Pre-Action Protocol reforms
4th April 2022
The Civil Justice Council (CJC) has consulted on proposed reforms to Pre-Action Protocols (PAPs) in England and Wales (including Construction and Engineering’s second edition (C&EPAP)) as published in its Interim Report (Report). Respondents were asked to consider the role of PAPs in an increasingly digitalised justice system.
PAPs were intended to embed proportionality, greater economy and greater efficiency into litigation and reduce adversarial conduct. They have become a mechanism to help parties identify the “parameters of their dispute, facilitate dispute resolution efforts and help prepare the case for litigation should that become necessary”. They are not compulsory but non-compliance can affect case management directions or mean costs consequences or a stay of proceedings.
The CJC’s pre-consultation survey indicated that most court users believe PAPs achieve partial success in promoting cooperation, facilitating pre-action settlement/ADR, narrowing issues, reducing costs and promoting efficient case management. Minor reforms were called for, however, mainly to address non-compliance and inconsistent court enforcement/sanctions.
The CJC’s proposed reforms include:
- mandatory PAP compliance except in urgent cases;
- online pre-action portals;
- converting the existing PD-PAC into a “General Pre-Action Protocol (Practice Direction)” (G-PAP) that would require cooperation to achieve the overriding objective and parties to take “three sequential steps”, within extendable timeframes, before issuing proceedings: early exchange of information; a mandatory good faith obligation to try to resolve/narrow the dispute; and, if there is no resolution, a “stocktake” of parties’ positions and disclosure – set out in a joint report to be appended to the statement of case;
- a proportionate sanctions regime for non-compliance (to promote a culture of co-operation and routine compliance);
- “concrete incentives” for compliance, including summary costs procedures for cases settling pre-action; and
- streamlined litigation processes (in particular, disclosure and pleadings) to limit duplication of pre-action processes post issue for parties who engage in PAP processes appropriately (ensuring the benefits of “frontloading” are transferred to the litigation process).
The following underlying principles would remain applicable to all PAPs: litigate as a last resort; exchange information early; behave reasonably and proportionately; and negotiate in good faith.
While broadly satisfied with the C&EPAP, which was reviewed only five years ago, the CJC proposed that it: remain applicable to construction disputes; be aligned with the G-PAP’s timeframes including the scope for time extensions; and contain no right to opt out of the pre-action process. The CJC also sought views on whether to retain the referee procedure for determining compliance disputes with the C&EPAP, and whether to incorporate a standard for disclosure − and, if so, what.
The C&EPAP already includes provisions akin to a good faith obligation and a requirement to report to the court on WP meeting outcomes. Most construction parties and lawyers appreciate that pre-action engagement is commercially advantageous and often agree to extensions to enable information sharing.
However, few want to spend heavily on disclosure up-front (even if disclosure preparation could be utilised later in the litigation). In document-heavy, technical construction disputes, parties must balance the need for adequate disclosure (to facilitate settlement) against proportionate disclosure, available budgets and wasted costs/time.
In our experience, pre-action ADR with an independent facilitator usually leads to more frank, commercial discussions which rarely turn on exhaustive disclosure. Parties are considerably more open in private, ADR proceedings − where exchanges are confidential − than in non-facilitated WP PAP meetings (which rarely conclude successfully). Stronger PAP enforcement and summary costs proceedings will help bring parties together but without pre-action facilitated ADR, there is less chance of settlement.
Written by Tracey Summerell and Akin Akinbode of Dentons, and shared with permission.
This article was published in Construction Law as the ADR Column on 2 February 2022, and on 28 March 2022 on the Dentons website. View the original article here.
