Facilitating the Early Resolution of Disputes without Litigation

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Chapter 2Facilitating the Early Resolution ofDisputes without Litigationafter a protocol has come into force and a party has, by work done before that date, achieved theobjectives sought to be achieved by certain requirements of that protocol, then the party need nottake further steps to comply with those requirements. 39However, as noted above, the Practice Direction prescribes various standards of pre-action conductand disclosure expected of parties in dispute or potentially in dispute even if there is no pre-actionprotocol applicable—either at all, or at the relevant time—to the type of dispute in question.Pre-action protocols arose out of the recognition that the early stages of civil disputes, which had‘hitherto been neglected and largely unregulated [are] no less important than the … stages whichensue once litigation is commenced’. 40In the Court of Appeal Lord Justice Brooke noted the importance of pre-action protocols:The introduction of pre-action protocols, and of the procedures they suggest for theobtaining of expert evidence, represents a major step forward in the administration ofcivil justice. Any practitioner or judge with significant experience of personal injurieslitigation will have been very familiar with the mischiefs they seek to remedy. Under theformer regime, in many disputed cases of any substance nothing very effective seemedto happen until a writ was issued close to the expiry of the primary limitation period …The resolution of these difficulties required ingenuity and imagination. [The protocols]are guides to good litigation and pre litigation practice, drafted and agreed by those whoknow all about the difference between good and bad practice. 413.1.1 Pre-action conduct not covered by approved protocolEven where there is no specific protocol in place covering a particular type of litigation, the court maytake into account the need for cooperative pre-action disclosure. 42 The Practice Direction deals in detailwith the expected conduct of parties to a dispute in situations not covered by any approved protocol.In such situations the court will expect the parties, in accordance with the overriding objective andthe matters referred to in rules 1.1(2)(a), (b) and (c), to ‘act reasonably in exchanging informationand documents relevant to the claim and generally in trying to avoid the necessity for the start ofproceedings’. 43The Practice Direction provides that parties to a potential dispute should follow ‘a reasonableprocedure, suitable to their particular circumstances, which is intended to avoid litigation. Theprocedure should not be regarded as a prelude to inevitable litigation’. 44 Such reasonable procedureshould normally include:(a) the claimant writing to give details of the claim;(b) the defendant acknowledging the claim letter promptly;(c) the defendant giving within a reasonable time a detailed written response; and(d) the parties conducting genuine and reasonable negotiations with a view to settling theclaim economically and without court proceedings. 45The Practice Direction provides further detailed suggestions concerning the nature and extent ofinformation and documentation which should be exchanged between the parties to the ‘potentialdispute’.The letter from the claimant should:(a) give sufficient concise details to enable the recipient to understand and investigate theclaim without extensive further information;(b) enclose copies of the essential documents which the claimant relies on;(c) ask for a prompt acknowledgement of the letter, followed by a full written response withina reasonable stated period [with one month suggested as a normal reasonable period formany claims] …(d) state whether court proceedings will be issued if the full response is not received withinthe stated period;(e) identify and ask for copies of any essential documents, not in [the claimant’s] possession,which the claimant wishes to see;114Victorian Law Reform Commission - Civil Justice Review: Report
(f) state (if this is so) that the claimant wishes to enter into mediation or another alternativemethod of dispute resolution; and(g) draw attention to the court’s powers to impose sanctions for failure to comply with thepractice direction and, if the recipient is likely to be unrepresented, enclose a copy of thepractice direction. 46The Practice Direction also sets out in detail what is expected of defendants when they receivenotification of a claim. The defendant should acknowledge the claimant’s letter in writing within 21days of receiving it. 47 The acknowledgement should state that the defendant will give a full writtenresponse. If the time for this is longer than the period stated by the claimant, the defendant shouldgive reasons why a longer period is necessary. 48In the full written response the defendant should, as appropriate:(a) accept the claim in whole or in part and make proposals for settlement; or (b) statethat the claim is not accepted [or if accepted in part clearly state] which part is acceptedand which part is not accepted. 49With a view to avoiding mere bare denials of liability, the Practice Direction suggests that where adefendant does not accept a claim in whole or in part, the written response should:(a) give detailed reasons why the claim is not accepted, identifying which of the claimant’scontentions are accepted and which are in dispute;(b) enclose copies of the essential documents which the defendant relies on;(c) enclose copies of documents asked for by the claimant, or explain why they are norenclosed;(d) identify and ask for copies of any further essential documents, not in [the defendant’s]possession, which the defendant wishes to see; and …(e) state whether the defendant is prepared to enter into mediation or another alternativemethod of dispute resolution. 50In addition to the abovementioned provisions in relation to mediation and ADR, the Practice Directionmakes further detailed provision for resolution of the dispute through alternative dispute resolution.The Practice Direction provides that parties should consider whether some form of ADR would bemore suitable than litigation and if so endeavour to agree which form to adopt. Both the claimant andthe defendant may be required by the court to provide evidence that alternative means of resolvingthe dispute were considered, as the court takes the view that litigation should be a last resort. 51 ThePractice Direction outlines some of the options for resolving disputes without litigation: discussion andnegotiation; early neutral evaluation by an independent party; and mediation, which is described as‘a form of facilitated negotiation assisted by an independent neutral party’. 52 The Practice Directionexpressly recognises that no party can or should be forced to mediate or enter into any form of ADR. 53The Practice Direction provides that documents disclosed by either party in accordance with thePractice Direction may not be used for any purpose other than for resolving the dispute unless theother party agrees. 54If an expert is needed, the Practice Direction provides that the parties should, wherever possible andto save expense, engage a mutually agreed upon expert, and warns that if the matter proceeds tolitigation the court may not allow the use of an expert’s report. Furthermore, its cost is not alwaysrecoverable. 55The Practice Direction states that where a person enters into a funding arrangement within themeaning of rule 43.2(1)(k) the party should inform other potential parties that a funding arrangementhas been entered into. 56Apart from the Practice Direction, the rules make provision for offers of compromise to be madebefore proceedings are commenced, and where the offer complies with the procedural requirements,the court will take that into consideration on the question of costs in any proceedings. 5739 Ibid, [5.3]. See also [5.4], where thenoncompliance is because the timeperiod between the publication dateand the coming into force of theprotocol was too short.40 Neil Andrews, English Civil Procedure:Fundamentals of the New Civil JusticeSystem (2003) [1.15].41 Carlson v Townsend [2001] 3 All ER663, 24, 28, 31.42 Ford v GKR Construction Ltd [2000] 1All ER 802, 810 (Lord Woolf MR).43 Ministry of Justice [UK] (2006), above n29, [4.1].44 Ibid, [4.2].45 Ibid.46 Ibid, [4.3].47 Ibid, [4.4].48 Ibid.49 Ibid, [4.5].50 Ibid, [4.6].51 Ibid, [4.7].52 Ibid.53 Ibid.54 Ibid, [4.8].55 Ibid, [4.9], [4.10].56 Ibid, [4A.1]; [4A.2] provides that thisapplies to all proceedings, whetheror not a pre-action protocol applies.As the practice direction notes, r44.3B(1)(c) provides that ‘a party maynot recover [by way of costs] anyadditional liability for any period in theproceedings during which the partyfailed to provide information about afunding arrangement in accordancewith a rule, practice direction or courtorder’.57 See Civil Procedure Rules 1998 (SI1998/3132) r 36.10.115
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