5-Step Summary for Pre-Action Protocol for Construction Disputes and Engineering Disputes

Step 1 - Letter of Claim

To start the Protocol running, you need to send a Letter of Claim to the other side, which must contain the following information:

  • Your name (or that of your business) and address;
  • The full name and address of the party you are claiming money from, whether a business or individual;
  • A summary of the claim that you are bringing;
  • Details of what you are claiming for; and
  • When you wish to have a response by - this is usually 14 days to acknowledge receipt and 28 days for a substantive response.

You are normally allowed to charge interest on late payments. Where your customer is a business, then unless your contract provides other adequate remedies, you are entitled to charge interest and claim compensation in accordance with the Late payment of Commercial Debts (Interest) Act 1998. Our late payment guide can help on this issue.

Once you have sent the initial letter of claim to the other side, it is important you wait for the stated period of time before going to court. Should you receive a response, then you need to consider how to deal with this.

Step 2 - Acknowledgement/Response

Should you not receive either an Acknowledgement of the Letter of Claim within 14 days or a subsequent substantive Response within 28 days, then you are entitled to issue Court proceedings immediately.

Where an Acknowledgment is received, it should confirm receipt of the Letter of Claim and set out when a substantive Response will be provided. They may ask for more time than the standard 28 days and you should consider whether to agree to this.

The substantive Response should set out:

  • Whether it is agreed that the works have been done as set out in the invoice and, in the event they are not agreed, stating the reason for any disagreement and putting their case forward in support of this; and
  • If part of the claim is accepted, specifying which claim or part of the claim is accepted and whether or not they agree to the amounts being asked for. If they are not agreeing the amounts, then they should state why not and what, if anything, they are offering.

If they respond alleging the works were not done properly or to standard, then you will need to respond, stating whether you agree to being at fault and if not why not. You need to respond within a further 14 day (acknowledgement) and 28 day (substantive response) period. You should also consider having a site meeting within this period.

If there is substance in their response then you will have to deal with it and should proceed to " Experts/Pre-action Meetings". If it is false information with a view to avoiding paying, then it may be appropriate to issue Court proceedings, but if you do, you should write putting on record why you are doing this.

Step 3 - Experts/Pre-action Meetings

As soon as possible once a substantive response is received raising issue with the amount payable (usually within 28 days of receipt), there should be a meeting between the parties, including any building dispute experts either party wishes to rely on.

You should consider whether expert evidence should be obtained first and whether the expert should attend the meeting. Any expert instruction should be in accordance with the Protocol, i.e. you should always nominate the expert to the other side first and ask them if they have any objection to the expert. You should also ask them to agree the expert should be instructed jointly. This will save both parties costs and time.

The aim of the meeting is to see if the matter can be settled and/or to reduce the issues between the parties. More than one meeting may be necessary and you must consider at this stage whether Alternative Dispute Resolution (such as mediation) may be appropriate.

Step 4 - Issuing Proceedings

Where no response is received, or you are unable to settle the matter, you should begin issuing proceedings in your local county court. The following is intended to apply to all claims up to £50,000. If you are arguing over more than this, it would be wise to instruct a solicitor.

To issue proceedings you need to check you are within the set "limitation period" for your claim and then send the following documentation to the Court:

  • N1 Claim form (enough copies for every party and you to have one and the Court to keep one) with copy invoices attached
  • Particulars of Claim (in complicated cases this should be a separate document to the N1 - in simple cases it can form part of the N1);
  • Cheque made payable to HMCS for the Court issue fee.
  • Court addresses can be obtained by clicking here.

The Court will send you a copy of the documents stamped and dated and with a Notice of Issue telling you how long the other side have to respond. If they fail to respond within that timescale you should apply for Default Judgment straight away.

If they file a defence and the claim is for £5,000 or more we recommend you instruct a solicitor to deal with the matter from that stage forwards.

Step 5 - Instructing Solicitors

We try to keep things as simple as possible. However, as with all other things legal, instructing a solicitor is not a simple process.

We are happy to act on a Discounted Conditional Fee Agreement on your behalf. This means assuming your claim is successful, the majority, if not all of your legal costs will be paid by the other side. If the claim is unsuccessful we get paid a considerably reduced rate for our time.

This proposal is offered on the basis you are unlikely to have a policy of legal expenses insurance covering the claim you are pursuing. Should you have such a policy it is important you send us a copy with confirmation that you wish us to act. You have an absolute entitlement to instruct any solicitor you wish, despite anything they may tell you.

We can be instructed at any stage of the case. We will generally agree to accept instructions at any stage up to 4 months from trial, but seek to encourage earlier instruction as the sooner we are instructed the more assistance we can give. However, we reserve the right to refuse instructions where these are received less than 4 months from trial, or to refuse to act under a Conditional Fee Agreement where we do not believe you have a reasonably arguable case.

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