The Pre-Action Protocol for Construction and Engineering Disputes (PAP) was introduced to encourage disputing parties to exchange information and meet to discuss, and hopefully narrow, the issues before starting court proceedings. However, the PAP procedure has been the subject of some criticism not least because its requirements have led to the "front-loading" of work at the start of disputes, which, in turn, has tended to increase costs.
In 2015, The Technology and Construction Solicitors' Association (TeCSA) researched the PAP in conjunction with Acuigen, and produced a final report on the perceived value of the PAP. Part of the research involved consultation with lawyers and those who use the PAP – over half of whom thought it should be amended in some way.
TeCSA and the Technology and Construction Bar Association (TECBAR) have now launched a second edition of the PAP (PAP2), which was approved by the Master of the Roll's office on 14 November. The changes aim to make the process for complying with the PAP:
- quicker (for example, the time scales for responses have been shortened);
- cheaper (PAP2 makes clear that only basic information about a claim and any defence is required and expert evidence is not normally required); and
- more proportionate (the whole pre-action protocol process should be completed within three months, with a clearly defined end date)
The changes are aimed at dealing with perceived problems with the first edition and, at the launch event, Mr Justice Coulson specifically highlighted the "problem" of "front-loading" and the consequent increase in pre-action costs.
Key changes in PAP2 include:
- parties to a dispute will be able to contract out of PAP2 by agreement (but not the more generally applicable Practice Direction on Pre-action Conduct and Protocols);
- the court will not sanction parties that make minor departures from PAP2. Sanctions will only follow a "flagrant or very significant disregard" for PAPs;
- the parties will now have the ability to appoint a "protocol referee" to resolve disputes about compliance with PAP2. The protocol referee's role is similar to that of an adjudicator
Practitioners and commercial entities with experience of adjudication will be familiar with the approach to the appointment of, and the jurisdiction of, the protocol referee. It is notable that the protocol referee can award his costs against a non-compliant party.
Whether parties take up the option of appointing a protocol referee remains to be seen, especially as any appointment requires agreement by the parties and an up-front £3,500 (plus VAT) fee for a decision by the referee.
PAP2 demonstrates – once again – the Technology and Construction Court's (TCC) willingness to adapt and improve its processes and services for the benefit of its users. It is also worth noting Coulson J's commendable enthusiasm at PAP2's launch in highlighting the TCC's recent achievement of gender parity. Parity was reached on 3 October, when Finola O'Farrell QC and Nerys Jefford QC were appointed as judges sitting in the TCC to join Carr J. as three female judges working side by side with Coulson J., Stuart Smith J. and Edwards-Stuart J.