The Professional Negligence Pre-action Protocol
The Professional Negligence Pre-action Protocol applies when a claimant wishes to claim against a professional, other than a construction professional and health care providers, where the professional is accused of negligence, breach of contract or a breach of fiduciary duty. The purpose of the protocol is to ensure an early exchange of information and hopefully a resolution of the dispute without the necessity for proceedings.
The courts treat the protocol as the standard of behaviour for the parties prior to proceedings. The procedure is considered to be the reasonable approach and each party will be criticised if they do not follow it. Minor breaches of the protocol will usually be disregarded by the court. Allegations of professional negligence are often made when a professional seeks to recover outstanding fees. These allegations should usually be raised by the former client before court proceedings have commenced.
Preliminary Notice
As soon as the client considers he has a dispute, then his solicitor should write to the professional (the notice). That letter should contain the following information:
- The name of the client, professional and any other parties.
- Provide a brief outline of the dispute and the claim against the professional.
- Give an indication of the remedy and the financial value of the claim.
That letter should be addressed to the professional and should ask the professional to pass a copy of that letter to their professional indemnity insurers immediately. The professional should acknowledge receipt of the letter within 21 days, but, other than that acknowledgement, the protocol at this stage places no further obligation on the professional. If, after 6 months from the date of the notice, the solicitor for the client has not written further as to the claim, then he should notify the professional of his intentions such as whether he is pursuing the claim or has not yet reached a decision and, if the latter, when they will do so.
Letter of Claim
As soon as you are advised by your solicitor that you have grounds for a claim, then a detailed letter of claim needs to be written to your opponent. That letter should be an open letter, as opposed to a without prejudice letter, and should include the following:
- The names of all the parties involved in the dispute.
- A clear chronological summary which has key events and those facts that are relied on, and also refer to any key documents which need to be identified and attached to the correspondence.
- Any reasonable requests which the client needs to make for documents held by the professional.
- The allegation made against the professional i.e. What s/he has done wrong, what mistake has been made or what s/he has failed to do on your behalf.
- An explanation of how that mistake has caused you loss. It should provide an estimate as to the loss suffered by you and how it is calculated by reference to any supporting documents. If at that stage you cannot provide full details of the financial loss, then an explanation needs to be given to the professional as to why that is the case and the valuation of the claim should be sent to the opposing solicitors as soon as possible stating whether an expert has been appointed, the date the expert was appointed and the discipline of the expert.
- A request that a copy of the letter of claim be forwarded to the professional’s insurers.
- An indication of whether you wish to refer the dispute to adjudication. If so, you should propose three adjudicators or seek a nomination from the nominating body. If not, you should give reasons.
- If you have sent other letters of claim to any other party in the same dispute or related dispute, those letters should be copied to the professional.
If you are seeking a remedy other than a financial remedy, then that needs to be made clear in the correspondence. Again, the professional needs to be advised to pass the letter on immediately to their insurers.
The letter of claim is not taken to be a statement of your case, however if proceedings were issued and the particulars of claim varied from the letter of claim, then the court at a future date could impose financial sanctions on you by way of costs. If there are any other parties to the dispute in which letters of claim have been sent, then those letters need to be copied and sent to each of the other parties.
The Letter of Acknowledgement
Your letter should be acknowledged within 21 days of receipt by the professional.
Investigations
If the professional does not consider the letter complies with the protocol, they should advise the claimant as soon as possible saying why and what further information or documentation is required. The professional and their insurers have 3 months from the date of the acknowledgement to investigate. If in the unlikely event they cannot comply with that date, then they need to request as soon as possible an extension providing an explanation as to why. There is an obligation on you to agree to a reasonable request to the 3-month period. Your solicitor will be able to advise you as to what is a reasonable request. If there is any request for any further information or documentation from your opponent, then that should be provided. If the professional intends to claim against someone else, that party should be identified to the claimant in writing as soon as possible.
Letter of Response and Letter of Settlement
At the end of the 3-month period, but hopefully before, the professional or their insurers will write a letter of response or a letter of settlement or both.
Letter of Response
- If it is a letter of response it will normally be an open letter and will normally be a reply to the allegations you have made against the professional.
- That letter will explain whether the claim and which parts are to be admitted and denied and to say so in very clear terms.
- If only part of the claim is to be admitted, then your opponent should make it clear what parts of the claim are to be admitted and which parts are not.
- If the claim is denied as a whole, then the letter should say so and provide comments on the allegations made and why they are disputed and provide the professional’s own version of events.
- In the unlikely event after that period the professional is unable to admit or deny the claim then they need to say what further information he or she requires.
- If there is a dispute as to the amount you are claiming, then the professional needs to say what amount you should be entitled to and why. Or if they can’t, explain why an estimate cannot be provided and when they will be in a position to do so.
- Identify and provide copies of key documents. The parties are encouraged to cooperate in the exchange of information and documentation.
- As with the letter of claim, the letter of response is not taken to have the same status as a defence. However, as with the letter of claim, if it differs materially from the defence then the court may well impose cost sanctions.
Letter of Settlement
- This will normally be a without prejudice letter.
- Set out the professional’s views to date on the claim.
- Identify any issues which the professional believes will remain in dispute and which are not.
- Make a settlement proposal.
- Where additional documents are relied upon then copies should be provided.
If the letter of response denies your claim in its entirety and there is no letter of settlement, then it is open to your solicitor to issue the claim. If not, then your solicitor and the opponent should engage in attempting to settle the claim. Conclusion of those negotiations should be within 6 months from the date of the letter of acknowledgement. If the claim cannot be resolved within this period, the parties should agree within 14 days of the end of this period an extension and for how long. They should also identify those issues which are still in dispute and which can be agreed. If the parties cannot agree an extension, then proceedings can be issued.
Experts
The parties are expected to cooperate with each other, and it may be the case that separate experts are required as to breach of duty, causation, and the value of the claim.
Alternative Dispute Resolution (ADR)
The parties during this period will identify whether alternative dispute resolution is required. The Court will expect the parties to look at ADR as litigation is the last resort. There are various forms of ADR.
- Mediation; A third party attempts to facilitate a settlement.
- Arbitration; A third party will adjudicate on the case.
- Third Party evaluation; A third party will give an opinion on the case.
- Adjudication; An independent adjudicator gives a decision that can resolve the dispute either permanently or on a temporary basis, pending subsequent court determination.
- Ombudsman Schemes.
If there was a situation where a settlement had been mooted, then the parties should engage in ADR and then, if not, one of the parties could be criticised and penalised in the form of costs.
Stocktake
Where the procedure has not resolved the dispute, the parties should undertake a further review of their respective positions. The parties should consider the matter and the evidence on both sides to see if proceedings can be avoided and attempt to narrow the issues.
Court proceedings
Unless it is necessary, because a limitation period is about to expire, the claimant should not start court proceedings until:
- The letter of response denies the claim in its entirety and there is no letter of settlement; or
- The end of the negotiation period.
If proceedings are started before the procedures in this protocol have been properly followed, the parties are encouraged to agree to apply to the court for a stay until it has been. Where possible, 14 days written notice should be given before proceedings are started, indicating the court within which the claimant is intending to commence court proceedings.