T J Brent Ltd v Black & Veatch Consulting Ltd – tactical costs application

[2008] EWHC 1497 (TCC)

The court will not allow the pre-action protocols to be used as a weapon to gain a tactical advantage. Where the defendant knew of the substance of the contribution claims made against it from 2005 onwards and had refused to attend several invitations to attend without prejudice meetings, denying every aspect of the claim against it, the court was entitled to find that there had been substantial compliance with the Pre-action Protocol for Construction and Engineering Disputes. The claimants had asked without success for a standstill agreement from the defendant and were entitled to being proceedings, given the concerns about limitation, without serving a formal letter of claim.

Comment: various additional factors conspired in the failure of this application for costs for breach of a protocol under para 2.3 of the Protocols Practice Direction. Continuing the pragmatic approach to protocol compliance he adopted earlier this year in Orange Personal Communication Services Ltd v Hoare Lee, Akenhead J rejected the application purely on the basis that there had been substantial compliance with the protocol. The additional factors are therefore not strictly material to the decision but they indicate how an applicant’s general approach to a dispute can prejudice its position. 

  • The judge had stayed the action to enable the parties to mediate. The defendants proceeded with their application for costs despite the stay (they were technically entitled to since it had been issued before the order for a stay) in order to gain a tactical advantage at the mediation. The judge’s annoyance at seeing them back again during the stay is clear – a foolish piece of tactical manoeuvring all round given that the same judge was going to hear the costs application. 
  • Another important factor was the defendants’ failure to request a stay for the protocol procedure to be followed once the claim was issued in October 2007. This failure undermined their stance at the application. Defendants should take note if they intend to make this type of application for costs. 
  • Finally, to obtain a costs order in its favour, the defendant needed to show that if the protocol procedure had been followed to the letter, there was a good chance that the claim would have settled pre-action. Given the defendant’s extremely uncooperative response to the claimants’ many attempts to engage them in settlement discussions pre-action (the judge described them as more emphatic in their denials of liability than many defendants), this was virtually impossible.

For an example of circumstances in which a such costs order was appropriate, see Charles Church Developments v Stent Foundations Ltd. There the claimant had not begun at any stage to comply with the protocol process and there was a good chance that the matter would have settled pre-action.