Receiving a letter of claim from a contractor we fell out with
Problem: My company is a contractor that specialises in drylining where we employ self-employed operatives who are paid on a measured basis. From time-to-time, we are also requested to carry out traditional plastering work, but because this only forms a small amount of our business, we contract this element out to other contractors.
On a project we were involved with in 2018, we fell out with the plastering company that we had contracted out the plastering work to. There were a few exchanges of letters afterwards, which argued about quality, time and monies, and then nothing for many months.
We have now received a solicitor’s letter acting on the plastering contractor’s behalf. The letter is titled ‘Letter of Claim’. How should we respond?
Responding to a Pre-Action Protocol
Response: The Letter of Claim has been issued under the Civil Procedure Rules’ Pre-Action Protocol. These rules include several protocols for different kinds of dispute such as professional negligence, personal injury, defamation and construction and engineering. These protocols set out how a dispute is to be conducted before a claimant issues any proceedings and it is vital for both a claimant and defendant to follow the rules. The objectives of the protocol are:
- To encourage the exchange of early and full information about the prospective legal claim;
- to enable parties to avoid litigation by agreeing a settlement of the claim before commencement of proceedings; and
- to support the efficient management of proceedings where litigation cannot be avoided
Under the protocol [for construction and engineering disputes], the proposed claimant is required to send to the proposed defendant a copy of what is called a letter of claim. Such a letter of claim must include such information as a summary of the facts on which each claim is based, the basis on which each claim is made and the nature of the relief required (i.e. damages).
You must acknowledge the letter of claim within 14 days of receipt and respond within 28 days of receipt (this period can be extended). Your response should include information such as what facts are agreed, which claims are accepted and those that are rejected, the basis of the rejection. If you are making a counterclaim, you should also include this in the response, and the proposed claimant then has 28 days to respond to the counterclaim following receipt of your response.
If you continue to dispute the matter, the protocol requires a pre-action meeting between the parties. The aim of the meeting is for the parties to agree such matters as what are the main issues in the case and to identify the root cause of disagreement in respect of each issue, and to consider (i) whether, and if so how, the issues might be resolved without recourse to litigation, and (ii) if litigation is unavoidable, what steps should be taken to ensure that it is conducted in accordance with the overriding objective.
© Michael Gerard 2019
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.