Changes to the pre-action protocol for construction disputes take effect in November – what do contractors need to know?
Changes in the protocol governing pre-action behaviour in construction and engineering disputes (PAP) took effect yesterday (9 November).
These changes are designed to cut the delays often experienced during the PAP process and also to save costs.
The changes also introduce the protocol referee procedure (PRP). The intent behind the PRP is to solve procedural issues that arise between the parties during the PAP process swiftly, thus minimising delay, reducing costs and hopefully further encouraging early dispute resolution.
Main changes to the PAP
- Crucially, time limits have been shortened: the extent to which parties can agree an extension of time for compliance with any step of the protocol has been reduced to a maximum of 28 days. This contrasts with the previous parameters – for example, timescales for provision of the letter of response, where the parties used to be free to agree an extension of up to three months.
- New additional references to proportionality and balance are included, increasing the emphasis on this part of the overriding objective set out in Civil Procedure Rule 1.1.
- Provision for a new consensual PRP.
- The parties involved in a dispute can now agree in writing to opt out of the requirement to comply with the protocol.
What is the PRP?
The PRP is entirely new and flows from the extensive research conducted by the organisations that prepared the new protocols: the Technology and Construction Bar Association (TECBAR) and the Technology and Construction Solicitors Association (TeCSA).
Collectively, they have concentrated on what was working in the protocol process for construction and engineering disputes (in terms of a balanced and cost-effective resolution) and where there might be room for improvement. An official PRP document is also published jointly by TeCSA and TECBAR on their websites.
Further key features of the PRP
- The PRP is entirely consensual and cannot be imposed on any party.
- Either party can apply to the chairman of TeCSA for the appointment of a protocol referee, which would be a senior member of either TeCSA or TECBAR authorised to act as referee.
- An application under the PRP can relate to directions sought in relation to compliance with the protocol, and/or an alleged non-compliance with the protocol.
- The cost of an application will be £3,500 plus VAT.
- The process is intended to be swift, with default provisions including the aim of appointing a protocol referee within two working days of the application, submission of the response (to the application) within five working dates of their appointment, and the protocol referee’s decision within 10 working days of receipt of the notice of appointment.
- The decision will be in writing, with brief reasons and binding until final determination or agreement.
What difference will this make?
With the aim of reducing front-loaded costs and delay, it is hoped that individual parties will welcome these changes and make use of the new PRP to better streamline the dispute process.
The PRP will, of course, be closely scrutinised in order to monitor its progress and ensure there is the in-built flexibility to make changes should they be required.
Copies of the protocol and PRP document can be downloaded from the TeCSA or TECBAR websites.
Sue Ryan is a partner at Gowling WLG