Court proceedings should be the last resort to settle professional negligence claims according to the Ministry of Justice (MoJ). An updated Professional Negligence Pre-Action Protocol, which came into force on 6 April 2015, encourages parties to a dispute to use Alternative Dispute Resolution (ADR) rather than take a case to Court.
The new Protocol has three main changes. These are to emphasise the use of ADR, to amend the disclosure requirements and introduce a new Stocktaking provision:
- ADR: The Courts may ask the parties to provide evidence that ADR has been considered. If a party has unreasonably refused then it may have implications when costs are assessed by the judge.
- Disclosure: Claimants should provide key documents with their Letter of Claim and provide further documents as requested by the defendant. The defendant is also expected to provide documentation to support their claim in their Letter of Response. The Protocol makes an important distinction by limiting the documents that need to be disclosed to those that would normally be ordered by a Court under pre-action disclosure.
- Stocktaking: A new ‘stocktaking’ provision has been introduced. If ADR is unsuccessful, the parties will be expected to undertake a full review of their positions and decide whether the issue between them have narrowed or if Court action can be avoided.
The new Protocol covers all disputes with professionals except construction and healthcare professionals who should follow the Construction and Engineering Disputes or Resolution of Clinical Disputes Protocols.
“Anything which avoids the cost and complication of a court case is to be welcomed,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “On the one hand, settling a claim without resorting to court will help to reduce the costs borne by insurers, which in turn will help to keep premium cost inflation to a minimum. On the other, the time cost to professional firms of court action is often not appreciated unless the court process has actually been experienced. There is a significant and hidden cost to firms in senior staff spending such large amounts of time on non-fee generating activity.”