Modern society doesn't believe in accidents and it no longer gives professions its unmitigated respect. The average professional is expected to get results and is pilloried if he doesn't. Imperfection begets compensation.

Paradoxically, aggressive, "rottweiler-style" litigation is also unfashionable. The Civil Procedure Rules (CPR) were introduced to curtail the perceived rush to the courts. Nowadays, litigation should be the last resort, not the first response, of an aggrieved party.

The pre-action protocols are essential to this post-rottweiler approach. They aim to focus parties' minds on resolving disputes without litigation; facilitate better, earlier exchange of information; promote prompt, fair settlements and, if a dispute cannot be settled, lay the ground for the efficient conduct of ensuing litigation.

On July 16, the Professional Negligence Pre-action Protocol (Prof Neg Protocol) comes into force, joining those on personal injury, clinical negligence, defamation, and construction and engineering disputes.

The Prof Neg Protocol covers claims for negligence and breaches of contractual and fiduciary duty against professionals. "Professional" is not defined. Parties are required to act "reasonably" and use the protocol, instead of arguing about anyone's status.

Having said this, the protocol does not cover architects, engineers, quantity surveyors and doctors, as they are covered by the construction and engineering and clinical negligence protocols. The parties are free to use any other dispute resolution methods at any stage, but they must still follow the Prof Neg Protocol before actually starting litigation.

The claimant should write a preliminary notice to the professional once he/she decides a claim might be brought. This outlines the grievances and gives a general indication of the claim's financial value. The professional has 21 days to acknowledge receipt, but neither party has to take any further action at this stage. This allows them to "take stock" and decide whether their dispute can be resolved before a Letter of Claim (LoC) is served.

The LoC starts the protocol timetable running. It should be written as soon as the claimant decides there are grounds for a claim and include a full explanation of what the professional has done wrong, how this caused the alleged loss and an estimate of the alleged loss. It should also have supporting documentation.

Proper response
The professional has 21 days to acknowledge the LoC and a further three months to investigate the claim. The professional then sends the claimant a letter of response and/or a letter of settlement.

The response should contain any admissions or denials, make specific comments on each allegation and give the professional's estimate of any loss. The settlement should set out the professional's views on the claim and make a "without prejudice" settlement offer. Both should be accompanied by any appropriate documents.

The claimant can begin proceedings if there is a bare denial. Otherwise, the parties must spend six months, dating from the LoC's acknowledgement, trying to settle the matter. They can agree to extend this period but, if they cannot settle, the claimant may then begin proceedings. The claimant must give the professional 14 days' notice before beginning proceedings.

Friendly news
On the whole, the Prof Neg Protocol is good news for professionals and their insurers.

It stresses flexibility and reasonableness, and encourages parties to use whichever dispute resolution method they think will achieve settlement. This is an improvement on the previous, almost solipsist, protocols and makes sense given that there are another 20-plus protocols in the pipeline. Excessive formality would cause confusion and disputes.

Its timetable is defendant-friendly. The construction and engineering protocol gives defendants only 28 days to respond to LoCs. The ProfNeg timetable gives professionals at least three months to do so.

The timetable is also settlement-friendly. The preliminary notice gives parties breathing space, the six-month negotiation period is sensible, as are the provisions to extend the timetable to obtain a settlement, and the 14-day proceedings warning is a prudent long-stop. Reasonableness ousts formality.

Formality is stressed, however, in the highly detailed LoC and response. A claimant will have to spend time and money preparing the LoC and its supporting documentation.

This should discourage speculative claims by those hoping that an aggressive, but vague, LoC will produce a payoff by professionals and insurers unwilling to spend excessive sums defending a claim. Clear facts on all sides should also encourage swift and fair settlements.

Unfortunately, the Prof Neg Protocol does not oblige a claimant pay a professional's costs if he decides not to begin proceedings. These may be small at the claim's beginning but they won't be after, say, six months' negotiations.

The fact that the claimant may have spent huge sums of money will be little comfort to the professional and his insurers. The claimant had a choice, they didn't.

The CPR are regularly reviewed. There should be pressure for an amendment that claimants who drop claims after the response should pay professionals' reasonable costs.

That would be a fair improvement on the otherwise first-rate Prof Neg Protocol.

  • Gary Meggitt ACII is a solicitor at Fishburn Morgan Cole in London.