Pre-Action Protocol for Construction and Engineering Disputes 


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What is the Pre Action Protocol: Construction and Engineering?


The Pre-Action Protocol for Construction and Engineering disputes is a process which must be used in these types of disputes prior to Court proceedings being issued. It covers a variety of matters, for example, a claim for breach of a building contract. It also includes negligence claims against architects, engineers, and quantity surveyors (for which the Pre-Action Protocol for Professional Negligence should not be utilised).

The Protocol aims to encourage parties to a claim to exchange sufficient information before the commencement of Court proceedings in an attempt to narrow the issues, but also in the hope that matters will settle during the Pre-Action Protocol period or via Alternative Dispute Resolution (ADR). By settling in this period, parties will save time and the substantial costs of proceedings, as well as saving Court resources pursuant to the overriding objective.


Pre Action Protocol for Construction and Engineering Disputes: The Process


Letter of Claim – Before initiating proceedings, the Claimant should prepare a Letter of Claim to the Defendant. The key points in this document should be the Claimant’s full name and address, the Defendant’s name and address, a short summary of the claim that they are proposing and any relevant expert names. Moreover, the Claimant should also detail whether they would like the Protocol Referee Procedure to be enforced. (See below)  

The Defendant’s Acknowledgement – Within the next 14 days, the Defendant should acknowledge the Letter of Claim from the Claimant and establish whether they would like the Protocol Referee Procedure to be enforced. If they fail to respond, the Claimant can start proceedings.

If the Defendant intends to oppose any aspect of the claim, they should prepare a Letter of Objection.

The Defendant’s Letter of Response – Within this response, the Defendant should provide a concise summary of their response to the claims. Additionally, they should note the details of any relevant experts or third parties who have been instructed. If the Claimant does not receive the Defendant’s response within 28 days of receipt of the Letter of Claim, they can start proceedings.

The Claimant’s Response to Counterclaim – Over the next 21 days from the receipt of the Defendant’s response, the Claimant should reply to the Defendant’s counterclaim.

Pre-Action Meeting – Subsequent to the Defendant’s response (or the Claimant’s response to Counterclaim, if one has been sent), the parties should meet. This should occur within 21 days of either of the aforementioned. 

The main aim of the meeting is to allow the parties to identify the main issues in the matter and the most efficient method of resolving them. In some cases, this can be quite complex. If the parties cannot agree on a method of resolution, they should discuss other important areas of the matter, such as expert evidence and document disclosure.

In addition, the Court should be satisfied if this meeting takes the form of an Alternative Dispute Resolution (ADR) process, for example, mediation. 

Subsequent to the Pre Action Meeting – The Pre-Action Protocol for Construction and Engineering disputes will be finalised once the meeting has taken place. If a meeting was not held, the protocol will expire 14 days after when the meeting should have occurred.

At this point in the procedure, it is hoped that the matter will have settled, or negotiations will have begun. If they have not, and ADR has been attempted, Court proceedings should be commenced.

For many Construction and Engineering Disputes, the Technology and Construction Court (TCC) will be used.


What is the Protocol Referee Procedure?


As mentioned above, the Protocol Referee Procedure is a procedure which the parties can consent to in their initial communications.

It is an optional procedure which allows the parties to seek a referee from the chairman of the Technology and Construction Solicitors’ Association (TeCSA). The fee for a referee is £3,500 plus VAT.


Costs Consequences for Non-Compliance with the Pre Action Protocol

If either party fails to comply with the protocol, the Court can impose sanctions. It is unlikely that the Court will impose costs consequences unless a party has shown flagrant or very significant disregard to the protocol. In matters where this does occur, the Court can disallow any costs of premature issuance of proceedings.

Moreover, the Court may find it unsatisfactory if the parties have not attempted ADR. As the Court has limited resources, and pursuant to the overriding objective, only matters which require the urgent attention of the Court and cannot be resolved amicably, should be issued. If the Court can see that a case could have settled via another method, they will not look favourably upon the parties.


Recovering Legal Costs under the Pre Action Protocol for Construction and Engineering Disputes


The legal costs in a matter will completely depend on the type of dispute and complexity of the matter. Therefore, they can often be quite substantial.

Standard costs will usually apply in a Construction and Engineering dispute. However, if the Small Claims track has applied, the recovery will be limited to disbursements only.

The rule of thumb in most cases is that the winning party will be entitled to recover their costs from the losing party. In order to recover costs, the winning party will require a bill of costs to detail the level of costs they wish to claim. The process of detailed assessment will then be used to negotiate costs until parties agree upon the final amount which should be awarded to the winning party. If costs cannot be agreed between parties, assistance from the Court may be required in the form of detailed assessment proceedings.

Currently, there are discussions for fixed costs to cover all civil cases up to £100,000 in value. If this does happen, there will be large implications on legal costs recovery.


How can ARC Costs Assist?

As demonstrated above, the Pre-Action Protocol for Construction and Engineering disputes can involve complex disputes. In order to ensure that your costs can be recovered effectively, we can provide advice in regard to your retainer with the client, and appropriate hourly rates to set. It is important that any case is well-organised from the outset to ensure that your reasonable charges can be recovered on a successful conclusion.

As the claim progresses, you may require a Costs Budget or Bill of Costs. Our team are highly experienced in drafting and negotiating these documents, and typically we recover 75% of non-budgeted cases, and up to 90% on budgeted cases on recovery.

As independent Costs Draftsman and Costs Lawyers, we can also advise Paying Parties on any Bill of Costs received to minimise their costs exposure.  If you are the unsuccessful party to this type of case, you may require assistance with negotiating the bill of costs to reduce your costs liability, or in preparing your Points of Dispute.

If you would like to find out more, please contact us via or call one of our costs experts on 01204 397302.

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