We must not forget, however, that we should see litigation as the last and not the first resort in the attempt to settle a dispute.” The Lord Chancellor's remarks from 1999 in the Forward to the new Civil Procedure Rules underlined what he called the widespread public dissatisfaction with the delay, expense, complexity and uncertainty of pursuing cases through the civil courts in the UK. It was in the spirit of encouraging full, frank and early disclosure of information and achieving speedy and equitable settlements (hopefully without the need for litigation) that two new pre-action protocols were introduced at this time, one for clinical disputes and the other for personal claims. Other protocols are now in place for construction and engineering disputes and defamation, all designed to encourage settlements of disputes as soon as possible.

The Lord Chancellor wants to increase the number of these protocols so that as many cases as possible fall within their scope. For the last 18 months or so, a market body of insurers from the Lloyd's and London company markets have been working on a protocol which came into effect mid-July: the new ‘Claims against Professionals' protocol.

The protocol is designed for negligence claims against professionals, including allegations that the professional has not taken reasonable skill and care, and claims for breach of fiduciary duty.

As its name suggests, this protocol will apply when somebody wants to make a claim against a professional such as a solicitor, an insurance broker, an accountant or a consultant. In fact, the protocol deliberately does not define what a professional is; instead it encourages people to be flexible and adapt the protocol for individual circumstances. It is designed to be simple so that people can understand and apply it. Reflecting this aim, the language is straightforward and the protocol and its guidance notes are only 11 pages long.

The key stages of the protocol are summarised in table 2. Perhaps the essential point is that the protocol pushes the claimant and the professional to ‘put their cards on the table' as early as possible once the dispute is underway:

  • claimants are obliged to notify the professional as soon as they think there is a reasonable chance that they are going to make a claim. Once claimants believe that they have grounds for proceeding with a claim they need to send a letter of claim to the professional giving details including the allegations, dates and financial amounts. This gives the professional and the professional's PI insurers the information to begin investigations;
  • professionals are obliged to acknowledge the claimant's notification and letter of claim within 21 days of receiving them. They then have three months in which to investigate the claim, although the claimant is required to agree to any reasonable request for an extension of the three-month period. During this period, both parties are expected to supply any information that is reasonably requested to assist the investigations.

    After the investigations have been completed, the professional (or the professional's PI insurers) should write to the claimant with a letter of response and/or a letter of settlement. The letter of response is a ‘reasoned answer to the claimant's allegations'. If a settlement is being proposed, then a letter of settlement should be sent to the claimant detailing those issues that remain in dispute and those that do not.

    After the letter of response or letter of settlement, if the claim is denied in its entirety and there is no letter of settlement to leave the door open for negotiations, the claimant may commence proceedings. Otherwise the parties should aim to conclude negotiations and reach agreement over the outstanding issues within six months from the date of the acknowledgement. If after that time the parties have not reached agreement, and if they cannot agree a further extension, then the claimant can commence proceedings.

    Possible implications

  • Flexibility. Although the protocol sets out a clear timetable for pre-action behaviour, it also demands flexibility and responsibility from the two parties, for instance, in terms of negotiating and agreeing necessary extensions to timescales, the deployment and remuneration of separate or joint experts and the use of some form of alternative dispute resolution.
  • Less litigation. Greater (and earlier) exchange of information should help disputing parties take a more realistic view of a case well before litigation. This should reduce the number of cases going to court and so reduce costs. It should also flush out weak or speculative claims.
  • Spotlight on delay. The protocol is clear and unambiguous about the timescales underlying a claim and the procedures to be followed throughout the claim. For this reason all the parties brought into a claim need to be sensitive to the need to provide timely and pertinent information. Claimants, claimants' advisers, professionals, professionals' advisers, insurance brokers and insurers will all be under the spotlight – particularly in the event of any delay.
  • For claims handlers. In a sense, the protocol devolves pre-litigation power to claims handlers who need to be particularly alert to the terms and spirit of the protocol, not only in terms of the timescales but also in relation to expert witnesses, mediators, panels of consultants favoured by insurers and so forth.
  • For claimants. The protocol should reduce the cost and make access to justice easier for claimants.

    Compliance and the future
    It is clear from reading the Civil Procedure Reform Guidelines that there will be more pre-action protocols in the future. Despite the flexibility and ‘empowerment' of parties embedded in the protocol – who are now expected to go a long way towards agreeing and resolving disputes themselves – the protocol has the full weight of the law behind it. As Lord Irvine laconically put it, “parties who fail to comply with the protocols will be penalised by the courts”. Indeed, this has been born out by the imposition of penalty cost awards by the courts against those parties who have not upheld the spirit of other protocols.