A new pre-action protocol for general litigation claims is likely to be added to the Civil Procedure Rules (CPR) that govern litigation in England and Wales. It largely codifies and clarifies existing requirements and will apply to all general litigation matters (regardless of value), including those common to motor finance companies such as return of goods and shortfall claims.

The aim of the proposed protocol is to encourage parties to exchange full information about a case as early as possible and to settle their disputes without the need to commence proceedings. The courts will expect the protocol to be complied with and will take the failure to do so into account when determining costs payable by the parties.

The following points are particularly noteworthy:

• The parties must consider whether some form of alternative dispute resolution (ADR) procedure might enable them to settle the dispute pre-issue. The court may require evidence that the parties have considered some form of ADR and is likely to be unhappy if the parties have not engaged at all in the process.
• A claimant must send a letter before claim to a defendant giving concise details about the issues in dispute so the defendant can understand and investigate the case against it. This will include providing copies of relevant documents. The defendant must acknowledge the claim letter within 14 days and respond in detail within a reasonable period of time.
• In simple debt claims, businesses claiming a sum of money from a defendant who is an individual, must also:
  • Provide details of how the money can be paid
  • State that the defendant can contact the business to discuss the possibility of repaying the money over a period of time
  • Inform the defendant that free independent advice and assistance can be obtained from various organisations such as National Debtline, Citizens Advice etc.

There are additional provisions where the period of limitation relevant to the claim is about to expire. It is suggested the parties should agree in writing to extend the period so the protocol can be complied with or, if proceedings have been issued, the parties agree to put them on hold while the protocol is complied with.

Comments

The ethos of the CPR is that litigation should be a last resort and this proposed pre-action protocol reinforces that. Concerns have been raised as to whether a 'one size fits all' protocol is appropriate for all claims, particularly for low value, high volume recovery actions and simple debt claims which are not really "disputes" or suitable for ADR. However, if the protocol is implemented, to avoid any risk of being penalised by the Court on recovery of costs, businesses and their legal advisors will need to ensure they comply.

Full details of the protocol and its likely implementation date can be obtained from the Civil Justice Council.

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For further information about this published aticle, contact Kathryn Hobbs on +44 (0)121 213 2397, Alexa Highfield on +44 (0)121 213 2396 or Amie Ryalls on +44 (0)121 213 2360

This published article may contain information of general interest about current legal issues, but does not give legal advice.