UK & Europe
A consultation is underway on pre-action procedure. Some radical changes have been proposed, as well as a general tightening of the procedure and enhanced sanctions for breaching it. This could make a big impact on the way parties prepare for litigation, and the expense and effort that involves. We look at the Civil Justice Council’s proposals, and why they are proving controversial.
A distinguishing feature of litigation in England is the requirement to take certain steps before commencing proceedings. These involve explaining one's case in correspondence, exchanging key documents and information, and attempting settlement or narrowing areas of dispute. By and large, parties follow this procedure, which is set out in the Practice Direction on Pre-Action Conduct and Protocols (the ‘PDPAC’) and accompanying Pre-Action Protocols dealing with specific kinds of litigation (eg the Professional Negligence Pre-Action Protocol). However, the Civil Justice Council (‘CJC’) is concerned that in many cases the procedure is not followed closely enough, and is not sufficiently productive in terms of reducing litigation or making it more efficient. To address these perceived problems, the CJC has published an interim report 1 proposing tighter rules and a stricter approach to enforcing them. Initially comments on the proposals were invited by 24 December, but this deadline has now been pushed back to 21 January. Accordingly, court users now have a valuable opportunity either to back (in whole or in part) the CJC’s ideas or to seek to put a brake on them before new procedures are introduced.
At first glance, the new proposals seem modest enough. Certainly, the draft revised Practice Direction that the CJC append to their report (‘the revised PD’ 2) takes the same basic approach as the current version. Even the statement in the first paragraph that “compliance with a protocol is mandatory” is not as new as it seems. the existing PDPAC already explains that “the court will expect the parties to have complied” with the rules “in substance” and will take non-compliance into account when making directions and orders for costs 3.
However, the revised PD is much longer - it has almost doubled in length - and it contains a number of provisions which will make a considerable difference in practice. For example, there is a new obligation to act in “good faith” when exploring settlement or the narrowing of issues 4. This is explained at length in paragraph 19(ii), and parties will have to take care to be seen to comply with the obligation, although it may well prove difficult to police. Also, where settlement is not reached before proceedings are issued, the parties are required to take stock of their positions and agree a list of issues, as is currently the case 5. However, the revised PD is much more prescriptive as to how this should be done, and will link to a template that parties will be encouraged to use when producing their joint stocktake report 6.
In addition, the timetable for complying with pre-action procedure would be much tighter under the current PDPAC. Most importantly, the deadline for responding in full to a letter of claim, which is currently “14 days in a straight forward case and no more than 3 months in a very complex one” 7 is changed to 14 days or alternatively 42 days where “the defendant requires more time to provide a full response, in order to obtain expert evidence, for example” 8. The revised PD goes on to say that the parties may agree “reasonable extensions”, but of course agreement may not be forthcoming. This is a remarkable proposal given that the existing deadline is already challenging - indeed sometimes impossible to meet - in large and complex cases, particularly where insurers or multiple parties are involved and need to be brought into the pre-action process.
At the same time as tightening the existing deadline, the revised PD imposes new ones. If the defendant makes a counterclaim, then the claimant must serve a reply within 14 days of receiving it, for example, and the “good faith step” towards settlement must be initiated within 14 days of the reply. That step must also be completed within 8 weeks of the letter of reply. If it is not wholly successful in resolving the dispute, it must be followed within 14 days by the joint stocktake referred to above 9. Whether such a strict timetable, if introduced, would galvanise parties into action or be an unproductive straitjacket is a matter of debate, but it would clearly alter quite considerably the way parties interact before proceedings begin.
As noted already, the CJC is concerned not only to tighten pre-action procedure, but also to ensure that it is complied with fully. To this end, the revised PD spells out sanctions for non-compliance, and even for acting “unreasonably in such a way as to undermine the objectives of the protocol.”10 The sanctions include not only the usual orders regarding costs and interest, but also striking out a claim or defence 11 , and the court is urged to apply them “at the earliest practical opportunity after compliance has been properly raised by one of the parties”.12
The revised PD is only one part of the CJC’s proposals. Further changes are suggested in the CJC’s interim report and the accompanying questionnaire. Some of these are quite radical. They include:
Whether the CJC’s proposals are all desirable, or even workable at a practical level, is already the subject of some debate. No doubt court users will make their views known before the consultation ends on 21 January 2022 (at 10am). However, the fact that the CJC is making these proposals at all is somewhat surprising, given that the preliminary survey they conducted in 2020 revealed that almost two thirds court users are broadly happy with the status quo 16. However, the revised PD and 78 questions that accompany it do give court users a second chance now to express their views, not just in the abstract, but in response to concrete proposals. It is important that a wide range of voices are heard.
The CJC’s consultation papers can be accessed on their page. They include a list of questions that court users are invited to answer, and the text of a proposed new Practice Direction, which appears as Appendix 4 to the CJC’s interim report.
1 Published on 15 November 2021 and available at: https://www.judiciary.uk/announcements/civil-justice-council-launches-consultation-on-pre-action-protocols/12
2 Appendix 4.
3 PDPAC paragraph 13
4 Revised PD paragraphs 2 and 8
5 PDPAC paragraph 12
6 Revised PD paragraph 19(iii)
7 PDPAC paragraph 6(b)
8 Revised PD paragraph 19(i)
9 Revised PD paragraph 19(i) - (iii)
10 Revised PD paragraph 21
11 Revised PD paragraph 22
12 Revised PD paragraph 23
13 Practice Direction 51U paragraph 8
14 Practice Direction 51U paragraph 3.1(2)
15 Practice Direction 57AB
16 The results of the survey are reproduced in Appendix 2 to the CJC’s interim report. In response to Question 30, which asked “Do you believe PAPs require reform?”, 7.89% answered that no reform is required, and a further 53.51% answered that only minor reforms were desirable.