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McGlinn v Waltham Contractors Ltd and Huw Thomas Associates & D J Hartigan Associates Ltd, High Court, 6 July 2005

25 July 2005
The issues

Whether Defendant Could Recover Pre Action Costs In Respect Of Abandoned Claims

The facts

The Claimant brought proceedings as a result of alleged deficiencies in buildings works carried out on his property. She brought proceedings against the building contractors, the architects and the engineers. Claims totalled about 4 .5 million pounds.

The parties went through the Pre Action Protocol for Construction and Engineering Dispute stages which led to a mediation, which was unsuccessful. The claims brought in the Particulars of Claim were in certain cases different to those at the start of the pre action protocol procedure. The Second Defendant, Huw Thomas Associates (HTA) noted that the claim made in the proceedings against them did not include claims in respect of over payments to the First Defendant, that had been made at protocol stage. At a Case Management Conference HTA sought an interim payment in respect of its costs which they said had been thrown away at pre action protocol stage in considering and responding to the claims which had been made against them and which were not made anymore.

The decision

1. Section 51 of the Supreme Court Act 1981 provided that the costs of and incidental to proceedings should be in the discretion of the Court. As a matter of principle it seemed unarguable that costs incurred during the pre-action protocol should not be “incidental to” any subsequent proceedings. This appeared to be the decision reached in Re Gibson’s Settlement Trusts (1981) and the position discussed in Callery v Gray by the Court of Appeal where Lord Woolf had specifically noted where an action was commenced and a costs order obtained, the costs awarded would include costs reasonably incurred in complying with the pre action protocol.

2. The question before the Court was whether that principle extended to claims brought in the protocol but subsequently abandoned. In the Court’s view such claims could not be “incidental to” the subsequent proceedings.

3. It would be contrary to the purpose of the pre-action protocols if parties were routinely penalised if they decided not to pursue claims in Court which they had originally included in their protocol claim letters. The whole purpose of the procedure was to narrow issues and to allow a prospective Defendant wherever possible to demonstrate to a prospective Claimant that a particular claim was doomed to failure. It would be wrong in principle to penalise the Claimant for abandoning claims which Defendants had demonstrated were not going to succeed.

Application dismissed.

Comments

This is a case which though far from the world of personal injury will nonetheless both interest and disappoint insurers and local authorities, particularly the latter faced with speculative claims – one could argue that whilst the protocols were indeed aimed to narrow issues as the Judge noted, another part of the CPR, concerned with issue based orders, might have pointed him in a very different direction.

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