Proposed general pre-action protocol
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.
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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 (i.e. method and
address to which it should be sent)
– State that the defendant can contact the business to discuss the
possibility of repaying the money over a period of time, and
provide the relevant contact details and
– Inform the defendant that free independent advice and assistance
can be obtained from various organisations such as National
Debtline, Citizens Advice etc. If this information is already
provided as part of the business’s debt collection routine, the
protocol does not require the information to be provided again as
part of the letter before claim. It only has to be given once.
• 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 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 on www.civiljusticecouncil.gov.uk.
The author is a partner in Wragge & Co LLP’s
Finance, Insolvency, Recoveries and Sales team
Motor Finance Issue: 44 – June 08
Published for the web: June 26 08 12:11
Last Updated: July 25 08 17:0
