NEW Pre-Action Protocol for Construction and Engineering Disputes

In October 2016, a new Pre-Action Protocol was announced by the Technology and Construction Bar Association (TECBAR) and the Technology and Construction Solicitors Association (TeCSA). The new Protocol will come into force on 9 November 2016 and will apply to all construction and engineering disputes including building and construction disputes; claims by or against engineers, surveyors and architects; and claims relating to the quality of materials used or work undertaken.

It has been 16 years since the last Pre-Action Protocol came into force (October 2000) and 9 years since it has been amended (2007). Several changes have been introduced by the new Protocol.  The main thrust of the changes is to reduce the amount of information which needs to be provided at the Pre-Action stage in order to keep the costs proportionate. The original ethos of the Protocol was to encourage an early exchange of information in order to facilitate an early settlement. Over recent years this has been subject to abuse with Claimants bombarding the proposed Defendants with information and incurring a disproportionate level of costs before commencing proceedings.  The parties have often ended up in a secondary dispute over whether the parties have adequately complied with the Protocol.  The aim of the changes is to simplify the procedure to enable the parties to gain a sufficient understanding of the claim in order to facilitate an early settlement at a reasonable cost.  We have summarised the main changes below: –

1. The parties may consent by agreement in writing NOT to use the Protocol.

2. The parties need only exchange “sufficient” information to allow the parties to understand each other’s position and an expert report is no longer expected. Previously the parties had to provide full information.

3. The Letter of Response is still due to be issued by the potential Defendant within 28 days but this can only be extended by a further 28 days. The parties cannot agree to extend any deadlines beyond 28 days in the aggregate. This should speed up the pre-action procedure prompting an early settlement meeting and giving the Claimant the option to commence proceedings in default.

4. The new Protocol limits the powers of the courts to impose costs sanctions for non-compliance. Costs sanctions can now only be imposed in exceptional circumstances “such as flagrant or very significant disregard” for the terms of the Protocol.

5. In “many cases, including those of modest value”, the Letter of Claim and the Response must be kept simple. This previously only applied to lower value claims.

6. The main change introduced by the revised Protocol is the new Protocol Referee Procedure.  This Procedure enables the parties to seek advice on compliance with the Protocol from an independent referee.  The aim of this process is avoid disputes between the parties regarding whether the parties have correctly complied with the Protocol.  If there is a dispute regarding alleged compliance or non-compliance then the parties can invoke the Referee Procedure.  We have summarised how the Procedure works below.

Protocol Referee Procedure – Key Points

1. If the parties have agreed that the Procedure shall apply, either party may apply to the Chairman of TeCSA for the nomination and appointment of a Protocol Referee. The application shall be accompanied by an Application Fee of £3,500 plus VAT. The application shall set out briefly details of the directions sought.

2. Once a Referee has been appointed, the Respondent shall submit a response to the application.

3. The Protocol Referee shall reach a decision no later than 10 working days after the receipt of the appointment setting out any appropriate directions for future conduct of the Protocol process; and/or whether there has been non-compliance with the Protocol and, if so, whether the non-compliance demonstrated a “flagrant or significant disregard for the terms of the Protocol” and, if so, to what extent.

4. The decision is binding and must be complied with until the dispute is determined by legal proceedings or by agreement. In legal proceedings, the Court shall give due weight to the decision of the Protocol Referee but shall not be bound by it.

5. The Referee has jurisdiction to order the Respondent to reimburse the Applicant for the Application Fee. In subsequent proceedings the costs of the Application will be costs in the case.  This means that the losing party will, as a normal rule of thumb, be ordered to pay the Application Fee.

It will be interesting to see whether parties use the Referee Protocol in practice.  Given the size of the Application Fee, it is possible that the Protocol will only be adopted in relation to high value and/or complex disputes.  Particularly in light of the simplification of the pre-action process introduced by the new changes.

The new revised Pre-Action Protocol for Construction and Engineering Disputes was prepared jointly by TECBAR and TeCSA and was unveiled on 2 November. It is expected to be in force from 9 November 2016.

The new Pre-Action Protocol is available to download from

If you have any queries in relation to the new Pre-action Protocol or any general Construction and Engineering queries then please do not hesitate to contact Katherine Sibley on 01228 552600 or 01524 548494.

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