TJ Brent Ltd & Anor v Black & Veatch Consulting Ltd

Compliance with a pre-action protocol is assessed in substance, not by technical or semantic objections. Minor omissions do not justify costs sanctions where the defendant understood the nature of the claim and was able to respond. A claimant facing a limitation risk may issue proceedings before its loss has fully crystallised, and a later change in the quantified claim does not necessarily require a second protocol process. A party seeking costs sanctions must show a realistic prospect that compliance would have produced mediation and settlement. The court assesses that prospect at the relevant pre-action time and applies the overriding objective pragmatically. Protocols must not be used as tactical instruments to obtain a costs advantage.

The claimants, TJ Brent Ltd and A J Loveland Thames Ltd, sought a contribution from Black & Veatch Consulting Ltd in respect of liability arising from an oil leak at Southern Water’s Andover works. They had issued proceedings before their settlement with Southern Water had crystallised the amount claimed, because of potential limitation difficulties. The defendant applied for its costs on the basis that the claimants had failed to comply with the Pre-action Protocol for Construction and Engineering Disputes.

The court considered whether the claimants’ correspondence constituted substantial compliance, whether the later settlement required a further protocol process, and whether any non-compliance had caused proceedings or costs which might otherwise have been avoided.

1. The defendant’s application for costs was dismissed. The claimants had complied with the Pre-action Protocol in substance. Their correspondence identified the parties, summarised the facts, explained the contractual and tortious basis of the claim, referred to the Civil Liability (Contribution) Act 1978, described the relief sought and repeatedly proposed meetings.

2. The protocol required a substantive, practical assessment. The absence of an address, expert information or a final quantified sum did not prevent the defendant from understanding and responding to the claim. The defendant had in fact given detailed and emphatic responses on duty, breach, causation, limitation and contribution.

3. The claimants were entitled to issue proceedings when they did. A prospective contribution claim could be made before the underlying liability had crystallised. The later settlement with Southern Water did not create such a material change that a new letter of claim was required, because the defendant already understood the substance of the claim.

4. Even if there had been non-compliance, the defendant had to establish a realistic prospect that compliance would have led to a mediation and a resolution. The relevant assessment was the position before proceedings, not hindsight. The defendant’s refusal to attend meetings or engage in without-prejudice discussions provided no evidential basis for finding that settlement would probably have followed.

5. The court distinguished Charles Church Developments v Stent Foundations Ltd [2007] EWHC 855 (TCC), where there had been wholesale non-compliance and a good prospect of settlement. The approach in Orange Personal Communication Services Ltd v Hoare Lea [2008] EWHC 223 (TCC) was applied: the overriding objective justified a pragmatic approach and discouraged slavish reliance on individual protocol requirements. The court was slow to permit protocol rules to be used for a tactical or costs advantage.