McGlinn v Waltham Contractors Ltd & Others
McGlinn issued proceedings as a result of alleged defective work in the building work carried out to his property. Before issuing the proceedings, McGlinn went through the steps prescribed by the Pre-Action Protocol for Construction and Engineering Disputes. This led to a mediation which was unsuccessful. However, the claims made by McGlinn in the TCC proceedings, did not include claims in respect of over payment and loss and expense paid to Waltham. This was even though those claims had been made at the outset of the Pre-Action Protocol procedure.
At the first case management conference, one of the defendants sought an interim payment of £20,000 in respect of costs which they claimed were thrown away at the Pre-Action Protocol stage as a result of the need to consider and respond to these claims which had been abandoned by McGlinn.
As HHJ Coulson QC noted, there is no direct authority on the question of the general recoverability of costs incurred in compliance with the Pre-Action Protocols. Had the claims been abandoned after court proceedings had been issued, then the defendants would have been entitled to their costs.
However, HHJ Coulson QC said that “save in exceptional cases”, costs incurred by a defendant at the Pre-Action Protocol stage when dealing with and responding to issues which are subsequently dropped when proceedings are commenced, cannot be said to be costs incidental to those proceedings. As a matter of general principle, claims made at the time of the Protocol Procedure which were then deliberately excluded from the court proceedings bear no real relation to the subject of the litigation. Here, the proceedings had been narrowed so that there was only one real subject – namely the defective work alleged by McGlinn.
The Judge also felt that it would be contrary to the whole purpose of the Pre-Action Protocols, which are an integral part of the CPR, if claiming parties were routinely penalised if they decided not to pursue claims in court which they had included in their Protocol claim letters. The whole purpose of the Protocol procedure is to narrow issues and allow a prospective defendant where possible to demonstrate to a prospective claimant that a particular claim is doomed to failure. This is what had happened here. Thus, unless there were exceptional circumstances which gave rise to unreasonable conduct, the costs incurred by a defendant at the Pre-Action Protocol stage in successfully persuading a claimant to abandon a claim, were not therefore recoverable.
This article was originally written and published on the internet by Fenwick Elliot in Aug 2005.
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