Understanding the Pre-Action Protocol for Construction and Engineering Disputes

As a business owner, it is possible that, at some stage, your company may face a commercial dispute. This applies, for example, if you run a business in the construction or engineering industry. In addition, if you work as or with an engineer, architect or quantity surveyor, you could face a professional negligence claim. If you fall into a business dispute, you should try to resolve it using an alternative dispute resolution (ADR) method. However, you may decide that commercial litigation is your only option. If so, you must understand the pre-action protocol for construction and engineering disputes. This is a legal requirement before legal proceedings, and not following it can have cost consequences. This article will help you understand the pre-action protocol for construction and engineering disputes. 

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What is the Pre-Action Protocol for Construction and Engineering Disputes?

The pre-action protocol for construction and engineering disputes is one of many pre-action practice directions in the Civil Procedure Rules.

Pre-action protocols detail the procedure before issuing a claim for court proceedings for a dispute. Therefore, this type of pre-action protocol is for a:

• construction dispute;
• engineering dispute; or
• professional negligence claim with an engineer, architect or quantity surveyor.

Pre-action procedures are applied to help parties avoid litigation and resolve the problem.

Why Should I Follow the Pre-Action Protocol Procedure?  

It is a legal requirement that you follow the pre-action protocol procedure, and failing to do so will be considered by a court in any later legal proceedings having potential financial implications.

When you follow the pre-action protocol procedure for construction and engineering disputes, there is a timeline of actions to take. This includes, for example, a party:

• serving a pre-action protocol letter of claim;
• issuing a letter of response; and
• attending a pre-action meeting.

For more details on pre-action protocols, the different procedures and a guidance timeline, see our article on Pre-Action Protocol for Construction and Engineering Disputes: Legal Guidelines.  

How Do I Write the Letter of Claim?

If you are a claimant in a construction or engineer in dispute, you must start by writing a letter of claim, which is proportional to the claim’s complexity and value. This should summarise the claim and explain the situation. 

For example, it will include:

• details of those involved in the dispute;
• legal or contractual provisions that are relevant to your case;
• give a ‘proportionate breakdown’ of the relief you wish to claim;
• if you wish to appoint experts and provide details on these; and 
• whether or not you want to apply the protocol referee procedure.

Remember that a letter of claims is not confidential, so if you go on to commercial litigation, you may refer to this. 

How Do I Write a Letter of Response?

If you are the defendant in a construction or engineering dispute, you will end up writing a letter of response to the letter of claim. Again, this should also be a proportionate letter and mention any experts you wish to reply to. 

A letter of response should also detail:

• if you accept or reject each claim and why; 
• a counterclaim to the claim if you have one, and 
• confirm that you have told your insurers about the dispute, although you do not have to name them here.

What Happens in the Pre-Action Meeting?

When you and the other party have a pre-action meeting after serving your letters to each other, it is up to you to decide the format. For example, you may choose mediation. However, the meeting is a non-prejudice meeting, so it will not be mentioned in any court proceedings bar minor details, such as that it took place and whether both parties attended. 

When you hold a pre-action meeting, you do so to:

• specify the exact issues in dispute;
• examine each for the cause; and
• try to find a way to settle the dispute without using litigation.

However, if you cannot settle the dispute at this stage, you should agree that you will ensure that costs are proportionate when resolving the case. This is in line with the objective of Civil Procedure Rule 1.1. If you decide court proceedings are the only option, you should use this meeting to discuss these going forward. For example, to discuss how you will conduct these and if you will likely need expert evidence.  

Key Takeaways

The Civil Procedure Rules details the pre-action process for construction and engineering disputes.  It specifically applies to claims in these fields and some professional negligence claims in these areas. You must follow the procedures in the pre-action protocol as it is a legal requirement and helps to avoid court proceedings. The procedure you must follow includes a timeline for actions such as writing a letter of claim or letter of response. 

When issuing a letter of claim, for example, you must remember to ensure it is in proportion to the claim including in its legal provisions you rely on. If you are writing a letter of response, you should say what claims you accept or reject, for example. As a party to a construction or engineering dispute, you will need to attend a pre-action meeting to discuss the issues. This aims to find a resolution which avoids commercial litigation. 

If you need help understanding the pre-action protocol for construction and engineering disputes, our experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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