for non-compliance;
• The time limits under the Protocol have been shortened to streamline the pre-action procedure with the implementation of restrictions in respect of the parties’ ability to agree extensions of time;
• The introduction of a new Protocol Referee Procedure which is administered by the Technology and Construction Solicitors Association (TeCSA). The purpose of the Protocol Referee is to assist the parties in participating in and complying with the Protocol. A fee of £3,500.00 plus VAT is payable to the TeCSA upon making the application.