Pre-action considerations and steps - Principles and purpose...

Learning Outcomes

This article outlines pre-action conduct and protocols under the Civil Procedure Rules (CPR), including:

• The fundamental principles and purpose of the PDPAC and how it interacts with specific pre-action protocols (such as Debt and Professional Negligence), including key pre-action timelines and documents.
• The steps the courts expect parties to take before commencing proceedings: coherent letters of claim and response, proportionate disclosure of key documents, preservation of electronic material, early expert engagement (including the single joint expert where appropriate), and a stocktake before issue.
• The requirement to consider and, where appropriate, attempt ADR (with reference to CPR 1.4(2)(e), PD to Part 29 and CPR 26.4 stays), and how unreasonable refusal can affect costs.
• How pre-action conduct dovetails with limitation, urgent relief and “protective” issue-and-serve strategies when time is short.
• The consequences for failing to comply with the spirit or letter of the PDPAC or a specific protocol, including costs orders (often on the indemnity basis), interest adjustments and case management orders such as a stay.
• Use of tactical tools at the pre-action stage, including pre-action disclosure and inspection, and Part 36 offers made before issue.

SQE1 Syllabus

For SQE1, you are required to understand the importance of pre-action conduct as part of the dispute resolution process, including the objectives of the pre-action rules, the steps parties are expected to take before commencing proceedings, and the potential sanctions for non-compliance, with a focus on the following syllabus points:

• The fundamental principles and purpose of the Practice Direction on Pre-Action Conduct and Protocols (PDPAC) and specific pre-action protocols.
• The steps the courts expect parties to take before commencing proceedings, including information exchange and consideration of ADR.
• The consequences for failing to comply with the spirit or letter of the PDPAC or relevant protocols, such as costs sanctions.
• How pre-action conduct relates to the overriding objective of the Civil Procedure Rules (CPR).
• When urgent applications or limitation pressures justify abridging pre-action steps and how to mitigate prejudice (e.g., protective issue and agreed extensions to serve).
• Availability and criteria for pre-action disclosure and inspection, and strategic use of pre-issue Part 36 offers.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the primary aim of pre-action protocols and the Practice Direction on Pre-Action Conduct and Protocols?
   1. To ensure claimants always win.
   2. To increase the costs of litigation.
   3. To encourage early settlement and avoid unnecessary litigation.
   4. To provide judges with less work.
2. Which of the following is a potential sanction for failing to comply with pre-action requirements?
   1. Automatic strike-out of the claim.
   2. A costs order against the non-compliant party.
   3. Imprisonment of the non-compliant party's solicitor.
   4. An order for the claim to be heard in a different jurisdiction.

3. True or False: The Practice Direction on Pre-Action Conduct and Protocols applies only when there is no specific pre-action protocol for the type of dispute.

4. Are parties generally required to consider Alternative Dispute Resolution (ADR) before commencing proceedings under the pre-action rules?
   1. Yes, always.
   2. No, never.
   3. Yes, unless there are good reasons not to.
   4. Only if the claim value exceeds £100,000.

Introduction

Before commencing formal court proceedings, the Civil Procedure Rules (CPR) require parties involved in a dispute to engage in certain pre-action steps. These steps are guided by specific Pre-Action Protocols tailored to different types of claims (e.g., personal injury, professional negligence) and, where no specific protocol applies, by the general principles set out in the Practice Direction on Pre-Action Conduct and Protocols (PDPAC). The core purpose is to facilitate communication, information exchange, and settlement discussions, thereby avoiding unnecessary litigation and adhering to the overriding objective of dealing with cases justly and at proportionate cost.

The court’s case management powers explicitly encourage ADR where appropriate (CPR 1.4(2)(e)) and allow stays to enable settlement attempts (CPR 26.4 and PD to Part 29). Non-compliance with pre-action expectations affects costs and interest and may prompt case management orders once proceedings begin.

Key Term: Pre-Action Protocol
A specific set of steps and guidance, approved under the CPR, that parties in certain types of disputes (e.g., professional negligence, debt claims) should follow before commencing court proceedings.

Key Term: Practice Direction on Pre-Action Conduct and Protocols (PDPAC)
A Practice Direction supplementing the CPR which outlines the general conduct the court expects of parties in all disputes before they start proceedings, especially where no specific Pre-Action Protocol applies.

Principles and Purpose of Pre-Action Conduct

The court views litigation as a last resort. The pre-action rules are designed to ensure that parties make genuine efforts to resolve their dispute before involving the court. Key principles supporting this stage include:

• Information Exchange: Parties should provide each other with sufficient information about their respective positions to understand the dispute and make informed decisions about settlement. This includes identifying the legal basis of the claim or defence, the key facts relied upon and the main documents.
• Settlement Focus: The primary goal is to encourage early settlement, thus saving time and costs. Making or entertaining realistic offers (including formal Part 36 offers before issue) often crystallises settlement.
• Considering ADR: Parties are expected to consider whether Alternative Dispute Resolution (ADR), such as mediation, early neutral evaluation or ombudsman schemes, is appropriate. Judicial case management requires encouraging ADR and the court may stay the case to allow it (CPR 1.4(2)(e); CPR 26.4; PD to Part 29). Unreasonable refusal to consider ADR can lead to sanctions.
• Proportionality: Steps taken pre-action should be reasonable and proportionate to the value and complexity of the claim. Disproportionate pre-action costs may be disallowed or irrecoverable at the end of the case.
• Cooperation: Parties are expected to act reasonably and cooperatively. Unhelpful or perfunctory responses that frustrate the pre-action process risk adverse consequences later.
• Preservation of Evidence and E-Disclosure Readiness: Parties should preserve relevant documents, including electronic material, and be ready to discuss the scope and format of electronic disclosure if proceedings become necessary (see PD 31B guidance on early discussions about electronic documents).

Key Term: Alternative Dispute Resolution (ADR)
Processes such as negotiation, mediation, early neutral evaluation or arbitration that aim to resolve disputes without a court trial. The court expects parties to consider ADR and can stay proceedings to facilitate it.

The PDPAC also envisages that, where appropriate, parties may use pre-action disclosure or property inspection to clarify or narrow issues (CPR 31.16; CPR 25.1). The aim remains the same: informed decision-making at proportionate cost and with a genuine opportunity to resolve the dispute before issue.

The Steps Involved

While specific protocols detail precise requirements, the general approach outlined in the PDPAC involves:

1. Letter Before Claim: The potential claimant should send a letter to the potential defendant outlining the claim clearly and concisely. This includes the factual basis, legal grounds, quantification of loss (if possible), the remedy sought and an invitation to propose ADR. Key supporting documents should be enclosed or identified. Where insurers may be involved, the letter should ask that they be notified promptly.

Key Term: Letter Before Claim
A claimant’s pre-action letter setting out a concise statement of the facts, legal basis, loss, remedy sought and proposed next steps (including ADR), with key documents enclosed or identified.

1. Defendant's Response: The potential defendant should acknowledge the letter promptly and provide a reasoned written response within a reasonable period (typically 14 days in straightforward matters and up to 3 months for complex disputes or where a protocol so provides). The response should state whether the claim is accepted in whole or part and, if not, give reasons for denial, identify disputed facts and any counterclaim, and provide key documents. An indication of ADR proposals is expected.

Key Term: Letter of Response
A defendant’s pre-action reply that accepts or disputes the claim with reasons, identifies issues, provides key documents and addresses proposals for next steps and ADR.

1. Disclosure of Documents: Parties should exchange key documents relevant to the issues in dispute to help narrow the issues and facilitate settlement discussions. This is not full CPR Part 31 disclosure but a proportionate exchange of the most material documents.

2. Experts: If expert evidence is likely to be required, the parties should consider whether a single joint expert is suitable and agree a proportionate approach. The court will only grant permission for expert evidence later if reasonably required, and will identify experts by name or field; parties obtain expert evidence pre-action at their own costs risk unless done in compliance with a pre-action protocol.

3. ADR Consideration: Throughout the pre-action phase, parties should actively consider negotiation or ADR and be prepared to evidence that consideration later. The court may stay issued proceedings to facilitate ADR.

4. Stocktake: Before issuing proceedings, parties should review their positions, consider whether further information exchange or ADR might resolve the dispute and crystallise precisely what issues remain for the court.

Key Term: Stocktake
A final pre-issue review by the parties of areas of agreement and dispute, to assess whether litigation can be avoided or issues narrowed, consistent with the overriding objective.

Alongside the PDPAC, individual protocols impose topic‑specific steps. Two commonly applied protocols illustrate how requirements can differ:

• Debt Claims (business creditor v individual/sole trader): The creditor must send a protocol-compliant letter of claim with prescribed Information Sheet, Reply Form and Financial Statement. The debtor normally has 30 days to respond and may request documentation or time to seek advice. Creditors should allow reasonable extra time where the debtor is taking debt advice and should not start proceedings within the 30-day response period. Agreements over time-to-pay should be considered.
• Professional Negligence: Claimants are encouraged to send a Preliminary Notice, acknowledged within 21 days, followed by a detailed Letter of Claim. The professional has 3 months to investigate and provide a reasoned Letter of Response and/or a Letter of Settlement. There is then a period (typically up to 6 months from the acknowledgment) for negotiation. A stocktake is required before issue.

Electronic documents should be preserved from the outset. Where disclosure is likely to be significant, parties should discuss categories, custodians, date ranges, keyword searches, deduplication and formats for production early, even before proceedings (PD 31B).

Key Term: Pre-action disclosure
An application under CPR 31.16 for disclosure of specific documents before proceedings, where the parties are likely to be parties to subsequent litigation, the documents would be disclosable if proceedings had started, and early disclosure would help dispose fairly of the anticipated proceedings, save costs or assist resolution.

Where pre-action issues arise from evidence located on third‑party premises or where inspection is necessary (e.g., property conditions), the court can order pre-action inspection under CPR 25.1 to preserve or ascertain material facts.

Where limitation is approaching or urgent relief is needed (e.g., an injunction), parties may need to abbreviate or adjust pre-action steps. In such cases, proportionality and fairness remain important: issuing “protectively” to stop time running and promptly seeking agreement to extend time for service (or applying under CPR 7.6) may allow completion of meaningful pre-action engagement post-issue, before significant costs are incurred. Equally, urgent applications without notice require full and frank disclosure and should be followed by service of the application papers and a return hearing at the earliest opportunity.

Worked Example 1.1

Company A believes Company B owes it £15,000 for services rendered. Company A's solicitor sends a brief email demanding payment within 7 days, threatening court action, but provides no details of the services or breakdown of the amount claimed. Company B ignores the email. Company A issues proceedings immediately after 7 days. Could Company A face consequences for its pre-action conduct?

Answer:
Yes. Company A's pre-action communication likely falls short of the requirements. The email lacked concise details of the claim, a summary of facts, and potentially key documents, failing to comply with the spirit of the PDPAC which encourages information exchange to facilitate settlement. Issuing proceedings so quickly without providing adequate information or allowing a reasonable time for response could lead to costs sanctions later, even if Company A ultimately wins.

Worked Example 1.2

BuildCo Ltd sends a detailed Letter Before Claim to Homeowner Ltd regarding defective construction work, complying fully with the relevant Pre-Action Protocol. Homeowner Ltd replies denying liability but provides no reasons or supporting documents, simply stating "We deny your claim". Homeowner Ltd also refuses an offer to mediate without explanation. BuildCo Ltd issues proceedings. What might the court do regarding Homeowner Ltd's pre-action conduct?

Answer:
The court is likely to view Homeowner Ltd's response as non-compliant with the spirit and requirements of pre-action conduct. Failing to provide reasons for denial, withholding relevant documents, and unreasonably refusing ADR without explanation could lead the court to impose costs sanctions on Homeowner Ltd later in the proceedings, regardless of the final outcome on liability.

Worked Example 1.3

A firm pursues an individual sole trader for an unpaid invoice and writes a short demand letter. It omits the protocol Information Sheet, Reply Form and Financial Statement and threatens to issue within 14 days. The trader responds after 18 days requesting copies of the contract and delivery notes and asking for time to obtain advice. The firm issues on day 20. What are the risks?

Answer:
For a qualifying business-to-individual debt, the Debt Protocol applies. The creditor should have enclosed the prescribed forms and allowed 30 days to respond, extending time reasonably for debt advice. Issuing early despite a timely request for information and advice is likely to attract adverse costs consequences, such as an order to pay the debtor’s costs of any unnecessary steps or an adjustment to interest, even if the creditor succeeds overall.

Worked Example 1.4

A claimant believes a supermarket’s CCTV will show the slip that caused her injury but fears it may be overwritten before proceedings. Liability is denied pre‑action and the store declines voluntary disclosure. Can the claimant seek the footage pre‑issue?

Answer:
Yes. An application for pre-action disclosure under CPR 31.16 is available where the parties are likely to be parties to subsequent proceedings, the footage would be disclosable if proceedings had begun, and early disclosure would help dispose fairly of the anticipated proceedings, save costs or assist resolution. The court’s discretion will focus on proportionality and whether early disclosure will genuinely advance resolution or fairness.

Consequences of Non-Compliance

Failure to comply with the PDPAC or a relevant Pre-Action Protocol can lead to significant consequences once proceedings are issued. The court has wide discretion to impose sanctions, focusing on the impact of the non-compliance on the litigation process and the parties’ conduct in the round. Conduct before proceedings is expressly relevant to costs (CPR 44.2).

Possible Sanctions

The court may impose sanctions if it deems that non-compliance has led to proceedings being commenced unnecessarily, has increased costs, or has hindered efficient case management. These include:

• Costs Orders: The non-compliant party may be ordered to pay some or all of the other party's costs, potentially on the more punitive indemnity basis. This can apply even if the non-compliant party wins the case overall.

Key Term: Costs Sanctions
Penalties, typically relating to the payment of legal costs, imposed by the court on a party for failing to comply with rules, practice directions (including pre-action rules), or court orders.

• Interest Penalties:
  • If the non-compliant party is the claimant, the court might deprive them of interest on any damages awarded, or award interest at a lower rate for some or all of the relevant period.
  • If the non-compliant party is the defendant, the court might order them to pay interest on any damages awarded at a higher rate (up to 10% above base rate) to reflect the conduct.
• Stay of Proceedings: The court can pause (stay) the proceedings until the non-compliant party takes the required steps. This may be ordered to compel a reasoned response, proportionate document exchange or an ADR attempt, and can be coupled with a costs order.
• Case Management Consequences: At allocation and directions stages (e.g., through the Directions Questionnaire), the court will examine pre-action conduct. It may curtail or sequence steps, limit expert evidence or impose tight timetables in response to conduct that has hindered case progress.
• Other Remedies: Although strike-out is not a routine response to pre-action non-compliance, serious or persistent misconduct that also breaches other rules or orders may contribute to more severe sanctions.

The court’s response is guided by proportionality and fairness. Technical compliance alone is insufficient; conversely, minor or justified departures will rarely attract sanction. The emphasis is on substance and reasonableness.

Parties should also note that knowingly making false statements in pre-action correspondence or documents prepared in anticipation of proceedings may amount to contempt of court, given the public interest in the integrity of litigation. Moreover, incurring substantial expert or other costs pre-action without justification can lead to non-recovery if disproportionate.

Exam Warning

Remember that the court looks at the substance of compliance, not just whether boxes were ticked. A party might technically follow steps but still be sanctioned if their conduct was unreasonable or obstructive (e.g., providing minimal information, refusing ADR without good reason). Proportionality is key – overly aggressive or costly pre-action steps can also be criticised.

The court also expects parties to evidence ADR consideration. Repeated, unexplained refusals to mediate (or ignoring invitations) may result in a costs order against the refusing party, even if they ultimately succeed on the merits, especially where the issues and costs would have been suitable for ADR.

The Directions Questionnaire reinforces these expectations: parties must confirm whether they complied with applicable protocols and engaged with settlement options. Where expert evidence has been obtained pre-action outside a protocol, the court may restrict reliance or costs recovery unless the evidence was reasonably necessary.

Parties can deploy pre-action tools responsibly to avoid later criticism. Early, well-drafted Part 36 offers can be made before issue and carry their usual costs consequences if litigation ensues. Strategic pre-action disclosure or inspection can narrow issues. However, tactical overreach—such as burdensome document demands or premature issue without meaningful engagement—invites adverse cost and interest adjustments.

Revision Tip

When analysing scenarios, always consider if the parties' pre-action steps furthered the overriding objective. Did they exchange information? Did they genuinely consider settlement or ADR? Was their conduct reasonable and proportionate? This helps predict potential court sanctions.

Key Point Checklist

This article has covered the following key knowledge points:

• The CPR requires parties to take certain steps before commencing court proceedings, governed by the PDPAC and specific Pre-Action Protocols.
• The primary purpose of pre-action rules is to encourage information exchange, early settlement and the consideration of ADR, supporting the overriding objective.
• Key steps usually involve sending a detailed Letter Before Claim, the defendant providing a full response, exchanging key documents, and considering ADR; parties should preserve electronic documents and be ready to discuss e-disclosure.
• Litigation should be a last resort; where limitation or urgency intervenes, parties should adjust proportionately (e.g., protective issue with later engagement).
• Pre-action tools include pre-action disclosure and inspection and the ability to make Part 36 offers before issue.
• Failure to comply with the spirit or letter of pre-action rules can lead to sanctions, including adverse costs orders (often on the indemnity basis), interest penalties or a stay of proceedings.
• The court assesses compliance based on reasonableness and proportionality, not just technical adherence; unreasonable refusal of ADR is a common source of sanction.
• The Directions Questionnaire asks parties to account for pre-action compliance; non-compliance can influence case management directions and costs recovery, including expert evidence obtained pre-action.

Key Terms and Concepts

• Pre-Action Protocol
• Practice Direction on Pre-Action Conduct and Protocols (PDPAC)
• Alternative Dispute Resolution (ADR)
• Letter Before Claim
• Letter of Response
• Pre-action disclosure
• Stocktake
• Costs Sanctions