Cundall Johnson and Partners Llp v Whipps Cross University Hospital NHS Trust

The Pre-action Protocol for Construction and Engineering Disputes applies to disputed claims for professional fees by consulting engineers, even where the claim may also be characterised as debt recovery. The parties must exchange a clear and concise summary of their cases, but need not provide pleadings or marshal all evidence. The Protocol must be applied proportionately and must not be used tactically to generate unnecessary costs. Where there has been material non-compliance, the court may stay proceedings to facilitate compliance. Relevant considerations include the prospect of settlement, the interests of both parties, potential cost savings and unfairness caused by commencing litigation without proper prior notification of the claim.

The claimant, a firm of consulting engineers, brought proceedings against an NHS trust for unpaid professional fees arising from enabling works and energy-centre works. The defendant applied for a stay on the ground that the claimant had failed to comply with the Pre-action Protocol for Construction and Engineering Disputes and the applicable practice direction.

The claimant argued that the enabling-works claim was merely debt recovery and fell outside the Protocol. It also criticised the defendant’s failure to provide a compliant response and to attend a meeting. The issues were whether the Protocol applied to both claims, whether it had been complied with, and whether proceedings should be stayed.

1. Applicability. The Protocol applied to both claims. A disputed claim for professional fees made by consulting engineers was an engineering dispute within paragraph 1.1. Characterising the claim as debt recovery did not remove it from the Protocol, since debt recovery was not an exception in paragraph 1.2. The defendant, as a public authority, was entitled and obliged to verify substantial professional-fee claims before payment.
2. Content and proportionality. The Protocol provided a framework for sensible discussion and possible settlement. A letter of claim and response need not resemble pleadings. They must contain a clear and concise summary of the respective cases. Paragraph 1.5 required proportionality and prevented the Protocol from being used tactically to secure an advantage or generate unnecessary costs. It did not require the parties to marshal and disclose all supporting details and evidence.
3. Non-compliance. The claimant had not complied with the Protocol. In relation to the enabling works, the contractual basis remained obscure until proceedings were issued. In relation to the energy-centre works, sending an expert report did not replace the required letter summarising the contractual basis of the additional-fee claim. The defendant’s obligations to respond and attend a meeting were not triggered in the absence of a proper letter of claim and proper exchange of information.
4. Stay. Whether to grant a stay was discretionary and depended on all the circumstances. A stay was justified because there was a real possibility of settlement, it could save litigation costs and achieve earlier resolution, and it was unfair to proceed immediately without a proper summary of the claims. The claim form was to stand as the letter of claim. The action was stayed until 1 December 2007 to facilitate compliance.

Not an appeal. The judgment determined the defendant’s application for a stay in first-instance proceedings.