Orange Personal Communications Services Ltd v Hoare Lea (A Firm)

The court should take a pragmatic and commercially realistic approach when deciding whether non-compliance with a construction pre-action protocol justifies a stay. Compliance is the norm, but the overriding objective permits the court to avoid a slavish application of procedural requirements where a protocol process would add little, duplicate information already available, or disrupt a useful trial timetable. The court should consider the likely utility of the process, the information already exchanged, the parties’ roles, the effect on connected proceedings, the possibility of compensation in costs, and whether the timetable can be maintained. A claimant who issues proceedings to avoid limitation may do so without first completing the protocol, but must apply promptly for directions. Failure to do so may attract a costs sanction even where a stay is refused.

Orange claimed damages arising from flooding at its Bristol Data Centre. It had already sued Kier Regional Ltd and Haden Young Ltd. Orange later issued a contingent claim against Hoare Lea, its mechanical and electrical design consultant, and APS Project Management Ltd. APS obtained a stay under the Arbitration Act 1996.

Hoare Lea applied for a stay because Orange had not followed the Pre-Action Protocol for Construction Engineering Disputes. The two claims were closely connected, and a joint trial was being prepared for October 2008. The central issue was whether the court should require the protocol process despite the existing pleadings, disclosure, ADR timetable and risk of further delay.

1. Application dismissed. Hoare Lea’s application for a stay was refused. A protocol meeting was to take place if Hoare Lea wished after service of its defence, and the claims were to proceed towards a joint trial.
2. The overriding objective in CPR Part 1 requires attention to expense, proportionality, expedition, fairness and court resources. The court has wide case-management powers. It should avoid slavishly applying a rule, practice direction or protocol where that would undermine the overriding objective. Protocol compliance remains the norm, but non-compliance must be assessed pragmatically and commercially. Costs orders can compensate for procedural failure.
3. The court adopted the pragmatic approach identified in Alfred McAlpine Capital Projects Ltd v SIAC Construction (UK) Ltd [2006] BLR 139, adding the question whether a stay or protocol process would achieve anything useful. Relevant matters included the timing and circumstances of joinder, information already provided, the new party’s role, the effect on the existing timetable, whether justice required a new trial date, costs compensation, and whether the party could otherwise be put in the position protocol compliance would have produced.
4. Here, Hoare Lea already possessed pleadings and disclosure equivalent to, or exceeding, what the protocol process would normally provide. Orange’s claim was contingent, and bilateral discussions were unlikely to narrow the issues materially. A stay would delay the connected claims and risk additional cost and inconsistent findings, whereas the existing timetable could accommodate Hoare Lea and the planned ADR.
5. Orange had a possible limitation difficulty and was excused from completing the protocol before issuing proceedings. It nevertheless should have notified Hoare Lea, the other parties and the court earlier, and should have applied for directions when issuing the claim as required by paragraph 6 of the Protocol. Orange was ordered to bear its own costs of the application and to pay one third of Hoare Lea’s costs, assessed at £1,660.