Taking the spirit of pre-action?

The pre-action protocol was initially introduced to aid a speedy and costs- proportionate approach to dispute resolution in professional negligence claims, but does it deliver?

The protocol's aim was to save expense in resolving disputes and to deal with cases proportionately to the sums claimed, the importance of the case, the complexity of the issues involved and the financial position of the parties. It was thought that this could be achieved by providing for an 'early exchange of information, so that the claim can be fully investigated and, if possible, resolved without the need for litigation'.

Expert evidence

Most practitioners will agree that
at the heart of many professional negligence cases is generally the expert evidence. The key to being able to resolve the dispute early is to provide some exchange of material evidence, such as expert information and evidence, and to encourage expert involvement, discussion and determination earlier on in the dispute resolution process. While the pre-action protocol encourages this, it 'does not dictate a standard approach…it envisages that the parties will bear the responsibility for agreeing how best to use experts'.

Furthermore, the guidance notes state that 'no party is obliged…to disclose any document which a court could not order them to disclose in the pre-action period'. Parties also may assert privilege over any initial advice provided by any experts in any event. So while most parties will act as required by the protocol in providing some early disclosure of their contemporaneous documents, there is nothing set in stone on expert evidence and, often, claimants can be very guarded about providing expert information that may be key to resolution before CPR part 35 reports are due.

Without being directed to provide any expert information, parties may of course be reluctant to do so, even on a without prejudice basis, and, as such, some cases can be incapable of resolution at the pre-action stage. This does not seem in the spirit of the pre-action protocol, or at least what its aim initially was. So, while the position today is obviously better than it would be without the protocol in place, the likelihood of claims being resolved early and costs-proportionately may still not be as high as it
could be.

Depending on the parties' willingness to properly engage
in the spirit of the pre-action protocol, therefore, the situation can be that the protocol serves
as merely a rehearsal for the statements of case. Of course, it is in neither party's best interest for costs to be incurred in what can be effectively a duplication of
the work.

Where a party is unwilling to
act in the spirit of the pre-action protocol rather than as directed by it, the first proper interaction of the experts will happen long after the exchange of statements of case, once proceedings have already been issued. The amount of costs that will have been incurred to reach that stage, particularly if parties front-load costs, means the costs savings can sometimes not seem worth settling a claim at that juncture, despite the parties' duties to explore this.

Sanctions provisions

The sanctions provisions also rarely assist. The reality is sanctions are rarely imposed for non-compliance. This will only really take place once proceedings have been issued and the non-compliance has to be severe.

Take for example the case of Webb Resolutions Limited v Waller Needham & Green (a firm) [2012] EWHC 3529 (Ch). Following the settlement of a professional negligence claim brought by a lender against a firm of solicitors in relation to a residential property mortgage, the defendant asserted that the claimant had acted unreasonably in failing to comply with the protocol, and, as such, the usual costs consequences of CPR part 36 offers should not be applied in this case.

While the claimant's non-compliance with the protocol in Webb Resolutions meant they were liable for most of the costs of the action, the non-compliance was a serious one. The case really only serves to provide that, as long as the claimant has not 'cherry picked' its pre-action disclosure, and a proper argument is provided for any refusal to supply any specific documents requested, there should be no reason for the court to depart from the usual costs order under part 36.

Therefore, unless parties take the spirit of the pre-action protocol and agree to an effective strategy for the resolution of disputes within it, it may take changes to the protocol for it to really meet its intended aims. SJ

Eleanor Kilner is a solicitor in the professional risk team at Weightmans