8.4 Pre-action conduct Flashcards
What is meant by Pre-Action Conduct and Protocols (PDPAC)?
Certain pre-action steps that parties are expected to take before commencing court proceedings.
When does the Pre-Action Practice Direction apply?
Applies to disputes not covered by a specific protocol. Courts expect parties to follow the relevant pre-action protocol or, if none, the Pre-Action Practice Direction, before issuing a claim with the court.
Explain what is meant by the Overriding Objective (CPR r 1.1)?
“To deal with cases justly and at proportionate cost.” Parties are required to help the court to further the overriding objective.
What are some elements that form part of the Overriding Objective in court?
1) Saving expense
2) Dealing with the case in ways which are proportionate
3) Ensuring that the case is dealt with expeditiously and fairly
4) Allotting an appropriate share of the court’s resources to the case, while taking into account the need to allot resources to other cases
5) Enforcing compliance with rules, practice directions and orders
What is the objective of Pre-Action Conduct?
The courts aim to promote the early resolution of disputes without parties needing to resort to litigation.
If this is not possible, the processes set out in the PDPAC will at least
a) facilitate the sharing of information
b) enable the parties to have a better understanding of their opponent’s position and
c) narrow the issues in dispute.
What happens if the claimant is faced with a limitation deadline?
Claimant with a limitation deadline or otherwise has to act urgent (e.g apply for an interim injunction, a need to freeze assets) will not be expected to comply with the PDPAC before issuing the claim
When is ADR considered (alternative dispute resolution)?
Courts are keen on encouraging parties to consider ADR seriously before commencing proceedings.
Examples - mediation, arbitration, early neutral evaluation and ombudsmen schemes.
Parties may be required by the court to provide evidence that ADR has been considered.
What are the consequences of not complying with PDPAC?
If proceedings are commenced immediately, the court may enforce possible cost sanctions. The case may even be struck out.
What is a letter before action / letter of claim?
This letter is drafted by the claimant and should first be sent to the prospective defendants/s. This should be a genuine attempt to avoid proceedings and should:
- State the basis of the claim
- Include a summary of the relevant facts
- State what remedy the claimant is seeking (if money, how it is calculated) and
- Disclose any key documents
How should a defendant respond to a letter before action / letter of claim?
Prospective defendant should reply to LBA within a ‘reasonable time’ - no more than 3 months even in a complex case. In a straightforward case, a specified reasonable time could be as little as 14 days.
Correspondence should include:
- Confirmation as to whether the claim is accepted
- Reasons why it is not accepted
- Explanation as to which facts and parts of the claim are disputed
- Details of any counterclaim the defendant wishes to make
- Disclosure of key documents
How long should pre-action correspondence take?
Usually no more than one exchange of letters. PDPAC provides that C should write a LBA to D and D should provide a substantive response.
Lengthy pre-action correspondence could take place due to
a) difficulties in investigating certain facts, b) availability of relevant parties
c) substantial volume of evidence to consider
d) involvement of experts
What should happen if a claim needs to be issued and a limitation deadline is approaching?
Where C is forced to issue proceedings early in order to avoid their claim becoming time-barred, the parties should seek a stay of the claim to allow them time to follow the PDPAC.
What are the principal cost sanctions for non-compliance of a party?
- An order that they pay some, or all, of the costs of other parties
- An order that they pay such costs on a indemnity basis
- Depriving successful C of interest and/or awarding interest at a lower rate and / or
- Applying a higher rate of interest than would otherwise have been awarded (not exceeding 10% above base rate) on sums to be paid by D
What other sanctions can be enforced by the court (asides from costs) for failure to comply with pre-action conduct?
- Striking out a party’s statement of case (e.g defence) for failing to comply with PDPAC
- Being subject to proceedings for contempt of court if false statement is knowingly made in a pre-action letter or other document prepared in anticipation of legal proceedings
What happens when the claimant receives a settlement response from the defendant?
Unless it is necessary to issue the claim earlier (for example, to avoid the claim becoming time-barred), if there is a response suggesting settlement, the claimant should not commence proceedings until 6 months after the letter of acknowledgment – the negotiation period.
