Pre-Action Steps Flashcards
Give a summary of the important pre-action steps
- The client’s objectives must be established and, before issuing proceedings, all potential parties should be identified and located.
- The financial viability of the defendant should be checked to determine whether they have the means to pay any judgment and costs, and what assets are available for enforcement.
- There are strict time limits within which proceedings must be issued and these run from the date of the cause of action. For most tort and contract claims, the limitation period is six years.
- A case analysis should be completed to identify all potential causes of action and the likely disputed issues for each element, to ensure evidence is collected and preserved and to consider the realistic prospects of success.
- The parties are required to comply with the pre- action protocols or the Practice Direction on Pre- Action Conduct and Protocols as relevant. These list the steps that must be taken before issuing proceedings, with the aim of avoiding litigation by agreeing a settlement.
- Where there is a foreign element, the question of which country’s laws are applicable must be decided
What is limitation?
Claims can be statute barred if limitation periods are missed - This recognises that evidence can be lost and witness accounts lose credibility over time
If a party has missed the limitation period and the court agrees with D’s defence in this regard, C won’t succeed in the litigation
What are the limitation periods for contract, tort and personal injury claims?
1) Basic rule is that for contract or tort claims, C has six years from the date of the course of action to commence their proceedings
- The day on which the cause of action accrues is excluded from the calculation
2) In contract, the cause of action accrues as soon as the breach of contract occurs. This will be a question of fact to be determined by the court.
3) In tort, the cause of action accrues when the tort is committed. In negligence, this will be when damage occurs as a result of a breach of duty
- If poor advice is given (ie invest in a certain stock), the limitation period only begins from the date of loss, not date of advice
4) Limitation period for personal injury matters is three years
- Runs from the date of the cause of action or the date of knowledge of the person injured, except for children where the time limit does not start to run until their 18th birthday
How does the limitation period differ in a negligence claim where the damage is latent/hidden or the claimant does not have knowledge of key facts?
In a claim based on negligence where the damage is latent (hidden) or C doesn’t have knowledge of key facts at the date when the cause of action accrued, the limitation period expires either:
- six years from the date of the cause of action; or
- three years from the date of knowledge of the damage, whichever is later; but
- no later than 15 years after the date of the negligent act or omission
The date of knowledge might be when C learns of the cause of an incident, or identity of D
Can contractual clauses adjust the limitation period?
Yes, they can specify a shorter limitation period and proceedings should be commenced in this timeframe instead
What are some important points to consider with regards to the parties to a claim?
1) All potential defendants should be identified ASAP
2) People under 18 and protected parties (mental incapacity) need a litigation friend to act on their behalf
- This person must be able to fairly and competently conduct proceedings and have no adverse interest
3) D needs to be traceable to communicate the claim/serve proceedings
4) Solicitor must confirm if D is an individual, sole trader, a partnership, LLP or a limited company
5) D must be a financially viable target for a claim. Can do the following to ascertain:
- Check Companies House to check financial position of a company
- Bankruptcy search of an individual
- Internet for relevant searches
No matter the cause of action, what are the two types of claim that can be made?
Specified – C wants a fixed amount of money (debt that is owed)
Unspecified – court has to conduct an investigation to determine the amount of money payable (damages claims are usually unspecified)
- Where there’s a mix, entire claim is treated as unspecified
What is the purpose of damages in contract and tort?
The purpose of damages is to put C in the position they would have been in:
- If the contract was properly performed
- If the negligent act/nuisance hadn’t occurred
How are damages determined for breach of contract?
Look at what C expected to pay and what they actually paid, to rectify the issue
If they expected to pay £100k and had to pay another £50k to another supplier, they could claim £50k in damages.
What will considered as part of the ‘case analysis’ aspect of the claim?
Solicitor will consider all relevant information/evidence to determine strength of claim
Need to know cause of action (legal basis for claim
For a breach of contract claim, solicitor will look at:
- Existence of contract
- Terms relied on – if express, look to written agreement; if implied, look at statutory implied terms (can apply to written or oral contracts)
- Breach of the terms – how can C prove breach (question of fact; assess available evidence)
- Consequences – factual consequence of breach should be identified
- Damage and loss – each loss claimed will need to be proven and loss cannot be too remote
What are pre-action protocols and the Practice Direction on Pre-Action Conduct and Protocols?
They are sets of rules outlining the conduct expected of parties before commencing legal proceedings - part of the Civil Procedure Rules
If no relevant protocol exists, there is a Practice Direction on Pre-Action Conduct and Protocols (PDPAC) which has general guidance to be followed in such cases
- Any claims which fall outside the protocols must proceed in accordance with the PDPAC – safety net to ensure no civil claim fails to follow pre-action procedures
- Examples of claims with no pre-action protocol, include breach of contract claims
What are some elements of the PDPAC and the protocols which are common to all claims?
1) Litigation should be a last resort - always consider negotiation or ADR first
(2) The parties should exchange sufficient information in order to:
- (a) understand each other’s position;
- (b) make decisions about how to proceed;
- (c) try to settle the issues without proceedings;
- (d) consider a form of ADR to assist with settlement;
- (e) support the efficient management of those proceedings; and
- (f) reduce the costs of resolving the dispute.
(3) The steps taken should usually include:
- (a) the claimant writing to the defendant with concise details of the claim;
- (b) the defendant responding within a reasonable time (14 days in simple claim and 3 months max in complex cases); and
- (c) the parties disclosing key documents relevant to the issues in dispute.
(4) Only reasonable and proportionate steps should be taken by the parties to identify, narrow and resolve the legal, factual and/or expert issues
- The financial positions of the parties might affect what is reasonable for each
(5) Where a dispute has not been resolved after the parties have followed the Practice Direction, they should review their respective positions to see if proceedings can be avoided and at least seek to narrow the issues in dispute before the claimant issues proceedings.
(6) If a dispute proceeds to litigation, the court will expect the parties to have complied with the Practice Direction. A party may be sanctioned for failing to do so.
What penalities can the court impose for non-compliance with pre-action protocols?
(a) The party at fault pays some or all of their opponent’s costs (perhaps on the penalty, indemnity basis);
(b) depriving a claimant who is at fault of some or all of the interest they may subsequently be awarded on any damages recovered; or
(c) requiring a defendant who is at fault to pay interest on any damages awarded to the claimant at a rate of up to 10% per annum above the base rate
If a party behaves badly in mediation and arbitration, leading to it failing, is this relevant to the issue of costs?
Evidence of what happened during the mediation is relevant in these circumstances. Where both parties agree to waive confidentiality and give that evidence, the trial judge should hear it
One party may be ordered to pay or contribute towards the other party’s costs if it can be established by way of admissible evidence that its conduct caused mediation to fail where otherwise the mediation would have had a reasonable prospect of succeeding
However, a party to a mediation cannot compel the mediator to give evidence in subsequent proceedings. Moreover, the court has no power to order a party in these circumstances to pay compensation to the mediator, nor require one party to pay the full costs of the mediation
When might it be appropriate to ignore the pre-action protocols?
If the limitation period is close to expiring, a party can start proceedings and then apply to the court for a stay of proceedings, so they can then comply with the protocols
Give a summary of the main steps in reference to these pre-action protocols
1) C sends letter before claim, with:
- Concise details of claim
- Factual summary
- What C wants from D
- Key documents
2) D sends letter of response:
- Within reasonable time (14 days simple, 3 months complex)
- Must confirm if claim is accepted and, if not, explain the reasons
- Indicate if there is a counterclaim
- Include key documents
3) C replies and parties consider
- Negotiation
- ADR (strongly encouraged)
- Appointment of experts
4) Before issuing proceedings, parties should:
- Review their positions
- Consider if proceedings can be avoided
- If not, narrow the issues in dispute
5) Sanctions for non-compliance with the above steps
- Party at fault pays some or all of opponent’s costs (perhaps on indemnity basis)
- C is deprived of some or all of the interest on damages
- D is required to pay a higher rate of interest on damages
What is the Pre-Action Protocol for Debt Claims?
The Pre-Action Protocol for Debt Claims applies to any business including sole traders and public bodies (the creditor) that brings a claim against a debtor who is either an individual or a sole trader (the debtor).
It does not apply to business to business debts (unless the debtor is a sole trader)
Potential C must give full information on the debt owed and how the debt can be paid
Debtors are given 30 days to respond and court proceedings cannot be issued before this deadline
How does the Pre-Action Protocol for Professional Negligence differ from PDPAC?
1) C should notify the professional in writing (Preliminary Notice) about them, a brief outline of their grievance and, where possible, a general indication of the financial value of the potential claim
- Professional should instruct their insurers immediately and acknowledge the notice in 21 days of receipt
2) C then sends a Letter of Claim giving full details of the issues, with key documents
- Professional must acknowledge in 21 days and then has 3 months to investigate and to respond
3) Letter of Response states whether they admit the allegations and if not, why with accompanying documents; they can also send a Letter of Settlement at this point
4) If claim totally denied and no settlement offered, C can start proceedings
5) If claim admitted wholly or partly and/or settlement offered, parties should negotiate with the aim of resolving within six months or consider ADR
- If unresolved, they must have a final review of their positions/narrowing of issues before court action is taken
How are claims with a foreign dimension managed?
Each country will apply its own domestic rules to cases where the UK is involved
All contracts should have a clearly worded clause stating what law will govern the contract to avoid uncertainty in the event of a dispute arising
Where no governing law is chosen, parties don’t have a choice of what law is applicable to their dispute
In a sale of goods case, the country that has jurisdiction is the one where the goods were delivered, and not the country from which they were despatched.
