A lot of people often ask why it costs so much to send or respond to a pre-action protocol letter. The answer requires a little background.
What is a pre-action protocol letter?
This letter is really a warning. It says “if you don’t stop, litigation will start.” The Civil Proceedings Rules 1998 (“CPR”) require a person to send this letter before they sue to give the other party an opportunity to resolve the issue and avoid court. You MUST send this letter before filing a claim. If you do not, you can be penalised under the CPR (for e.g. by not getting your costs).
What does it contain?
A pre-action protocol letter does several things. It sets out the basis of your legal claim, gives the other party a deadline to respond and warns that if there is no response, legal proceedings will be filed without further notice.
A response to a pre-action protocol letter will set out your side of the story i.e. your defence to the person’s claim.
Why so expensive?
With that background, here’s the response to the question: a well-drafted pre-action protocol letter (or response thereto) can possibly end legal proceedings before they start. If you set out your position well, the other party is much more likely to have a discussion with you. This means that you have a pretty decent chance of saving several thousand dollars in litigation. Of course, the flip side is that if you have a shoddily drafted letter or response, the other person may well want to take their chances before a judge.
To properly draft this kind of letter involves a lot of the same work that goes into preparing a case. You have to take proper instructions, research the law and ensure that you present your client’s position well. It’s almost like a mini statement of claim or defence. The cost of a pre-action protocol is a reflection of the time it takes to prepare it.
You see one page, but the reality is that it takes several hours to present a letter that may save you from spending thousands in the long-run.
Disclaimer: The information provided in this article does not constitute legal advice. If you have a legal issue, we urge you to consult a qualified attorney.
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