How to handle construction disputes in England

The English courts are increasingly busy institutions. Over the years considerable time has been spent developing the Civil Procedure Rules (CPR) to encourage the early resolution of disputes and to ensure that, when cases progress, they are dealt with as efficiently and fairly as possible. Nevertheless, it can be difficult for prospective claimants to get it right – so how can they avoid a formal dispute (or be put in a better position if a dispute proves unavoidable)?

Risk of strike-out

The recent Technology and Construction Court cases of Firdous v Ecclesall Design Ltd & Ors and Willmott Dixon Holdings Ltd v Karakusevic Carson Architects LLP & Ors  both dealt with applications by defendants to strike out the claimant's claim – Ecclesall succeeded while Karakusevic did not. The cases provide a helpful reminder of the fine line between getting it right and wrong when a dispute arises.

Maintain good records from the outset

During the project, keep good records and manage the contract in accordance with its terms. These records may prove decisive if a formal dispute later materialises.

Tips for managing an emerging dispute

1. If you think you may be heading towards a dispute, consider the evidence you may need and issues of privilege (you should seek legal advice on this) and whether early assimilation (which could involve engaging delay, quantum or technical experts) might help secure an early resolution without the need for formal proceedings.
2. If court is the chosen method of dispute resolution, the claimant should always comply with the pre-action protocols.
3. In particular, claimants should carefully consider alternative dispute resolution (ADR), especially mediation. The courts have gone beyond simple encouragement and are now prepared to mandate that parties mediate.
4. If it comes to the issuing of court proceedings, claimants should plead the case properly and do so strictly in accordance with the CPR.
5. Always consider the CPR's overriding objective to enable the efficient and fair progress of the case – all parties must be able to understand the case against them.
6. It is essential for claimants to particularise both the alleged breaches and how the alleged breaches caused the losses claimed.
7. If a claimant is facing limitation issues then it must still set out the basis of its claim, even in a rudimentary way, and have a genuine intention of pursuing the claim. In the Willmott Dixon case, the claimant was found to have met the necessary requirements, even though it did not have full details of the claim at the time of issuing proceedings – but there are cases where the decision has gone against the claimant in similar circumstances. Seek urgent legal advice if you are concerned that limitation periods may be an issue.
8. The court's time is precious – it is not a proportionate use of the court's time to correct deficiencies in the pleadings. This duty sits with the claimant, so they need to get it right first time or may risk strike out or summary judgment (as happened in the case of Firdous).

Failing to proceed in line with the above steps may not only result in the claimant's loss of opportunity to recover its losses in proceedings but could also result in an order to pay the defendants' wasted costs.