There are a number of specific protocols for different types of dispute, for example, Personal Injury Claims and Construction and Engineering Disputes. Where there is no specific protocol, which is the case for claims for breach of contract and other commercial claims, it will be covered by a more general practice direction.
The whole purpose of the protocols is -
- To encourage parties to exchange information early.
- To enable parties to avoid court and to settle their cases.
- To make court proceedings easier if the parties can't settle.
In other words, litigation is to be regarded as a last resort, the parties have to take a "cards on the table" approach and try to settle where they can. If they can't, then the issues should have been narrowed so that costs will be saved when the inevitable happens and the parties are off to court.
The protocols follow pretty much the same kind of format, whether specific or general. They involve a letter of claim being sent with supporting documents following which that letter would be acknowledged and a full reply (again with supporting documents) would then be sent. The parties can agree the timescales for this procedure but normally, a full reply should be sent within a month or two of the letter of claim having been received.
Although, the protocols are not binding, they are seen to be practically effective because under the rules, the courts can penalise parties who do not comply with the procedures and simply issue court proceedings without due consideration. The main way in which the courts will show their disapproval is by ordering the unreasonable party to pay costs. The rules specifically allow the court to take into account whether a party has complied with any relevant protocol when considering orders for costs.
There have been so far few cases before the courts dealing with the specific issue as to whether a party should be so penalised. However, there have been 2 recent cases where the court has ordered that where a party has acted unreasonably, this behaviour should be punished by adverse costs orders. In one example, the court found that a party who had not given enough time for their opponent to reply, (which was made worse by failing to supply information as to the detail of the claim) and who then issued court proceedings prematurely, should be punished by having to pay their opponent's costs for acting un cooperatively and heavy handedly.
A party does not need to comply with the strict letter of the protocol but more the spirit of it. The lesson to be learnt is that a party should not rush into litigation without having fully considered whether they have been open and reasonable in their approach beforehand and that they really have no alternative but to go to court. If they do not and rush off to court without thinking very seriously, then they run a big risk that they will get penalised very heavily in costs.
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