Reform of pre-action protocols
Andrew Morgan reviews the Civil Justice Council’s proposed general pre-action protocol
In November 2021, the Civil Justice Council (CJC), the body responsible for overseeing the modernisation of the civil justice system, published an interim report concerning pre-action protocols (PAPs).
As it stands, there are over 15 PAPs. There are specific PAPs tailored to govern pre-action conduct of specific civil claims from package travel to housing to judicial review claims. There is also a general PAP to govern conduct of all other claims.
The CJC’s report invited consultation on reform options for general reforms and for reforms of specific PAPs. This article focuses on the option of a new general PAP (Proposed General PAP).
Proposed General PAP
The Proposed General PAP aims to encourage early exchange of information between parties, provide a framework for early resolution and to narrow the dispute so any proceedings can be resolved more quickly and at lower cost.
These objectives largely reflect those at paragraph 3 of the existing general PAP. However, the report breaks from the status quo in relation to the steps needed to meet those objectives.
The Proposed General PAP sets out a three-step roadmap for parties to complete before issuing proceedings:
1. Early exchange of information
The claimant must provide the defendant with a letter which concisely sets out the details of the claim. Subject to any extension, the defendant must then respond to the claimant’s letter within 14 days.
2. Good faith obligation to try to resolve or narrow the dispute
Parties must initiate a good faith step (for example, inviting the other party to mediation) within 14 days of receipt of the defendant’s letter of reply. Subject to any extension, any dispute resolution process must be completed within eight weeks of receipt of the defendant’s letter of reply.
Assuming settlement is not possible, then, subject to any extension, within 14 days of completion of step two, the parties must complete a joint pre-action report (stocktake report). The stocktake report must be filed with the claimant’s opening statement of case, and concisely set out:
· The issues on which the parties agree and disagree;
· The parties’ position on the issues on which they disagree;
· A list of disclosed documents, and a list of documents the parties wish to be disclosed.
Under the existing general PAP, "the court will expect the parties to have complied with a relevant pre-action protocol or this Practice Direction" and the court may impose sanctions. One of the most common complaints arising from the report’s preliminary consultation was the "considerable variation in the courts' enforcement of PAPs, and too often no sanctions were imposed for non-compliance".
Under the Proposed General PAP, compliance is mandatory “except in urgent cases” such as an upcoming limitation deadline. Where a party fails to comply with a protocol (which would include acting "unreasonably in such a way as to undermine the objectives of the protocol"), the court may order sanctions, such as cost consequences and striking out a claim or defence. The principles governing the decision whether to order sanctions derive from Denton v White  EWCA Civ 906 in relation to relief from sanctions under CPR 3.9, i.e. the court will consider whether the breach was serious or significant, whether there was a good reason for it, and all the circumstances of the case.
Overall, there is no revolutionary sea change. While compliance is mandatory, non-compliance would not automatically entail sanctions. The court may well take a stricter approach, particularly in light of the prescriptive three steps, yet this remains to be seen.
The existing general PAP expects a defendant’s letter of reply within “… 14 days in a straight forward case and no more than 3 months in a very complex one”. The Proposed General PAP would reduce this to 14 days (or 42 days if further time is needed). The parties remain able to extend deadlines.
The existing general PAP expects disclosure of “key documents relevant to the issues in dispute”. Given the potential ambiguity, the Proposed General PAP would require pre-action correspondence to enclose “key documents on which the parties rely in support of their claims or defences… and that are necessary to enable the other parties to understand the claim or defence they have to meet”. This wording overlaps heavily with the scope of Initial Disclosure under Practice Direction 51U’s disclosure pilot.
Good faith obligation
The existing general PAP expects parties to engage in alternative dispute resolution (ADR). The Proposed General PAP requires the parties to do so, but it does not prescribe how.
The requirement of ADR was somewhat surprising in circumstances where the requirement to engage in ADR is the subject of ongoing review following the CJC’s Mandatory ADR report in June 2021. It is notable the master of the rolls’ lecture on 17 March 2022 concerning the ‘Future of Dispute Resolution: Horizon Scanning’ indicated the “whole system will be focused on resolution… continuous mediated interventions will be integrated into the whole digital justice system, making use of every available kind of dispute resolution…”. The Proposed General PAP may be beginning movement down that path.
The proposed stocktake report is a new invention without an existing counterpart. It aims to encourage an assessment of the distances between the parties before proceedings are issued, and to streamline case management by providing a clear outline of the issues to be resolved.
What remains unclear is the extent to which parties may adopt positions in formal pleadings that are different to their pre-action correspondence (as summarised in the stocktake report). The CJC invites consultation on the point.
Subject to the precise effect of the stocktake report, significant front-loading of costs is foreseeable, with parties treating pre-action correspondence like formal pleadings. The stocktake report would not apply to claims valued at £500 or less, but this would hardly prevent disproportionate costs from being incurred in modest value claims above £500. Although pre-action costs may increase, it is hoped more focused pre-action correspondence (which has a bearing on case management) may save costs of the overall proceedings.
Options for reform
The CJC’s report provides options for reform, the details of which may change shape before implementation (if that implementation occurs at all). The CJC’s consultation closed in January 2022.
As the CJC itself concedes, a one-size fits all approach cannot apply to litigation. A single general PAP will struggle to appropriately govern pre-action conduct of claims spanning trusts and probate disputes to commercial contract disputes. Objections are inevitable.
Notably, the Law Society’s December 2021 response was against the reforms. It asserted the existing protocols worked sufficiently well, issues stem largely from a lack of awareness and enforcement and other changes should be given time to bed in before moving the goalposts on pre-action conduct.
Overall, the Proposed General PAP is a step in the right direction. A more prescriptive and mandatory regime should provide certainty to the parties and suitable conditions for consistent enforcement by the court. The reforms are largely evolutionary, and appear part of a wider reform programme, including increasing digitisation as mentioned in the master of the rolls’ recent lecture.
Moving forward, there are three key spaces to watch:
· The effect of the stocktake report on the parties’ position in proceedings;
· Whether the court would take a stricter approach to pre-action conduct; and
· The relationship between these reforms and other proposals and evolving rules, notably the evolution of the disclosure pilot (given the overlap of pre-action disclosure and initial disclosure) and the ongoing consideration of mandatory ADR.
The CJC will review the responses and publish recommendations in a final report, which should shine a light on these same issues.
Andrew Morgan is an associate at Russell-Cooke Russell-cooke.co.uk