Pre-Action Conduct Flashcards
What are the Pre-Action Conduct and Protocols?
Certain pre-action steps that parties are expected to take before commencing court proceedings.
What is the Pre-Action Practice Direction?
Applies to disputes not covered by a specific protocol.
Courts expect parties to follow the relevant pre-action protocol or, if none, the Pre-Action Practice Direction, before issuing a claim with the court.
What is the Overriding Objective (CPR r 1.1)?
“To deal with cases justly and at proportionate cost.” Parties are required to help the court to further the overriding objective.
- Saving expense
- Dealing with the case in ways which are proportionate
- Ensuring that the case is dealt with expeditiously and fairly
- Allotting an appropriate share of the court’s resources to the case, while taking into account the need to allot resources to other cases
- Enforcing compliance with rules, practice directions and orders
What is the Pre-action Conduct objective?
The courts aim to promote the early resolution of disputes without parties needing to resort to litigation.
If this is not possible, the processes set out in the PDPAC will at least:
a) facilitate the sharing of information
b) enable the parties to have a better understanding of their opponent’s position and
c) narrow the issues in dispute.
What is the exception to requiring pre-action conduct?
Exception - impending limitation deadline
Claimant with a limitation deadline or otherwise has to act urgently (e.g apply for an interim injunction, a need to freeze assets) will not be expected to comply with the PDPAC before issuing the claim
When does alternative dispute resolution (ADR) take place?
Courts are keen on encouraging parties to consider ADR seriously before commencing proceedings. Examples - mediation, arbitration, early neutral evaluation and ombudsmen schemes. Parties may be required by the court to provide evidence that ADR has been considered.
What are the consequences for a party not complying with pre-action conduct and protocols?
If proceedings are commenced immediately, the court may enforce possible cost sanctions. The case may even be struck out.
What is the role of a letter of claim in pre-action conduct?
A letter of claim is first sent by the claimant to the prospective defendants/s. This should be a genuine attempt to avoid proceedings and should:
- State the basis of the claim
- Include a summary of the relevant facts
- State what remedy the claimant is seeking (if money, how it is calculated) and
- Disclose any key documents that the claimant will rely on
What happens if a defendant is silent or is negative/obstructive when replying to a letter of claim?
A negative response to a Letter of Claim or ADR proposal may be considered unreasonable and result in costs sanctions.
How should a defendant respond to a letter of claim?
Prospective defendant should reply to Letter of Claim within a ‘reasonable time’ - no more than 3 months even in a complex case. In a straightforward case, a specified reasonable time could be as little as 14 days. Should include:
- Confirmation as to whether the claim is accepted
- Reasons why it is not accepted
- Explanation as to which facts and parts of the claim are disputed
- Details of any counterclaim the defendant wishes to make
- Disclosure of key documents the defendant relies on
What is pre-action correspondence?
Usually no more than one exchange of letters.
PDPAC provides that C should send a Letter of Claim to D and D should provide a substantive response.
Lengthy pre-action correspondence could take place due to
a) difficulties in investigating certain facts,
b) availability of relevant parties,
c) substantial volume of evidence to consider,
d) involvement of experts
What will happen if there is a response suggesting settlement?
Unless it is necessary to issue the claim earlier (for example, to avoid the claim becoming time-barred), if there is a response suggesting settlement…
… the claimant should not commence proceedings until 6 months after the letter of acknowledgment – this is the negotiation period.
What is meant by the negotiation period (to settle)?
Parties may be in a position to negotiate a settlement during the pre-action steps. They should conduct settlement discussions on a “without prejudice” basis, meaning neither party can use the settlement discussions or correspondence as evidence in court.
A party may also make a Part 36 Offer during negotiations. Failure to decline the Offer may have cost consequences.
What is the pre-action protocol for personal injury claims?
1) Process for early appointment of an expert
2) Parties should discuss any needs of C that could be met by medical treatment or rehabilitative measure
3) Includes templates for letter of claim, letter of response and letter of instruction to a medical expert.
Is there a pre-action protocol for breach of contract claims?
No. Breach of contract claims will not fall within a pre-action protocol. The Pre-Action Practice Direction should be followed.
Is there a pre-action protocol for debt claims?
Yes. Applies to any business claiming payment of a debt from an individual (including a sole trader). Protocol does not apply to B2B debts unless the debtor is a sole trader
Is there a pre-action protocol for professional negligence claims?
Yes. Applies to claims against professionals as a result of negligence or an equivalent breach of contract or breach of a fiduciary duty
The Pre-Action Protocol for Professional Negligence states that, as soon as the claimant decides there is a reasonable chance that they will bring a claim against a professional, they should notify the professional in writing – the preliminary notice. A letter of claim should follow if, following advice, the claimant decides to proceed.
N.B: Where a later statement of case differs materially from the letter of claim, the court may decide to impose sanctions
How does the court review compliance with the pre-action protocol?
The court is concerned with substantive compliance rather than technical infringements. The spirit, if not the letter, of the protocol should be followed and the parties should act reasonably.
How is the pre-action protocol followed if there is limitation deadline?
Where C is forced to issue proceedings early in order to avoid their claim becoming time-barred, the parties should seek a stay of the claim to allow them time to follow the PDPAC.
What are the principal sanctions for non-compliance of a party with the pre-action protocol?
Costs sanctions:
- An order that they pay some, or all, of the costs of other parties
- An order that they pay such costs on a indemnity basis
- Depriving successful C of interest and/or awarding interest at a lower rate and / or
- Applying a higher rate of interest than would otherwise have been awarded (not exceeding 10% above base rate) on sums to be paid by D
Other notable sanctions:
- Striking out a party’s statement of case (e.g defence) for failing to comply with PDPAC
- Being subject to proceedings for contempt of court if false statement is knowingly made in a pre-action letter or other document prepared in anticipation of legal proceedings
What is pre-judgment interest?
An additional payment to be made by the defendant to account for the period of time between the occurrence of the defendant’s wrongdoing and the rectification of this wrong by the Court’s damages order.
