A letter of claim has arrived under the construction pre-action protocol. What do I do?
Send a letter of response within 28 days of receiving it, answering each part of the claim with reasons and any counterclaim of your own.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
The Pre-Action Protocol for Construction and Engineering Disputes is the set of steps the courts expect before a construction claim is issued. It starts with a letter of claim. In it, your main contractor sets out its claim, the contract terms it relies on and the money it wants. Your letter of response is due within 28 days of receiving it. The two sides can agree more time, but no more than 28 days extra for any step. Any objection should be raised within the same 28 days. That covers a claim sent to the wrong company, one that belongs in arbitration, or one the court cannot hear. After your response, the two sides normally meet within 21 days to try to settle. The procedure is a question for your solicitor, so send the letter to them the day it arrives. The figures are where you can do most. Test each head of the claim against your records, and mark what is accepted, disputed or unproven. Then add anything your main contractor owes you, such as an unpaid final account.
Example
Illustrative example. The scenario and figures are invented.
The facts
A drylining subcontractor receives a letter of claim from its main contractor's solicitors. It claims £185,000 for defects and delay on a hospital job. The subcontractor's own final account has £64,000 unpaid.
What happens
- The letter goes to the subcontractor's solicitor that day, and the 28 day deadline goes in the diary.
- Each head is tested against the site records. The £110,000 defects head includes £28,000 already deducted from its payments, and £35,000 for areas another trade finished.
- The £75,000 delay head prices 10 weeks at £7,500 a week. The main contractor's own programme shows the subcontractor's work finished 4 weeks late, not 10.
- The letter of response goes in on day 26. It accepts £47,000 of the defects and £30,000 of the delay, disputes the rest with reasons, and counterclaims the £64,000.
The letter of claim in figures
| Item | Amount |
|---|---|
| Claimed | £185,000 |
| Defects already deducted | £28,000 |
| Defects in another trade's areas | £35,000 |
| Delay not supported by the programme | £45,000 |
| Supported by the records | £77,000 |
| Owed to the subcontractor | £64,000 |
| Net paid by the subcontractor | £13,000 |
The outcome
At the meeting after the response, the claim settles at £13,000: the £77,000 the records support, less the £64,000 owed to the subcontractor. The letter of claim had asked for £185,000.
To have the claim tested head by head, and the figures for your letter of response built, see our Counterclaim Defence service.