Construction Disputes Resolution – Litigation in the Technology and Construction Court

18/09/2015

Welcome back to the final part of our series on construction disputes resolution.  In this blog, we will be discussing litigation, focusing on the Technology and Construction Court, commonly known as the TCC.

The TCC is a specialist court which deals with technically complex claims/issues within the building, construction and engineering sphere. Its remit amongst other things includes

• Dealing with claims for the enforcement of adjudication         

• Both decisions and challenges to the decisions of arbitrators in construction and engineering disputes.

Although TCC claims are dealt with in both the High Court and the County Courts, the principal centre for TCC is the High Court in London where there are currently four High Court Judges. The TCC also has a number of regional centres.

Since 2004, the work of the TCC in London has grown rapidly, with nearly 550 new claims issued last year.

Resolving Disputes in the TCC (County Court) or the TCC (High Court)

In the case of West Country Renovations v McDowel [2012] EWHC 307 (TCC), the TCC in the High Court issued guidelines as to when a claim may be commenced in the TCC in the High Court in London and when it should be commenced in the County Court or other TCC courts outside London.

These guidelines were subsequently consolidated into the TCC Guide and the main principles are as follows:

1.      Generally, claims which are for less than £250,000 should be commenced in the County Court or other High Court centres outside London which have TCC designated judges (these are listed in the TCC Guide).

2.      However, a non-exclusive list of exceptions is as follows:

(a) Cases involving adjudications, including enforcements and arbitration, irrespective of their financial value; this is justified by the need to build up a body of consistent case law in these important areas.

(b) International cases of any value. These would involve cases between non-UK resident parties or cases involving foreign projects or developments. In such cases, London is commonly the first port of call and overseas parties will expect a TCC High Court judge to hear the case. In addition, TCC High Court judges in London are experienced in international work.

(c) Cases involving new or difficult points of law or which have issues of technical complexity.

(d) Any test case or case which will be joined with others which will be treated as test cases.

(e) Public procurement case as the TCC in London has built up expertise in this area.

 (f) Civil Procedure Rules Part 8 claims (where the court’s decision is sought on a question which is unlikely to involve a substantial dispute of fact) and other claims for declarations.

(g) Claims which cannot readily be dealt with effectively in the County Court or Civil Justice Centre by a designated TCC judge.

 (h) Complex nuisance claims brought by a number of parties, even where the sums claimed are small.

 (i) Claims for injunctions.

This list is not exhaustive and if a party can show any other good reason for the case to be retained in the High Court, then it will not be transferred.

Pre-Action Protocol for Construction and Engineering Disputes

The Pre-Action Protocol for Construction and Engineering Disputes (the 'Protocol') sets out a series of steps which parties involved in construction and engineering disputes must follow before commencing proceedings in the Technology and Construction Court.

The purpose of the Protocol is to encourage the exchange of information early on to enable the parties to avoid litigation and agree a settlement.

Alternatively, if litigation becomes inevitable, following the Protocol will help the dispute to progress through the courts more efficiently, thereby saving time and money.

In certain circumstances the protocol does not need to be followed.  These include:

• If litigation is sought to enforce an Adjudicator’s decision         

• If an injunction is being sought          

• If the litigation is for a summary judgement         

• The litigation would be time barred if the Protocol was followed  

• Where the dispute relates to the same or substantially the same issues as have been the subject of a recent adjudication under the Housing Grants, Construction and Regeneration Act 1996, or some other formal alternative dispute resolution procedure.    

The Steps Involved in the Pre-Action Protocol for Construction and Engineering Disputes

The first step in the Protocol is for the Claimant to send each Defendant a Letter of Claim, which will provide a summary of the claim, the facts on which the claim is based on the remedy sought and the evidence and expert witness that are being relied on.

 The Defendant/s will have 14 days in which to acknowledge the Letter of Claim.  If they fail to do so, the Claimant is entitled to proceed with the claim without adhering to the rest of the Protocol procedure.

The Defendant can raise an objection on the following grounds:

• That the Court lacks jurisdiction;

• That the matter should be referred to arbitration; or

• That the Defendant named in the letter of claim is the wrong Defendant. 

The objection must be made with 28 days of receipt of the Letter of Claim, lay out the grounds on which the objection is based on and, in the case of the wrong Defendant being named, identify the correct Defendant if possible.

Step 4 - The Response to the Letter of Claim

The Defendant must respond in full to the letter of claim within 28 days.

The response should set out the following:

• The facts set out in the Letter of Claim which are agreed on and which are not. An explanation should be given if a fact is disputed          

• Which claims are accepted by the Defendant and which are rejected by him or her. If the Defendant rejects a claim he or she should explain why he or she rejects it          

• If the Defendant accepts a claim in whole or part, the letter of response should state whether the damages, sums or extensions of time claimed are accepted or rejected. If they are rejected, the Defendant should explain why he or she rejects them          

• Any contributory negligence          

• Any intention of a counter-claim          

• The evidence to be relied on and the names of any expert witnesses

If a counter-claim has been made by the Defendant, the Claimant has 28 days with which to respond.

Within 28 days of the receipt of the Letter of Response, the parties are required to meet to discuss the main issues of the case and the cause of the disagreement.  This meeting is also used as a last ditch attempt to resolve the dispute outside the courtroom.

The Protocol and Costs

One of the reasons it is imperative that each party complies with the Protocol procedure is that the Court enjoys a wide discretion when it comes to the issue of awarding costs.  The UK Judiciary has little patience for belligerence when it comes to parties refusing to comply with the Protocol, or resolve the dispute outside the courtroom if it is clear that there is a real possibility that settlement can be achieved.  |Judges can and will take these factors into account when making a decision as to the awarding of costs, which can run into hundreds of thousands of pounds for complex cases.

Both clients and counsel should work hard to avoid litigation proceedings, due to the costs, publicity and time involved in resolving construction and engineering disputes using this method.  However, sometimes court proceedings are inevitable, and having strong legal representation will benefit you enormously in not only obtaining your desired result but keeping your costs under control.

If you wish to find out more about litigation in the TCC, please phone our London office on 0207 993 6960 to talk with one of our specialists.