Stocktake – that is what the Pre-Action Protocols say.
The Pre-Action Protocols set out the steps parties should take before starting court proceedings. The aim is to avoid the need for court proceedings altogether but if that does not work, reduce the costs. There are thirteen approved Pre-Action Protocols in specialist areas, such as professional negligence or construction disputes.
If your dispute falls outside the scope of an approved protocol, for example a general contractual dispute, you have to follow the Practice Direction on Pre-Action Conduct. Failure to follow the substance of the Practice Direction can have significant consequences. You may have to pay all or part of the costs of the proceedings or interest at a higher rate. Alternatively, you may not be awarded interest or only at a lower rate.
The Practice Direction and a few of the Pre-Action Protocols were revised recently.
They continue to stress that proceedings should be a last resort. But there is a focus on the need to take reasonable and proportionate steps to identify, narrow and resolve the issues. You must not use the pre-action steps as a tactical device to secure an unfair advantage over another party.
If you have a contractual dispute, you should consider the points below before starting court proceedings:
- Write to the defendant with concise details of the claim. This should set out the basis of the claim and a summary of the facts.
- Give the defendant a reasonable time to reply – 14 days in a straight forward case and no more than 3 months in a very complex one. The reply should set out which facts and parts of the claim are accepted or disputed and the details of any counterclaim.
- Consider disclosing or asking for key documents.
- Be prepared to consider negotiation or Alternative Dispute Resolution (ADR) to help settle the dispute. The court may want to see evidence that the parties have considered ADR.
- Do not ignore a request to mediate or participate in other forms of ADR. If you do, the court may consider this unreasonable and you may be ordered to pay additional costs.
- Stocktake. Even after going through a protocol procedure, review your position. Consider whether proceedings can be avoided. At the very least, try to narrow the issues in dispute.
It may seem that a pre-action phase is lengthy. But it is not lost time. It is an opportunity to set out your case and even narrow the points in issue. By taking stock at every opportunity you may even be able to bring the dispute to a conclusion, without issuing a claim form.
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