FLK1 Disputes Flashcards
What is alternative dispute resolution?
Litigation is considered the last resort and sanctions may be imposed on those clients who refuse to consider other options. Alternative dispute resolution (ADR) is a collective term which refers to any means of settling disputes outside of the traditional litigation process.
Negotiation, in which the parties and the lawyers discuss possible solutions whether in formal meetings or by correspondence, is a form of ADR which is used routinely throughout the litigation process.
In practice, the vast majority of claims are settled and negotiation is usually a key element in achieving this outcome.
Although there are a number of other different types of ADR the two most important are arbitration and mediation.
ADR, such as mediation, is a means of resolving disputes with the assistance of an independent third party who may help the parties to reach their own solution but who cannot impose a solution.
It is voluntary and confidential or ‘without prejudice’. This means that if it fails and court proceedings are taken, the court will not be made aware of the ADR until after the judge has dealt with the issues of liability and the award of damages. The parties choose the process and can withdraw at any time before a settlement is reached. If either party does not like the proposed solution, they do not have to accept it.
Arbitration is also voluntary, but only in the sense that the parties either voluntarily entered into an arbitration agreement or agreed to decide the matter in this way once a dispute arose. If the former, the effect is that one party may force the other to arbitrate against their will provided the original contractual agreement to arbitrate is valid.
In contrast, litigation is not voluntary (save that the claimant chooses to issue a claim in the
first place). Once the case is started, usually, neither party can withdraw without paying the
opponent’s costs. If the parties are unable to negotiate a settlement or otherwise resolve their
differences through ADR, the court will impose its own solution which may be enforced by the
party who obtains judgment.
When should ADR not be considered?
When a dispute arises, a solicitor should discuss with the client the availability of ADR. If the client is willing (or has already agreed) to participate in ADR, it should be used unless:
a) it is obviously inappropriate, for example because an injunction is required;
b) the other party is unlikely to co- operate in the process; or
c) the other party cannot be trusted to comply with an award.
Although actively promoted by the courts, there is no point in proceeding with ADR if it will inevitably fail. Nevertheless, a party who decides not to engage in ADR must be made aware that penalties may well be imposed for this failure, unless they can justify their stance to the court.
The litigation process is subject to rules, one of which specifically requires the parties to consider the use of alternative dispute procedures, if appropriate.
As a consequence, parties who choose to litigate may well receive judicial encouragement (and sometimes a degree of pressure) to attempt ADR although they cannot be ordered by a court to pursue this route.
The importance the court attaches to proposals for ADR is evidenced by the provisions of the Civil Procedure Rules 1998 which dictate how a case is litigated; and a failure to respond to a reasonable proposal to attempt settlement by ADR may have a significant impact on any subsequent order for costs.
What do the parties need to complete during the course of the court proceedings with regards to ADR?
During the course of the court proceedings the parties complete what is known as a directions questionnaire and, to ensure that clients are fully aware of the importance and implications of ADR, solicitors are required to confirm they have explained to their client:
(a) the need to try to settle;
(b) the options available; and
(c) the possibility of costs sanctions if they refuse to attempt to settle.
The message is clear – clients should always consider ADR and engage in the process unless there are convincing reasons not to do so; and even then, they should be prepared to justify their decision before a sceptical judge if necessary.
What is an essential feature of ADR?
The independence of the third party is an essential feature of ADR, as is the fact that (with the exception of arbitration) they cannot impose a solution.
Because of this, the parties are more likely to be open in their discussions and less likely to be aggressive towards each other.
As a consequence, the prospects of reaching a settlement are higher. A further advantage is that the independent third party will not only be trained to act as a neutral, but they also should have the appropriate industry or commercial knowledge required to understand the dispute.
This may allow them to come up with ideas the parties may not have thought of and which solve the problem without either side losing face.
What is the procedure for mediation?
In a typical mediation, the parties will agree an independent third person or body who will act as a ‘go- between’ known as a mediator.
The mediator will be sent written statements from both parties and, thereafter, will discuss the case with them on a ‘without prejudice’ basis.
Because any future judge in the proceedings will not be made aware of the discussions, the parties should feel free to engage in frank exchanges with both the mediator and each other.
These conversations will also assist the mediator in identifying the real areas of disagreement and the points that are most important to the respective parties, with the aim being to move the parties towards constructive solutions to the problem.
In many cases, the mediator and the parties will meet in the same building. This enables any issues to be dealt with quickly because, if necessary, the parties can meet face to face to resolve their differences. There are, however, other forms of mediation in which the dispute is dealt with by correspondence, telephone conversations or online with the use of technology.
What are the advantages of mediation?
Apart from the fact that an independent third party may find it easier to lead the parties to a settlement, mediation has other attractions.
- Cost and speed
Mediation can be significantly cheaper than both arbitration and litigation, primarily because the process is quicker.
A skilled neutral can often help the parties to resolve their dispute in a relatively short period of time.
Nevertheless, clients should not be given the impression that mediation comes at ‘bargain basement’ prices.
The parties have to pay the third party for their services and, in addition, lawyers will usually be instructed.
However, if the mediation is successful, there will be a significant reduction in the amount of time the lawyers would have spent in preparing and presenting the case and this, in itself, will save costs.
- Flexibility
Mediation is also very flexible, because the parties may choose the procedure to be followed.
There are no legal requirements and thus no need to comply with any statutes, rules of court or even case law.
- Privacy
Mediation takes place in private so that clients, customers and the public are unaware of the circumstances or the outcome of the dispute. This may be important where the party’s reputation is an issue or where there may be possible future claims from other litigants.
- Preserving a business relationship
Mediation is also ideal for cases where the parties to the dispute will need to continue to deal with each other. The fact they have chosen a non- confrontational method of solving their problem makes it much easier for them to continue their relationship, since the solution is theirs and has not been imposed upon them.
- Commercial reality
A third party unconnected with the dispute may be able to assist the parties to arrive at realistic and workable terms of settlement. This could include arrangements that a court could not order, such as discounts on future orders. In contrast, litigation with its final court judgment will be decisive but the process carries inherent risk and uncertainty.
- Ability to withdraw
If the client is unhappy with the progress, mediation allows them to withdraw at any time.
What are the disadvantages of mediation?
- Inappropriate for the matter
There are occasions where mediation is simply not appropriate, such as where the client needs a ruling on a point of law or if an injunction is required.
Matters involving allegations of fraud or other commercially disreputable conduct are also generally unsuitable for mediation.
However, although in most other cases the advantages of mediation will usually outweigh the disadvantages, these must also be considered.
- Disclosure
Because there are no formal procedures for disclosure of documents and evidence, there is a risk the parties may resolve the dispute without knowing all the facts.
This may lead to a decision that is subsequently found to be unjust. However, many business clients take the view that a quick decision, even if it is not completely accurate, is better than wasting time and money on a protracted dispute in order to get a (potentially) more correct outcome.
- Privacy
If the client requires public vindication – perhaps to ensure that any damage to their reputation is repaired – privacy is a disadvantage as they will lose the opportunity to demonstrate they were not at fault.
- Ability to withdraw
As a general principle, no one can be forced to engage in mediation against their wishes.
Furthermore, even if the parties have started to resolve a dispute by mediation, they may withdraw at any stage before a solution has been agreed despite objections from the other party. It will then
usually be necessary to resort to litigation.
As with privacy, the ability to withdraw is both an advantage and a disadvantage. A party who decides to walk away from the mediation process will be pleased they can do so, whereas the other party is likely to be unhappy at the time and money expended without a resolution.
Is a mediation outcome enforceable?
Even if an agreement is reached, it is not automatically binding as the client cannot enforce this like a court judgment.
However, if the parties do agree to terms suggested as a result of mediation, they have entered into a contract. If one of the parties does not carry out that contract, they may be sued for the breach.
How does arbitration arise?
The parties may be contractually bound to use arbitration and many business contracts contain a clause requiring the parties to submit to arbitration in the event of a dispute. It is common in certain industries such as construction and shipping, for example.
In the absence of such a clause, the parties may agree to arbitration once a dispute has arisen and may choose their own arbitrator with the relevant expertise.
What is the procedure for arbitration?
The dispute is referred to an independent arbitrator. The person, professional or trade body may be specified in the original contract; alternatively, the parties may choose their own arbitrator with the relevant experience. An arbitration process will be adopted but this will be less formal than the court procedure.
Once the third party has reached their decision, this is binding on both parties to the dispute.
What are the advantages of arbitration?
Many of the advantages of the parties agreeing to arbitration rather than litigation are similar to those of mediation. The main ones are:
(a) arbitration is likely to be quicker than going to court and may be cheaper although there will be costs implications in retaining the services of an arbitrator, who may be a highly qualified and experienced expert in their field;
(b) the procedures are less formal;
(c) the decision is made by an impartial third party with expertise in the matter;
(d) arbitration takes place in private thus retaining confidentiality – particularly important if the parties wish to preserve a business relationship or to ensure that customers or competitors are unaware of the dispute or the outcome;
(e) the solutions reached are often more practical than those a court has the power to order; and
(f) the decision is binding on the parties.
The binding nature of the outcome is the most important distinction with mediation.
What are the disadvantages of arbitration?
The main disadvantages are:
(a) the dispute may not receive the depth of investigation it would receive in the courts (depending upon the procedures adopted); and
(b) certain remedies such as injunctions are not available.
Furthermore, arbitration is unlikely to be a cheap alternative as the arbitration expert or panel will need to be paid and parties often want to be represented by lawyers, particularly if the amounts in dispute are significant.
One disadvantage mirrors an advantage: the decision is binding with very limited rights of appeal.
Is the outcome if arbitration enforceable?
Once a decision has been reached, the winning party to an arbitration can apply to the High Court under s 66 of the Arbitration Act 1996 for permission to enforce the arbitration award as if it were a court judgment.
What is the main advantage of litigation?
If the parties either cannot or will not engage in ADR, they will be left with no alternative but to proceed by way of litigation through the courts. Once they have done so, neither party can withdraw without paying the opponent’s costs. If the parties are unable to negotiate a settlement, the court will impose its own solution that may be enforced by the successful party.
Indeed, this is the main advantage of litigation as it breaks the deadlock between the parties, albeit at a cost.
Most civil disputes are between individuals and/ or companies and they may arise in many different contexts. The most common types are contractual disputes, perhaps involving the sale of unsatisfactory goods, and negligence claims in relation to, for example, road traffic accidents, injuries at work or inadequate professional advice.
What is the aim of the CPR?
Civil litigation is governed by the Civil Procedure Rules 1998 (CPR), which dictate the procedure that must be adopted when pursuing a claim through the courts.
The aim of the CPR is to provide a more ‘user- friendly’ system of resolving such disputes. This has become increasingly important due to the increase in litigants in person (those individuals who represent themselves) who are unlikely to have the degree of legal knowledge of a lawyer.
To ensure that the process proceeds at a reasonable pace, with the consequent reduction in cost, the courts have control over the conduct of the matter. This includes making appropriate directions, setting strict timetables and ensuring the parties comply with them, backed up by a system of sanctions that the court can impose.
Give an overview of the 5 stages of a civil claim
Stage 1: pre- commencement of proceedings
There are a number of steps to take before issuing proceedings and the starting point is the client – what are their objectives, both legal and commercial? Having established this, evidence must be gathered to confirm the viability of the claim and the prospects of success. Costs will be at the forefront of the client’s mind and should be addressed; and serious consideration must be given to ADR.
Pre- action protocols govern the steps the parties should take before commencing a court case. The parties must establish what issues are in dispute, share information that is available to them concerning these matters and endeavour to resolve the issues. Failure to follow a protocol step or its spirit, without good reason, will usually incur a sanction such as a reduction in the costs recovered by that party if litigation proves successful.
Immediately after collecting sufficient evidence to substantiate a realistic claim, the potential claimant should send to the proposed defendant a letter detailing the claim; and the defendant is expected to send a letter in response.
Only after these steps have been completed should litigation be started.
Stage 2: commencement of the claim
Proceedings are commenced by a claim form, which must be served on the defendant together with full details of the claim, called particulars. If the defendant wishes to contest the claim, they are required to file at the court and serve on the claimant a defence. At this point, the court will allocate the matter to a track, with higher value cases being given greater attention and resources.
Stage 3: interim matters
Once on a track, the court carefully manages a case to ensure the matter progresses towards the trial date. Directions are given to the parties listing all the steps they must take to prepare for trial and a strict timetable is imposed as to when each step must be taken. This will include the parties disclosing any relevant documents that are in their possession and that impact upon the case (whether they assist or not). Evidence the parties wish to rely on, such as witness statements and experts’ reports, must then be exchanged; and costs will also be scrutinised.
In addition, the parties may apply to the court for any specific orders that might be required, perhaps to compel an opponent who has neglected to take a required step in accordance with the timetable to do so.
Stage 4: trial
The judge will hear the evidence at the trial and make a decision as to the outcome, resolving all issues of liability and quantum (damages). As to costs, the judge will decide if any party should pay the other’s costs and, if so, how much.
Stage 5: post- trial
A party who is unhappy with the judgment may decide to appeal all or part of the trial judge’s decision.
If the damages and/ or costs are not paid as required, the party will have to apply to the court to enforce the judgment.
Most commonly, this involves instructing court officials to attend the debtor’s premises and to take their belongings to be sold at public auction. The proceeds are then paid to the appropriate party.
What needs to be considered before a civil claim can be brought?
(a) Can the claim be brought at all?
(b) Who are the parties?
(c) Does the defendant have the means to pay a judgment?
(d) What are the merits of the case?
(e) What steps must be taken before proceedings are issued?
In terms of limitation what needs to be considered before a civil claim can be brought?
Before issuing proceedings, the solicitor must ensure that the client is not precluded from making a claim at all.
The Limitation Act (LA) 1980 prescribes strict time limits with which the claimant must comply. If these are missed, unless there are exceptional circumstances, that is the end of the matter as the claim will be ‘statute barred’.
The rationale behind imposing these deadlines is to prevent a potential defendant remaining under constant threat of litigation for events that happened many years before; and to recognise that the passage of time results in evidence being lost and witness accounts becoming less reliable.
From the outset, a solicitor must ascertain when the limitation period began and when it will expire.
These dates should be diarised to remind the lawyer that time is marching on, particularly if the expiration of the relevant period is drawing near. It is vital that proceedings are issued before the limitation period expires, otherwise the solicitor is likely to face a claim in negligence.
What are the consequences if a party misses a limitation period?
If a party has missed the limitation period, the defendant will have a technical defence to the claim. This means that, if the court agrees the claim is statute barred, the claimant will not succeed in the litigation.
What are the limitation periods for contract or tort?
For claims founded on contract or tort, the basic rule is that the claimant has six years from the date of the cause of action to commence their proceedings and time runs from this point.
However, when calculating the date on which the limitation period expires, usually the day on which the cause of action accrues is excluded from the calculation as is apparent from the examples below.
In contract, the cause of action accrues as soon as the breach of contract occurs. This will be a question of fact to be determined by the court.
In tort, the cause of action accrues when the tort is committed. In negligence, this will be when damage occurs as a result of a breach of duty.
What is the limitation period for personal injury matters?
The limitation period for personal injury matters is three years. This runs from the date of the cause of action or the date of knowledge of the person injured, except for children where the time limit does not start to run until their 18th birthday.
What is the limitation period for latent damage?
Furthermore, in a claim based on negligence where the damage is latent (hidden) at the date when the cause of action accrued, s 14A of the LA 1980 provides that the limitation period expires either:
a) six years from the date of the cause of action; or
b) three years from the date of knowledge of the damage, whichever is later; but
c) no later than 15 years after the date of the negligent act or omission.
What needs to be remembered with limitation periods and contracts?
In a contract case, it is very important to check whether a different limitation period is specified in the contract.
This is because any such provision is usually shorter than the statutory limitation periods referred to above, and the claim should therefore be commenced within the contractually specified period.
Can a limitation period be extended?
The general rule is that actions commenced outside the limitation period where the defendant has raised the issue as a defence will not be allowed to proceed, although extensions may be available in exceptional circumstances.
What needs to be remembered when figuring out who the defendant is when bringing a claim?
All potential defendants should be identified at this early stage to avoid incurring costs later on, for example, to amend court documents. Often this will be straightforward as usually there will only be one potential defendant, but there are occasions when it is less so.
If an employee commits a tort when acting in the course of their employment, both the
employee and the employer should be sued, as the latter is vicariously liable for the
former.
A consumer may have a cause of action against both the retailer and the manufacturer of a defective product.
There are special safeguards in place for children (a person under 18) and protected parties (a person who is incapable of managing their own affairs because of a mental disorder as defined by the Mental Capacity Act 2005).
Because these individuals are considered in law to be unable to make the decisions required of a party to court proceedings, they must have a litigation friend to act on their behalf. For children, this will usually be a parent or guardian.
A litigation friend must be able to fairly and competently conduct proceedings on behalf of the party and have no adverse interest.
A further safeguard is provided to these parties by the requirement that any settlement reached involving a child or a protected party will only be valid if approved by the court.
How should a defendant be sued?
Prospective defendants must be sued in their correct capacity and it is important to check this as a person may have entered into a contract in one of a number of different ways. Equally, a tort may have been committed or suffered by different legal entities.
The solicitor should confirm whether the defendant is:
a) an individual;
b) a sole trader;
c) a partnership;
d) a limited liability partnership (LLP); or
e) a limited company.
Is the defendant worth suing?
Suing a defendant who is on the verge of either bankruptcy or liquidation is a pointless exercise as enforcement of any judgment obtained would be impossible. If the client has any concerns about the prospective defendant’s ability to pay, further enquiries should be made.
These could include:
a) a search at Companies House to ascertain information about the financial position of a company;
b) a bankruptcy search of an individual;
c) instructing an inquiry agent (although the costs of this must be considered); and
d) the use of various internet search engines to see if there is any relevant information there.
If the outcome of these investigations is that the defendant is struggling financially, although making a claim is possible, it would not be viable.
What is a specified claim?
A claim is specified if it is for a fixed amount of money; usually, it is a claim for a debt owed. Because the amount is known already (perhaps from an invoice), the figure owed can be calculated by mere mathematics. Examples would include the price of goods sold and commission due under express contractual terms.
What is an unspecified claim?
If the court will have to conduct an investigation to determine the amount of money payable, the claim is an unspecified one even if the claimant puts forward some figures. Thus, damages claims are usually unspecified.
e.g. Loss of profits where this is not certain
What happens if there is a mixture and some parts of the claim are specified and some are unspecified?
In circumstances where the claim is a mixture of specified and unspecified amounts, the entire claim will be treated as unspecified.
How does a solicitor determine a cause of action?
A cause of action is the legal basis of a claim, such as breach of contract or negligence. To determine whether a client has a cause of action and the likelihood of success, it is essential at the outset that a solicitor analyses all the available evidence, whether given orally by the client and any witnesses or contained in documentation.
Contract dispute
A party enters into an agreement with another, one or more of the terms are breached and this causes the other party to suffer a loss.
Breach of express terms, for example:
* non- payment of monies due (debt claim); or
* failure to deliver a consignment on time.
Breach of statutory implied terms such as:
the goods supplied were not of satisfactory quality, contrary to s 14(2) Sale of Goods Act 1979.
Purpose of the damages:
To put the claimant in the position they would have been in had the contract been properly performed.
Tortious (negligent) dispute
A duty of care is owed by one party to another, the duty is breached and this causes the other party to suffer loss (financial and/ or otherwise).
Negligence including:
* a road traffic collision where a motorist breaches their duty of care to another road user by failing to brake in time; or
* medical negligence where a doctor misdiagnoses a patient.
Negligent mis- statement such as where:
a financial adviser gives inadequate investment advice to a client.
Purpose of the damages:
To put the claimant in the position they would have been in had the negligent act not occurred.
Tortious (nuisance) dispute
Where use or enjoyment of land is unreasonably interfered with by another landowner.
Examples are:
* excessive noise from a neighbour;
* tree roots causing damage to an adjoining property;
water flooding from another’s property.
Purpose of the damages:
To put the claimant in the position they would have been in had the nuisance not occurred.
Misrepresentation
An untrue or misleading statement of fact by Party A that induces Party B to enter into a contract with Party A and that causes loss to Party B.
An example is:
- a car salesman who induces a customer to purchase a vehicle by falsely representing that it has not been involved in any road traffic collisions when this is untrue.
Purpose of the damages:
To put the claimant back to the position they were in before the contract was entered into.
How does a solicitor create a case study of a breach of contract?
Although it is important to identify the relevant cause of action, it is equally vital to understand how this impacts upon the progression of the matter.
The legal elements form the basis of the statements of case (the documents that outline the parties’ positions) and the substantive law provides the structure upon which the evidence will be draped.
Take a claim for breach of contract as an example.
(a) Existence of contract
First, it must be established that there was a contract although, in practice, this will rarely be disputed.
(b) Terms relied on (express and/ or implied)
Next, the lawyer should establish the terms. If the dispute concerns what express terms were agreed in a contract, a written agreement will assist. Where the contract was made orally, the situation is more complex as often the only evidence available is from the parties who made the contract and who are now locked in dispute. In addition, where a contract is entered into in the course of business, there may be implied terms that are imposed by statute. These apply to both written and oral contracts.
(c) Breach of those terms
Thereafter, the solicitor must consider how the client will prove there was a breach that resulted in recoverable losses. What does the client say the opponent did (or failed to do) that amounts to a breach of the contract? This is a question of fact, and the solicitor must assess the evidence the client has to prove the claim.
(d) Consequences
Once a breach has been established, the factual consequences of that breach should be identified.
(e) Damage and loss
Finally, each item of loss claimed will have to be proved.
Although an initial case analysis would be conducted, as the case develops, the solicitor should continually review which issues remain in dispute and how these are to be proved.
What is a pre-action procedure?
Before issuing court proceedings, the parties are required to comply with various pre- action rules, known as pre- action protocols.
These are annexed to the CPR and, over time, a number have been developed, for example in relation to:
a) debt claims
b) personal injury
c) construction and engineering
d) professional negligence.
What is the Practice Direction on Pre- Action Conduct and Protocols (PDPAC)?
In addition, if no relevant protocol exists, there is a Practice Direction on Pre- Action Conduct and Protocols (PDPAC), which contains general guidance to be followed in such cases. Many of the provisions mirror those of the protocols so that, effectively, all civil cases are dealt with in a similar way.
The PDPAC and the protocols are important elements of civil litigation, and solicitors must ensure they understand the content and are able to apply the provisions effectively.
What is the purpose of the Practice Direction on Pre- Action Conduct and Protocols (PDPAC)?
The objective of the PDPAC and the protocols is to initiate and increase pre- action contact between the parties. In particular, to encourage better and earlier exchange of information so the parties are in a position where they may be able to settle cases fairly and early without litigation, and to enable proceedings to run to the court’s timetable and efficiently if litigation does become necessary.
These aims are consistent with the overriding objective of the CPR.
What are the core principles of the PDPAC and the protocols?
There are elements of the PDPAC and the protocols that are common to all.
(1) Litigation should be a last resort. The parties should consider whether negotiation or some other form of alternative dispute resolution (ADR) might enable them to settle their dispute without commencing proceedings.
(2) The parties should exchange sufficient information in order to:
(a) understand each other’s position;
(b) make decisions about how to proceed;
(c) try to settle the issues without proceedings;
(d) consider a form of ADR to assist with settlement;
(e) support the efficient management of those proceedings; and
(f) reduce the costs of resolving the dispute.
(3) The steps taken should usually include:
(a) the claimant writing to the defendant with concise details of the claim;
(b) the defendant responding within a reasonable time; and
(c) the parties disclosing key documents relevant to the issues in dispute.
(4) Only reasonable and proportionate steps should be taken by the parties to identify, narrow and resolve the legal, factual and/ or expert issues.
(5) Where a dispute has not been resolved after the parties have followed the Practice Direction, they should review their respective positions to see if proceedings can be avoided and at least seek to narrow the issues in dispute before the claimant issues proceedings.
(6) If a dispute proceeds to litigation, the court will expect the parties to have complied with the Practice Direction. A party may be sanctioned for failing to do so. Early disclosure of the substance of the claim and supporting evidence, particularly relevant documents, will assist the parties in making an informed decision on the merits of the case at a preliminary stage. This, combined with the active encouragement of ADR, should lead to a greater number of settlements without the need for court proceedings. The volume of pre- action work means that, even if proceedings prove unavoidable, the costs of the litigation should be reduced. It is for these reasons that there are penalties for non- compliance. Although the purpose and principles of the PDPAC and the protocols are similar, in recognition of the differences between types of claims, a variety of protocols are specifically tailored to their individual requirements. Any claims that fall outside the protocols must proceed in accordance with the PDPAC.
How does the PDPAC ensure that no civil claim escapes the requirement to follow the pre-action procedures?
The Practice Direction is clear that, before commencing proceedings, the parties must exchange information so they can understand the issues, consider ADR and attempt to settle the dispute without litigation.
The importance of ADR is recognised specifically in paragraph 8 of the PDPAC, which instructs the parties to give consideration to it. If proceedings occur, both the claimant and defendant will normally be required by the court to provide evidence that they reflected upon alternative means of resolving the dispute. The courts take the view that litigation should be a last resort, and that claims should not be issued prematurely when a settlement is still actively being explored. Parties are warned that if this provision is not followed then the court must have regard to such conduct when determining costs.
The PDPAC expressly states that only reasonable and proportionate steps should be taken by the parties to try and resolve the matter and costs incurred should also be proportionate. This will include the claimant writing to the defendant with concise details of the claim, including a summary of the facts, the sum due and how the amount is calculated. Thereafter, the defendant must provide a response within a reasonable time – 14 days in a straightforward claim and three months maximum in a complex case – to include confirmation of whether all or part of the claim is accepted, and if not the reasons why, together with details of any counterclaim. Key documents relevant to the issues in dispute should also be disclosed.
What are the consequences for not following the terms of the PDPAC?
A failure to comply with both the Practice Direction and the substance of any approved protocol that applies to the dispute may lead to sanctions later on. Where non- compliance has led to proceedings that might otherwise not have been commenced, or has led to unnecessary costs being incurred, the court may impose penalties. These can include an order:
(a) that the party at fault pays some or all of their opponent’s costs (perhaps on the penalty, indemnity basis);
(b) depriving a claimant who is at fault of some or all of the interest they may subsequently be awarded on any damages recovered; or
(c) requiring a defendant who is at fault to pay interest on any damages awarded to the claimant at a rate of up to 10% per annum above the base rate.
The CPR also include a provision that a person who knowingly makes a false statement in a pre- action protocol letter or other document prepared in anticipation of legal proceedings may be subject to proceedings for contempt of court.
What core steps must be followed in the PDPAC?
Claimant sends letter before claim including:
a) concise details of the claim
b) a summary of the facts
c) what C wants from D (if money, how this is calculated)
d) key documents
Defendant sends a letter of response:
a) within a reasonable time
b) must confirm if the claim is accepted
c) if not, explain the reasons
d) indicate if there is a counterclaim
e) include key documents
Claimant replies and the parties consider:
a) negotiation
b) ADR
c) appointment of expert(s)
Stocktake: before issuing proceedings the parties should:
a) review their positions
b) consider whether proceedings can be avoided
c) if not, narrow the issues in dispute
Sanctions for non-compliance:
a) party at fault pays some or all of opponent’s costs (perhaps on an indemnity basis)
b) C is deprived of some or all of the interest on damages
c) D is required to pay a higher rate of interest on damages
What is the Pre-Action Protocol for Debt Claims?
The vast majority of claims issued each year are for straightforward debt matters such as unpaid invoices for goods sold and delivered or for services provided, for example, construction works.
The claim may also arise because money has been borrowed and not repaid. Because the amounts involved are often relatively small, firms handling large numbers of debt claims will often utilise specialist case management software to ensure the monies can be recovered efficiently and economically.
Debt claims are covered by the Pre- Action Protocol for Debt Claims (PPDC).
a) This applies to any business including sole traders and public bodies (the creditor) that brings a claim against a debtor who is either an individual or a sole trader (the debtor).
b) It does not apply to business to business debts (unless the debtor is a sole trader). Because the PPDC is specifically aimed at debt claims, the focus is slightly different. The potential claimant must give full information on the debt owed, including an up- to- date statement of account with details of interest and charges, and how the debt can be paid.
The standard Reply Form, Information Sheet and Financial Statement forms that are annexed
to the protocol should also be included. This is to encourage settlement, perhaps by way of agreeing repayment plans.
Recognising that most debtors will be individuals, they are given a little longer to respond – 30 days – and court proceedings cannot be issued before this deadline. The creditor should also allow extra time if necessary for the debtor to seek legal or debt advice or in order to pay.
What is the Pre- Action Protocol for Professional Negligence?
At the other end of the spectrum, the Pre- Action Protocol for Professional Negligence applies when a claimant wishes to make a claim against most types of professionals as a result of alleged negligence.
As with all protocols, the primary aim is to set out a code of good practice, achieved by listing the steps the parties should follow before commencing court proceedings. Although many are the same as for the Practice Direction on Pre- Action Conduct, there are some differences.
The first additional requirement is that a party is encouraged to notify the professional in writing of any intended claim. This letter (the Preliminary Notice) contains information about the claimant, a brief outline of the claimant’s grievance against the professional and, if possible, a general indication of the financial value of the potential claim.
The professional should be instructed to inform their insurers immediately and to acknowledge the notice in writing within 21 days of receipt.
Next, the claimant should write a Letter of Claim giving full details of the issues and attaching key documents. The professional must acknowledge this in writing within 21 days of receipt.
Thereafter, they have three months to investigate and to respond.
The Letter of Response sets out whether the professional admits the allegations and if not why not, with accompanying documents. Alternatively, or as well as the Letter of Response, a Letter of Settlement may be sent if the professional intends to make proposals for settlement of all or part of
the claim.
If the Letter of Response denies the claim in its entirety and there is no Letter of Settlement, it is open to the claimant to start court proceedings. In any other circumstance, the professional and the claimant should instigate negotiations with the aim of resolving the claim within six months of the date of the Letter of Acknowledgment. If matters cannot be resolved, there must be a final Stocktake in which the parties review their positions, or at least narrow down the issues, before court action is taken.
As with all the protocols and the Practice Direction, the parties must consider ADR.
How is it decided which country’s laws apply?
The starting point for a claim with international implications is to decide which country’s laws apply.
The United Kingdom’s exit from the European Union (EU) means that, for proceedings issued in an English court after 1 January 2021, the old jurisdictional rules of the EU are no longer valid. The effect is that each country will apply its own domestic rules to cases where the UK is involved.
Choice of law in contract
All contracts should have a clearly worded clause stating what law will govern the contract to avoid uncertainty in the event of a dispute arising. Usually, the parties will be able to nominate the governing law of their choice although there are some exceptions, for example, the Unfair Contract Terms Act 1977 contains requirements that apply to the contract regardless of any agreement to the contrary. If agreement has been reached in advance as to which country’s laws apply to the claim, the case will usually proceed on that basis.
If there is no choice of law clause in the contract:
In situations where no governing law has been chosen, various default provisions come into play.
At this point, the parties no longer have a choice over the law that is applicable to their dispute.
If the court that is determining the dispute is located outside England and Wales, the procedure will vary significantly. Thus, there is a real possibility of becoming embroiled in contentious litigation even before the proceedings have properly commenced because establishing the applicable law would need to be decided as a preliminary matter.
In such situations, it is even more important to agree a governing law clause, if at all possible.
Where can proceedings be commenced if a solicitor is instructed by a client who is based abroad?
If a solicitor is instructed by a client who is based abroad, or is instructed to take proceedings against a party based abroad, the question of jurisdiction must always be considered – in which country’s courts can proceedings be commenced? Because of Brexit, cases within the EU are no longer treated differently and jurisdiction will now be determined in the same way as for those which fall outside the EU rules. In England and Wales, this will mean considering the 2005 Hague Convention (where it applies) and the common law. Although not ideal, the current position does at least have the benefit of consistency.
2005 Hague convention:
The UK is now subject to the 2005 Hague Convention in its own right. The EU Member States are also party to the Hague Convention, along with a few other countries.
The Convention requires the court designated in an exclusive jurisdiction agreement (where a clause limits a dispute to the courts of one jurisdiction) to hear the case and for any proceedings in another contracting State to be dismissed. However, the impact of the Hague Convention is limited as it only covers situations where an exclusive jurisdiction clause exists.
Hague convention does not apply:
If the Hague Convention does not apply, the common law rules will come into play. In this instance, jurisdiction may be established by serving the defendant within the jurisdiction, thus in England and Wales.
However, the court may still decline jurisdiction in certain circumstances and, if the defendant is outside the jurisdiction, permission of the court must be obtained.
Even if a claimant does not have any real connection with this country, they may issue proceedings here and it is possible (albeit unlikely) that a claim could reach trial and be enforced without the claimant ever setting foot in England or Wales.
Service within England and Wales -
The courts of England and Wales can hear any proceedings if the claim form was served on the defendant while they were present in these countries (no matter how briefly). This is because service of court papers itself establishes the English courts’ jurisdiction over the defendant. The rationale behind this principle is that the mere presence of the defendant indicates their acceptance of the nation’s jurisdiction.
The defendant could, however, object to the proceedings continuing in England and Wales on the ground that the English courts are not the most appropriate for resolving the dispute.
Service outside England and Wales -
If proceedings are issued and a defendant cannot be served with the documents in England and Wales, the permission of the court must be obtained to serve them outside the jurisdiction. This may be granted in the following circumstances.
(a) The contract was made or breached in England or Wales, is governed by English law, or contains an agreement conferring jurisdiction on the English courts.
(b) In a tort claim, the act causing the damage was committed in England and Wales, or the loss was sustained here.
Although the rules in relation to jurisdiction are complex, they give reassurance to those who interact and trade internationally that the courts are willing and able to step in and provide a remedy to wrongs committed anywhere in the world.
Scotland and Northern Ireland -
A reference to ‘English law’ covers England and Wales but not Scotland or Northern Ireland, which have their own legal systems. Although many of the laws made by the UK Parliament at Westminster do apply or are very similar, this is not always the case. As above, whenever possible, the parties should agree which law is applicable and the jurisdiction to avoid incurring costs in establishing this and in enforcing any judgment.
Which court is the most appropriate for a certain type of case?
In some cases, the client will be able to select the court in which to start proceedings. However, the most important element in determining venue is likely to be the amount in dispute.
a) If the value of the claim is £100,000 or less, it must be started in the County Court.
b) If the value of the case exceeds £100,000, it may be commenced in the High Court. Note that different rules apply to proceedings that include a claim for damages in respect of personal injuries; these cannot be started in the High Court unless the value of the claim is £50,000 or more.
As a consequence, for claims in excess of £100,000 (or £50,000, as appropriate), the claimant has a choice of which court to use. To assist lawyers in determining the appropriate venue, further guidance is provided by the CPR.
These indicate that, in addition to the value of the claim, the High Court may also be used if there are other factors present, in particular:
a) the claim is complex either in relation to the facts, the legal issues, the remedy or the procedures; or
b) the outcome is important to the public in general.
Even if a claim is issued in the High Court, the judge may decide to transfer the matter to the County Court at a later date.
What kind of claims does the county court deal with?
The County Court generally deals with the more straightforward cases including claims for money only where the value of the claim is £100,000 or less (unless damages are sought for personal injuries).
These may consist of:
a) specified claims, namely those for a specific sum of money (debt claims); or
b) unspecified claims for damages, where the amount in dispute will need to be quantified
by the court.
There is a single national County Court, served by named County Court hearing centres across the country. There are also two County Court Business Centres, which issue most civil claims and retain those that are undefended. Because details of what should be included in the claim form are set out in Part 7 of the CPR, they are sometimes referred to as Part 7 claims.
Where and how to issue proceedings depends upon the type of claim:
a) All money- only claims made on paper, including both specified and unspecified claims, must be sent to the Civil National Business Centre in Northampton (this replaces the County Court Money Claims Centre (CCMCC) in Salford and the County Court Business Centre (CCBC) in Northampton). If a hearing is required, usually in contested cases, the matter will be transferred to the County Court hearing centre local to the defendant.
b) The Civil National Business Centre at Northampton deals with online claims for specified sums of money (debt claims) for amounts of up to £100,000. These are made via the website Money Claim Online (MCOL), which allows individuals, businesses and solicitors to issue proceedings, check the status of the claim, request judgment and enforce it over the internet.
This court also provides a service for bulk users, such as utility providers and credit card companies, that file large volumes of claims for money.
c) For all other County Court claims, the claimant can usually issue proceedings in any of the County Court hearing centres situated throughout England and Wales. In such circumstances most claimants will choose to start proceedings in the court closest to their home or business.
What kind of claims does the high court deal with?
The High Court is made up of three divisions:
(a) The King’s Bench Division, which has a workload consisting primarily of actions in contract and tort.
(b) The Chancery Division, which is used for disputes arising over land, trusts, contentious inheritance matters, partnership claims and company law.
(c) The Family Division, where family disputes such as defended divorces and adoption are resolved.
The Central Office of the High Court is located inside the Royal Courts of Justice in London, but a party may also issue their action in a number of regional District Registries such as in Birmingham and Leeds. Most claimants will choose to start proceedings in the court closest to their home or business.
Business and the property courts :
The Business and Property Courts is an umbrella term for a number of courts that decide specialist business and other civil disputes, both national and international. Amongst these are:
a) the Commercial Court, which deals with complex cases arising out of business disputes over contracts, insurance, banking and finance; and
b) the Technology and Construction Court, which handles claims about buildings, engineering and surveying.
Cases that are suitable for hearing in these courts would be outside the norm of most civil disputes and, as a consequence, the (different) procedure is not covered.
How are proceedings issued?
Proceedings commence when the claimant or their solicitor send a claim form and other relevant documents to the appropriate court to be ‘issued’; effectively, a file is opened.
The documents are:
a) a claim form (form N1);
b) particulars of claim (which may be drafted as part of the claim form or sent separately); and
c) documents that are required to be annexed by the CPR such as a copy of any contract.
Many claims are now dealt with online but, if not, sufficient copies for the defendant and any other parties should be sent, together with a covering letter indicating whether the court or the claimant is to serve proceedings and the court issue fee.
Once the claim form has been issued by the court, proceedings are formally started. Although this rarely arises in practice, a claim is ‘brought’ for limitation purposes (and so time stops running) when the claim form is received in the court office.
What is the claim form?
The claim form is the point of departure for the litigation and blank forms are accessible on the Ministry of Justice website. It summarises the most important aspects of the claim, both the substantive law that underpins the case and the facts in support. The content should be sufficiently detailed so that the court and the other parties understand the claimant’s case without being a full recitation of all the evidence in support. The key word is ‘summary’.
Who can make an application to add, substitute or remove a party from a claim form?
An existing party or a person who wants to become a party BUT no-one may be added or substituted as a claimant unless their consent in writing has been filed at court.
Is permission required to add, substitute or remove a party from a claim form?
Yes unless the claim form has not been served.
On what grounds can can party be added, substituted or removed from a claim form if the application was made within the limitation period?
It is desirable:
a) to add a new party to resolve matters in dispute; or
b) to remove a party; or
c) to substitute a party where the existing party’s interest or liability has passed to them.
On what grounds can can party be added, substituted or removed from a claim form if the application was made outside the limitation period?
A party may only be added or substituted if the limitation period was current when proceedings were started AND
a) the original party was named by mistake; or
b) the original party has died/is subject to a bankruptcy order and their interest or liability has passed to the new party; or
c) the claim cannot properly be carried on without the new party.
Although the law is clear, it is important to consider how this applies to the facts of each particular case.
How is a claim form served?
Once a claim form has been issued, it must be served on the other parties within four months. This means that it must be sent to or delivered to the defendant so they are aware of the existence of the proceedings. The rules governing service of documents are set out in CPR Part 6.
A claim form can only be served on a firm of solicitors if the defendant has nominated them in writing and this should not be presumed just because that firm has represented the defendant in pre- action negotiations. Once nominated, all court documents are served on the lawyers unless (exceptionally) the document must be served personally on the party, such as an injunction.
What are the permitted methods of service of a claim form?
This is also used to determine the relevant step for deemed service of the claim form.
(a) personal service;
(b) first class post or document exchange;
(c) leaving the claim form at a specified place;
(d) fax or other means of electronic communication; or
(e) any other method authorised by the court.
Personal service:
The arrangements for personal service will depend upon the status of the defendant.
a) A claim form is served personally on an individual by simply handing it to them. If they refuse to accept the document, it may be left with or near them.
b) If the defendant is a partnership, the form may be left either with a partner or with a person who has the control or management of the partnership at its principal place of business.
c) Personal service is effected on a company by leaving the documents with a person who holds a senior position such as a director, treasurer, secretary or chief executive.
First class post or document exchange:
Only first class post will satisfy the requirements of the CPR for service. Alternatively, where a document exchange (DX) number is provided on the letter heading, this may be used unless otherwise stated. DX is a system used by many solicitors and other professionals to transport documents between their offices, arriving the next business day.
Leaving the form at a specified place:
Here, the claim form is delivered by hand to the address specified by the CPR.
By fax or other electronic means:
Service by fax is waning in popularity as email and similar electronic methods become the normal means of communication. In both instances, the party to be served (or their solicitor) must have expressly confirmed they are willing to accept service in this manner.
i) An email address or fax number on the party’s headed paper is not enough to satisfy this requirement.
ii) In contrast, the inclusion of a fax number on the solicitor’s letterhead is sufficient indication they are willing to accept service by fax.
iii) The same does not apply for an email address, where the solicitor must specifically confirm this method may be used for service.
A party or their nominated solicitors may include in a statement of case a fax number, email address or electronic identification for the purpose of service of proceedings.
Service by an alternative method:
In addition to the specific ways listed in Part 6 above, the court can authorise other methods or places of service, such as sending a text message or leaving a voicemail on a particular telephone number.
The court may also sanction service by a contractually agreed method, or on the agent of an overseas principal. Furthermore, where the party to be served is a limited company, s 1139(1) of the Companies Act 2006 provides that documents may be left at or posted to the registered office of the company.
Where no solicitor is authorised to accept service and the defendant has not given an address for service, the default position of the most common defendants to serve the claim form?
a) Individual
Usual or last known residence.
b) Individual being sued in the name of a business (sole trader)
Usual or last known residence of the individual; or principal or last known place of business.
c) Individual being sued in the name of a partnership
Usual or last known residence of the individual; or principal or last known place of business of the partnership.
d) Limited liability partnership
Principal office of the partnership; or any place of business of the partnership within the jurisdiction that has a real connection with the claim.
e) Company registered in England and Wales
Principal office of the company; or any place of business of the company within the jurisdiction that has a real connection with the claim.
Once a claim form has been issued by the court, how long does the claimant have to serve it?
Once a claim form has been issued, the claimant has four calendar months in which to serve it on the defendant.
It would be unusual for the claimant to wait before serving the document because this imposes an unnecessary deadline upon the solicitor. However, if the limitation period is running out, the claimant may be forced to issue proceedings and, if difficulties arise in relation to tracing the defendant, this four month window gives a little more breathing space.
Whether or not the time limit is met depends upon the method of service used; so the period ends on the date:
a) personal service was effected or delivery was made at the relevant place; or
b) the letter was posted or left with the DX provider; or
c) the transmission of the fax was completed or the email was sent.
Once this has been done, the claimant has completed the ‘step required’ for service of the claim form.
When is there deemed service of a claim form?
The potential problem with any method of service, apart from personal service, is that the claimant cannot know precisely when the defendant receives the claim form and this information is essential in order to determine the next stage in the proceedings. To avoid disputes about whether and when documents are served, the CPR adopt the concept of deemed service. This means that a document will be taken to have arrived on a given day regardless of whether it actually did.
However, there are different rules for the claim form as opposed to all other court documents.
The claim form is deemed to have been served on the second business day after the step required has occurred. Establishing this requires two pieces of information.
a) A ‘business day’ is any day except Saturday, Sunday, a bank holiday, Good Friday or Christmas Day.
b) The ‘step required’ is, for example, putting the claim form in the post.
What is the deemed service of documents other than the claim form?
Personal service, delivering the document to a permitted address, fax and email
If served before 4.30pm on a business day, on that day. If not, on the next business day.
b) First class post or DX
The second day after it was posted provided that day is a business day. If not, on the next business day.
Key difference between deemed service of a claim form and deemed service of any other document:
A key difference is that service by first class post or DX is effected on the second day after the document was posted, in contrast with the claim form where it is the second business day.
This is illogical, not just because it is inconsistent, but because this may fall on a Sunday when there is no postal delivery service. In such cases, the practical effect is that service will ‘roll on’ to the next business day.
When should particulars of claim be served if not included in claim form?
In many cases, such as debt actions, the particulars of claim will be included on the claim form itself. However, for more complex cases, there is unlikely to be sufficient space to detail the legal elements and the facts in support. In such instances, the particulars of claim may be served separately:
a) either at the same time as the claim form; or
b) within 14 days after service of the claim form (but no later than four months after the date of issue of the claim form).
What are the deadlines for service if a claim for is to be served out of jurisdiction of England and Wales?
If a claim form is to be served outside the jurisdiction of England and Wales, the CPR allows extra time for this to occur; instead of four months, the document must be served on the other parties within six months of being issued.
Furthermore, there are special procedures in place which govern how service is effected. With regards to Scotland and Northern Ireland, permission is not required to serve proceedings in these countries but there are special provisions as to the methods of service of the claim form that are acceptable.
These are detailed in CPR Part 6.
In all other cases, including those involving EU Member States, the claimant must obtain permission to serve proceedings out of the jurisdiction. However, there is an exception: the Civil Procedure Rules have been amended to streamline the process so that where a contract contains an English jurisdiction clause, no permission will be needed to serve the claim in these circumstances.
The claim form must be accompanied by a notice setting out the grounds on which the claimant is entitled to serve it outside the jurisdiction together with evidence that England and Wales is the proper forum. Examples of the grounds that may be relied upon are that the breach of contract occurred in England and Wales or the excessive cost or delay of the case being heard in a foreign court. The application must be supported by evidence and is made without notice.
If an order permitting service outside the jurisdiction is made, the time limit for responding to the claim will be extended. Service is usually effected through the judicial authorities of the State in question or the British Consul.
How does the defendant need to respond to a claim?
Quite when the defendant needs to respond depends upon the approach taken by the claimant in drafting their claim.
If the claim form is marked ‘particulars of claim to follow’, the defendant must await service of these. This is logical as it is the particulars of claim that set out the detail of the case and, without this information, the defendant cannot properly draft their response.
Once the defendant has been served with both the claim form and the particulars of claim (whether separately or together), the defendant must react in some way.
To assist, at the same time, the defendant will receive Form N9 – the response pack – which explains how the defendant should respond and the time limits for doing so.
There are three options open to the defendant under the CPR, namely:
(a) to file an admission (Part 14);
(b) to file an acknowledgment of service (Part 10); or
(c) to file a defence (Part 15).
There is a fourth choice, which is to ignore the claim entirely, but this does not mean the litigation goes away as the claimant will be able to apply for judgment in default.
When is it best for a defendant to make an admission?
If a defendant is aware they owe the money, provided they have the means to pay, it is likely to be in their interests to admit the claim as this will bring the matter to an early conclusion and limit their liability for costs.
A defendant who wishes to admit either the whole or part of the claim should complete the appropriate sections of the response pack.
There are two types of admission forms – one for specified (debt) claims and the other for unspecified claims (where damages are sought) and the defendant should ensure they select the correct form.
What is the procedure if a defendant makes an admission of an entire specified claim?
If a defendant admits the whole claim for a specified amount, they must provide details of their income and expenditure and make an offer of payment, either in full or by way of instalments.
Upon receipt of the form, the claimant may then file a request for judgment. If the claimant rejects the defendant’s payment terms, the judge will decide the appropriate rate of payment, usually in the absence of a court hearing.
What is the procedure if a defendant makes an admission of a part of a specified claim?
Alternatively, the defendant may admit only part of a claim for a specified amount. In this instance, the claimant has 14 days in which to consider any offers made and to decide on their next course of action as follows:
(a) to accept the part admission in full satisfaction of the claim and request that judgment be entered by the court for that amount;
(b) to accept the part admission but not the defendant’s proposals for payment in which case the court will decide on their suitability; or
(c) to reject the offer entirely and proceed with their claim as a defended action.
This decision is likely to be based, primarily, on the defendant’s ability to pay.
Alternatively, the defendant may admit only part of a claim for a specified amount. In this instance, the claimant has 14 days in which to consider any offers made and to decide on their next course of action as follows:
(a) to accept the part admission in full satisfaction of the claim and request that judgment be entered by the court for that amount;
(b) to accept the part admission but not the defendant’s proposals for payment in which case the court will decide on their suitability; or
(c) to reject the offer entirely and proceed with their claim as a defended action.
This decision is likely to be based, primarily, on the defendant’s ability to pay.
Where the defendant admits liability for a claim for an unspecified amount and offers a sum of money, the court will serve a notice on the claimant asking whether or not they accept the figure in satisfaction of the claim.
If the offer is accepted, the claimant may enter judgment for the amount offered and, if the defendant has asked for time to pay, the following procedure applies:
The defendant must provide details of their income and expenditure and make an offer of payment, either in full or by way of instalments. Upon receipt of the form, the claimant may then file a request for judgment. If the claimant rejects the defendant’s payment terms, the judge will decide the appropriate rate of payment, usually in the absence of a court hearing.
However, if either the claimant does not accept the offer or the defendant makes no offer, the claimant will enter judgment for damages to be assessed at a disposal hearing.
What is an acknowledgement of service and what is the effect of serving it?
In many cases, the defendant may be sure they want to defend the claim but are not yet in a position to draft a full defence, perhaps because they are still gathering evidence. Filing the acknowledgment of service form buys the defendant time to enable them to do this. The effect is that, instead of having 14 days from service of the particulars of claim to file their defence, they now have 28 days.
When should a defence be filed?
The third viable option for the defendant is to respond to the proceedings by filing a full defence. As stated above, this may either be within the initial 14 day limit from service of the particulars of claim or within 28 days if an acknowledgement of service is filed.
The response pack contains forms that the defendant can use and most litigants in person (parties who are not represented by a lawyer) will take advantage of these.
Alternatively, a separate document may be prepared and this is the approach a solicitor would generally take. The reason is that a well drafted defence would set out more factual detail than could be included on the form.
Once the defence has been filed, a copy must be served on all other parties. The court will be responsible for this unless the defendant’s solicitor has indicated otherwise.
What can the defendant include in their defence?
As part of the defendant’s response, they may wish to pursue their own claim against the claimant and this is known as a counterclaim.
Can the deadline for filing the defence be extended?
On occasion, the defendant may not be able to meet the deadline for filing the defence and so, with agreement from the other parties, this can be extended by a maximum of 28 days. The effect is that the defendant has a total of 56 days from the date of service of the particulars of claim. Any further extension would need the court’s permission.
What is the mechanism in the CPR that prevents a defendant from evading liability by doing nothing?
Once proceedings have been served upon the defendant, it is common for them to take no action at all. To ensure such defendants cannot evade liability for monies owed by simply doing nothing, the CPR include a mechanism whereby the claimant can force the issue and this is known as a judgment in default (of the defence) or a default judgment – the terms are interchangeable. This means that the claimant obtains a judgment without there being any consideration of the facts involved.
What is the procedure for a judgment in default?
The claimant will make an application under CPR Part 12 and this will require them to complete a request for default judgment. To succeed, they must satisfy the court that:
a) the particulars of claim have been served upon the defendant; and
b) the defendant has not filed an acknowledgement of service form or a defence within the
relevant time period.
When may a claimant not obtain judgment in default?
There are limited circumstances where a claimant may not obtain a default judgment, specifically if there is a pending application by the defendant for summary judgment or to have the claimant’s statement of case struck out.
How is the application for a default judgment dealt with?
The application for a default judgment is dealt with in different ways depending upon whether it is a debt claim or not.
When applying for judgment in default for a specified sum, the claimant must:
a) indicate the date payment was due;
b) calculate an up- to- date total for the interest claimed; and
c) state a daily rate at which interest accrues.
This will enable the court to enter judgment for the correct figure on any given day. Once final judgment has been entered, the payment will usually be required within 14 days.
However, if the claim is for an unspecified sum, the court will grant the claimant’s request for default judgment but the case will need to come back before the court to decide the amount of damages payable (a disposal hearing).
How are default judgments set aside?
Having initially ignored the proceedings, if the claimant enters default judgment, the defendant will have no choice but to face them.
If the defendant accepts that the monies are owed, it is best for them to pay the judgment, if at all possible, to avoid increased costs and interest.
If not, the way forward is for the defendant to apply for the judgment to be set aside. There are two grounds under CPR Part 13 upon which the defendant may rely in their application.
Mandatory grounds:
The court is obliged to set aside a default judgment if it was wrongly entered. This would occur where judgment has been entered too early, before the time for filing an acknowledgment of service or a defence (whichever is applicable) expired; or because the claim has already been paid in full.
Discretionary grounds:
The court also has the power to set aside a default judgment in circumstances where the defendant:
a) has a real prospect of successfully defending the claim; or
b) there is some other good reason why the defendant should be allowed to defend the claim.
The first of these grounds is clearly linked to the merits of the defence and indeed, there is little point in the defendant being allowed to re- open proceedings in a case where their prospects of success are limited.
With regard to the second ground, good reasons that may satisfy the test could be that the defendant was ill or away on holiday so they could not respond within the time constraints. Excuses such as pressure of work or the documents being misplaced would not be sufficient.
In addition, the court will also take account of the promptness of the defendant’s application to set aside. It is therefore essential that the defendant issues their application as soon as they become aware of the default judgment, to comply with the overriding objective of ensuring that cases are dealt with expeditiously and fairly.
What procedural requirements are there for setting aside a default judgment?
The application is made by filing an application notice (form N244), which is usually supported by a witness statement outlining the defendant’s submissions.
What orders can an applicant make with regards to an application to set aside default judgment?
(a) the defendant succeeds and the judgment is set aside, allowing them to continue to defend the action;
(b) the claimant wins and the judgment remains in place, so they may proceed to enforcement; or
(c) a conditional order is made, namely, the judgment is set aside on condition the defendant pays monies into court, for example, the amount of the claim. This is the least likely outcome and is used in situations where the court is concerned the defence is being pursued as a delaying tactic where the defendant does not have the money to pay.
What costs order will the court likely make on an application to set aside a default judgment?
Dealing specifically with an application to set aside a default judgment, the costs order made at the conclusion of the hearing will depend upon the outcome as follows:
a) If the application is granted on a mandatory ground, the claimant will have been at fault for entering judgment when they should not have done and, therefore, the claimant is liable to pay the defendant’s costs.
b) Where the defendant establishes the discretionary ground of a good reason for the default, as neither side is at fault, costs are usually in the case.
c) Where the defendant only establishes the discretionary ground of a defence with a real prospect of success at trial, the defendant is at fault in failing (initially) to deal with the proceedings. As a consequence, they normally have to pay the claimant’s costs.
e) If the application fails, the defendant will pay the claimant’s costs of the application.
What is discontinuance?
A claimant may decide not to pursue their claim, even though no settlement has been reached. This may be for a variety of reasons but will usually be because, after further consideration of the evidence, they conclude their prospects of succeeding at trial or of recovering any money from the defendant are so slim that it would be better to cut their losses and discontinue.
Can a claimant discontinue all or part of a claim?
Yes, at any time during the proceedings.
Is permission required to discontinue a claim?
Not usually, but permission must be obtained in certain circumstances such as if the court has granted an interim injunction.
If there is more than one claimant, can a claimant discontinue a claim?
A claimant may not discontinue unless every other party consents in writing or the court gives permission.
If there is more than one defendant can a claimant discontinue a claim?
The claimant may discontinue the claim against all or any of the defendants.
What is the procedure for discontinuing a claim?
The claimant must file and serve a notice of discontinuance on the parties to the proceedings. If consent is required, a copy of this must be attached to the notice.
What is the effect of discontinuing a claim?
The proceedings are brought to an end against the defendant on the date the notice of discontinuance is served upon them. The claimant will be liable for the costs of the proceedings unless the court orders otherwise and it is vital that the solicitor explains this to the client.
Because of the costs implications of discontinuance, a claimant should not issue proceedings lightly and should consider carefully their prospects of success before doing so.
What is a pre-action settlement?
Where a settlement is reached prior to the issue of proceedings, the prospective claimant will not be entitled to recover their legal costs unless this has been agreed.
Once settlement terms have been agreed, they must be clearly and accurately recorded in writing, so that the agreement can be enforced if one of the parties defaults. It may be sufficient for the terms to be recorded in an exchange of correspondence, but more complicated settlements should normally be recorded in a formal settlement agreement.
What formalities should be undertaken if a settlement has been reached after the issue of proceedings?
If a settlement is concluded after proceedings have started, it is preferable for this to be recorded in a court order or judgment.
This is so that enforcement proceedings may be commenced to recover any monies due under the settlement (including costs) should the agreement not be honoured.
What is a consent order and when are they used?
Where none of the parties is a litigant in person, it will often be possible to avoid an application to the court by drawing up a consent order or judgment for sealing by a court officer. Although in theory the court retains the power not to approve the proposed order, in practice, it will only be referred to a judge if it appears to be incorrect or unclear.
The formalities for a consent order are as follows:
(a) the order agreed by the parties must be drawn up in the terms agreed;
(b) it must be expressed as being ‘By Consent’; and
(c) signed by the legal representative acting for each of the parties to whom the order relates.
Where none of the parties is a litigant in person, it will often be possible to avoid an application to the court by drawing up a consent order or judgment for sealing by a court officer. Although in theory the court retains the power not to approve the proposed order, in practice, it will only be referred to a judge if it appears to be incorrect or unclear.
The formalities for a consent order are as follows:
(a) the order agreed by the parties must be drawn up in the terms agreed;
(b) it must be expressed as being ‘By Consent’; and
(c) signed by the legal representative acting for each of the parties to whom the order relates.
What is a Tomlin order?
A Tomlin order stays the claim on agreed terms that are set out either in a schedule to the order or separately. The key to an effective Tomlin order is to appreciate that certain terms must appear in the order itself, while others can be put in the schedule or a separate document that is normally held by the parties’ solicitors.
What terms must appear in a Tomlin order?
‘By consent’
This term records the fact of there being agreement.
b) Stay of proceedings
Confirms the proceedings are ‘paused’.
c) Liberty to apply
This provision allows any party to apply to the court for the stay to be lifted and the court can be asked to enforce the settlement if a party does not perform its part of the agreement. The important effect is that new court proceedings do not have to be commenced to enforce the terms.
d) Payment of costs or detailed assessment of costs
Where one party is to pay another’s costs and/ or the parties want the amount of those costs to be assessed (checked and calculated) by the court, that direction must go in the order itself.
e) Signed by the parties’ solicitors
A formal requirement signifying consent to the agreement.
What terms can be put in the schedule or a separate document of a Tomlin order?
Terms that the parties wish to keep confidential or that the court does not have the power to order must be set out in a schedule to the Tomlin order or in a separate document.
Often this will be for the payment of a sum of money so that other businesses or customers cannot see how much the matter was settled for.
Any other agreed terms should also be recorded, for example that in future dealings one party is to give the other a discount.
How can a court’s jurisdiction be disputed?
If a defendant wishes to dispute the jurisdiction of the court, this must be stated on the acknowledgement of service. The defendant then has 14 days after filing the acknowledgment of service form to make a challenge, failing which they will be treated as having submitted to the jurisdiction. The application to the court to dispute the court’s jurisdiction must be supported by evidence as to why England and Wales is not the proper forum for the case.
a) If the court grants the application and finds that the claim should not have been brought in England and Wales, service of the claim form will usually be set aside. As a consequence the proceedings come to an end.
b) If the court refuses the defendant’s application, the original acknowledgement of service ceases to have effect and the defendant must file a further acknowledgement within 14 days. The proceedings will then continue in the usual way.
What are statements of case?
Statements of case are the formal documents in which the parties concisely set out their respective cases.
They are served between the parties and filed at court.
The statements of case are central to the litigation as they ensure that each party knows their opponent’s case at an early stage, providing them with the opportunity to assess how strong it is, to determine what evidence is needed to counter it and to consider whether to make an offer to settle and on what terms.
At trial, the court will only decide those issues that are raised in the statements of case and so they must be drafted carefully and reviewed continually as the matter develops.
Statements of case are invariably the first documents that are served between the parties and are served in sequence.
- Claim form
- Particulars of claim
- Defence
Usually, these will be the only statements of case in civil proceedings. However, on occasion, they will not be sufficient and the CPR provide for additional documents that may also prove useful.
- Reply
- Counterclaim
- Defence to the counterclaim
- Request for further information
- Response to the request for further information
Part 16 of the CPR sets out the requirements and the formalities of statements of case.
However, precedents are another useful starting point when drafting these documents, although they must always be tailored to the particular matter that is the subject of the litigation.
When drafting, it is important to remember that, although the documents themselves are formal, the style adopted should be clear using plain English where possible.
Where a solicitor prepares a party’s statements of case, it should be signed in the name of the firm.
What are the ethical considerations of statements of case?
A solicitor must not mislead the court so should only include assertions in the statements of case that are properly arguable. For example, a solicitor should not include a client’s allegation that the opponent has acted fraudulently unless there is some evidential basis for this.
What if a client has filed a statement of case and subsequently tells their solicitor before the litigation ends that it contains a material error, the effect of which is to mislead the court?
In those circumstances, the solicitor should advise the client to amend the statement of case and, if the client refuses to do so, should cease to act.
In order to keep client confidentiality, the solicitor should not inform the court or any other party of the reasons why they are no longer representing their client.
What must a particulars of claim include?
Specifically, the document must include:
a) A concise statement of the facts on which the claimant relies. This means that it must outline all the facts giving rise to the dispute, to demonstrate the required elements of the cause of action on which the claim is based.
b) If the claimant is seeking interest, a statement to that effect and the details. However, the precise contents of the particulars of claim will depend upon the relevant cause of action, for example, whether the claim is for breach of contract or negligence.
In a claim based on breach of contract, what needs to be included in the particulars of claim?
Where the claimant alleges breach of contract, the particulars of claim should deal with the essential material facts that will establish the cause of action.
(a) The status of the parties: this is the starting point and, apart from providing background information, these details are required in certain situations.
For example, the parties should confirm the defendant’s business when relying on sale during the course of that business to establish terms implied by the Sale of Goods Act 1979 or the Supply of Goods and Services Act 1982.
Next, the claimant will set out the chronological events explaining what has occurred.
This may include pre- contractual matters if they assist in establishing the claim, such as
the request for a sample or relevant pre- contract statements.
Thereafter, the particulars of claim will move into the substance of the matter. However, whilst it may appear that the claimant is simply ‘telling their story’, behind this are the legal elements that underpin their case.
(b) Existence of contract: this must be established (although rarely disputed in practice) and will consist of the date, type (written or oral), parties, subject matter and consideration.
Where a claim is based upon a written contract, a copy of the contractual documents must be attached to or served with the particulars of claim. If the claim is based on an oral agreement, the contractual words used, by whom, to whom, and when and where they were spoken should be specified.
(c) Terms: details of any express terms are included and these will usually be found in the contract itself. Likewise, any implied terms relied upon should be stated specifically.
At this point, the particulars of claim may appear to revert back to a mere description of the facts, perhaps the date that the goods were delivered or the payment of the first instalment. However, in addition to telling the chronological story, this paragraph sets out what parts of the contract have been performed. This is important in limiting the areas of dispute the court will need to consider.
(d) Breach alleged and particularised: this section contains details of which terms were breached and specifically how. Examples would be a failure to pay for the goods, late delivery or the poor quality of the items supplied. Initially, the breach is alleged generally.
(g) Interest: where the remedy sought by the claimant is either damages or the repayment of a debt, the court may award interest on the sum outstanding, but only if claimed.
In breach of contract cases, there are three alternative ways of claiming interest as follows:
- The contract itself may specify a rate of interest payable on any outstanding sum.
- If there is no provision in the contract for interest, interest may be claimed under the Late Payment of Commercial Debts (Interest) Act 1998, which gives a statutory right to interest on commercial debts that are paid late. As the Act is only concerned with commercial debts, it does not apply to unspecified (damages) claims or to a specified amount (a debt) owed by a consumer. The relevant rate of interest is 8% per annum above the Bank of England’s base rate on the date the debt became due for payment. The claimant is also entitled to a small, prescribed amount of statutory compensation for the inconvenience of having to recover the debt.
In all other cases, the court has a discretion to award interest either under s 35A of the Senior Courts Act 1981 (SCA 1981) in respect of High Court cases, or under s 69 of the County Courts Act 1984 (CCA 1984) for County Court cases. For specified claims, the interest must be precisely calculated as a lump sum for the amount that has accrued from breach of contract up to the date of issue of the proceedings, plus a daily rate so it is easy to provide an updated total.
(h) Summary of relief: traditionally, although not a requirement of the CPR, the remedies claimed are summarised towards the end of the particulars of claim.
(i) Statement of truth: the claim form or particulars of claim must contain a signed statement of truth that its contents are believed to be true (Part 22) as set out in Chapter 3 of the DR book.
In a claim based on breach of negligence, what needs to be included in the particulars of claim?
Particulars of claim relating to an action in the tort of negligence will be approached in a similar way, although the content will differ to reflect the legal elements of duty of care, breach of that duty, causation and loss.
The court has a general discretion (which is usually exercised) to award interest on damagesin any negligence claim in accordance with s 35A SCA 1981 in respect of High Court claims, and s 69 CCA 1984 for County Court matters. In practice, interest is normally awarded from when the loss was sustained.
What is the purpose of a defence?
The defence sets out the defendant’s answer to the claim with the aim being to highlight what issues are in dispute. Rule 16.5 assists in the approach that should be adopted when drafting this document. The defence must state, for each allegation, whether it is:
a) denied;
b) not admitted; or
c) admitted.
Where a defendant denies an allegation, they must state:
- their reasons for doing so; and
their own version of events if different from that given by the claimant.
A non- admission is made where the defendant has no knowledge of the particular matter alleged.
If the defendant admits the statement does the claimant need to prove the allegation?
No
If the defendant makes a non-admission does the claimant need to prove the allegation?
Yes
If the defendant denies a statement does they claimant need to prove the allegation?
Yes
The purpose of the defence is to narrow down the issues between the parties so that only the matters in dispute are tested in court. In the example above, the central issue to determine is who was at fault in causing the collision.
It is vital not to miss an allegation because the effect is that it is deemed to be accepted.
Accordingly, best practice dictates that a systematic approach is adopted to ensure every allegation in the particulars of claim is dealt with and nothing is admitted through omission. This will mirror, as far as possible, the sequence of events in the particulars of claim, with the defence usually answering each paragraph in turn. If more than one allegation is included in the paragraph, these should be dealt with on a point by point basis.
What is are the contents of a defence?
When drafting the defence, the defendant must comply with the formalities required by the CPR and must include:
* the name of the court;
* the claim number (the unique reference number that is allocated by the court on issue of proceedings);
* the parties;
* the title (DEFENCE);
* the date and signature of solicitors in the name of the firm;
* the statement of truth; and
* details of who is to be served and where.
If the defendant alleges that the relevant limitation period for the claim has expired, the details of this must be given in the defence, for example, when it began and expired, and whether it ran under the terms of a contract or under the Limitation Act 1980. The burden of proof is then normally transferred to the claimant to show the claim is not time- barred.
There are some instances where the burden of proof falls upon the defendant, specifically in relation to:
(a) contributory negligence; and
(b) a failure by the claimant to mitigate its loss.
Where these matters are alleged, they should be made and detailed in the defence.
What is counterclaim?
A counterclaim arises where the defendant is alleging they have their own cause of action against the claimant. Effectively, they could have taken action against the claimant first and issued proceedings.
This may also be referred to as a set off.
In summary, a counterclaim will be relevant if the defendant has actually suffered loss that is attributable to the claimant. If the defendant simply has a good reason for not paying the monies owed, but has not incurred any loss, they should only file a defence.
How are a defence and counterclaim structured?
A defence and counterclaim is essentially what the title suggests: a defence and a (new) claim, set out in a single document. The title to the action remains the same but the heading will now be ‘DEFENCE AND COUNTERCLAIM’. The document is then sub- divided into two sections, with the defence outlined at the beginning and the counterclaim following on immediately thereafter.
In terms of the content, the best approach to drafting a counterclaim is to treat it as a stand- alone claim, for example, for breach of the Sale of Goods Act 1979 on the basis the goods were not of satisfactory quality. However, rather than repeat aspects that have already been included in the statements of case, such as details of the contract and the incorporation of the implied terms, the counterclaim will refer back to the defence. The first paragraph will simply state that the relevant paragraphs are repeated. The effect of this is that, for example, the existence and terms of the contract are accepted and the defendant’s allegation of breach is also confirmed. The rest of the counterclaim will then set out the allegations of loss resulting from the claimants’ breach.
In summary:
* A counterclaim is treated as if it were a claim and should be filed with the defence.
* It will form one document, with the counterclaim following on from the defence.
Permission is not required from the court unless the defence has already been filed.
What additional claims aside from a counterclaim may be launched?
Part 20 also applies to additional claims made by a defendant for a contribution or indemnity or some other remedy against any person whether or not they are already a party. These are referred to as additional claims.
A common scenario is where the defendant wishes to pass the blame, either in whole or in part, onto a third party. The defendant may be seeking a full indemnity from the third party, or a contribution towards any damages they have to pay the claimant.
What is an indemnity?
A claim for an indemnity may arise where there is a contractual relationship between the defendant and the third party, in which the latter is obliged by the terms of a contract to indemnify the defendant if they are found liable for the claim. This may also arise by way of statute.
What is contribution?
A claim for a contribution can be made where there are joint wrong- doers and the defendant argues that the third party is partly responsible for the harm the claimant has suffered.
When can additional claims be made?
The defendant may also make other additional claims without the court’s permission provided this is done either before or at the same time as they file the defence.
What is a reply to a defence?
A claimant may wish to file a reply to the defence but is under no obligation to do so. Replies tend to be used if the claimant wants to respond to matters that have been raised in the defence but which are not covered in the particulars of claim.
What is a defence to a counterclaim?
If the claimant decides to dispute the counterclaim, they must file a defence to the counterclaim within 14 days (unless an extension of up to 28 days has been agreed with the defendant). If they fail to do so, the defendant may enter judgment in default on the counterclaim.
Can amendments be made to statements of case prior to the expiry of a limitation period?
If the statement of case and has been filed but not served, it can be amended at any time.
If the statement of case has been filed and served, the statement of case can only be amended with the written consent of all parties or the permission of the court.
What is the procedure for applying for permission?
When applying for permission, the applicant should file a copy of the statement of case with the proposed amendments together with an application notice.
The court will then decide whether or not to exercise its discretion to grant the application, taking into account the overriding objective of dealing with the case justly and at proportionate cost.
In particular, the court will need to strike a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if it is permitted.
Can amendments be made to statements of case after the expiry of a limitation period?
Where the limitation period has ended, the court may allow an amendment only in the following three circumstances:
a) to add or substitute a new claim, if this arises out of the same or substantially the same facts as an existing claim;
b) to correct a (genuine) mistake as to the name of a party;
c) to alter the capacity in which a party claims.
What is a request for further information?
There will be occasions where the statement of case is somewhat confusing or fails to set out the case precisely enough. At this point, CPR Part 18 comes into play. The rule provides that, at any time, either the court or the parties may request further information and, if successful, a party will be ordered to:
(a) clarify any matter that is in dispute; or
(b) give additional information in relation to any such matter.
What is the procedure for making a request of further information?
The procedure for making or responding to Part 18 requests is as follows:
* If either party requires further information, they must (first) serve a written request on the other party, allowing a reasonable time for the response.
A request should be concise and strictly confined to matters that are reasonably necessary and proportionate to enable the applicant to prepare their own case or to understand the case they have to answer.
* Requests must be made as far as possible in a single comprehensive document and not piecemeal. If brief, this may be by letter; if not, the request should be made in a separate document, which must be sent to the other party.
* Any request must be headed with the name of the court, the title and number of the claim and identify that it is a Part 18 request. The requests should be set out in separate numbered paragraphs, and state the date for a response.
Once the request has been received, the other party must deal with the issues raised.
* The response must be in writing, dated and signed by the party or their solicitor. It should set out the same information as the request and then give details of the response.
* The response must be:
∘ served on all the parties;
∘ filed with the court; and
∘ verified by a statement of truth.
If a request for further information is not responded to, or cannot be complied with, an application may be made to court under Part 18. The court will grant an order if it is satisfied that the request is confined to matters that are reasonably necessary and proportionate to enable the applicant to prepare their case or to understand the case against them.
What are interim applications?
If the parties are unable to resolve their differences by negotiation, they will have little alternative but to issue proceedings.
However, cases do not always proceed seamlessly to trial and, in many cases, one or other of the parties will need to bring a particular matter before the court along the way.
Applications that are made after litigation starts but before the trial are known as interim applications and they are many and varied.
Interim applications are the general term for applications such as summary judgment etc.
What is the procedure for applying for an interim application?
Before applying to the court, the parties should seek to resolve matters between themselves so as to comply with the overriding objective and to avoid the imposition of costs penalties.
This will usually be achieved by the exchange of correspondence, whether by letter or email, and only if that fails should an application be made.
Under Part 23, the party who is applying (the applicant) must complete an application notice and Form N244 should be used. The party against whom the order is sought is known as the respondent.
To which court is an application notice made?
The application must be made to the court where the claim started or (if relevant) to where it has been transferred.
What is the content of an application notice?
An application notice must state what order is being sought and why.
Although there is no specific requirement to provide evidence, as a matter of practical reality, it will be necessary to set out the facts the party is relying on in support of, or for opposing, the application.
If the issues raised are straightforward, the applicant will complete the box to be found on the second page of Form N244.
However, if there is insufficient space on the form, a witness statement may be filed at the same time.
Furthermore, the party may also rely on the contents of a statement of case, such as the particulars of claim. The application must be verified by a statement of truth.
Evidence in support:
The witness statement should be made by the person best able to address the relevant points from personal knowledge. If the application is a more technical one, such as for the amendment of a statement of case, this is likely to be the solicitor; whereas in other situations, it may be the client.
The statement should:
(a) include the factual information and the evidence in support of the application; and
(b) anticipate the opponent’s case, where appropriate.
Sufficient detail must be provided to persuade the court to make the order, as there will be no oral evidence from witnesses at the hearing. Although the solicitor will make submissions, the judge will decide the issue primarily on the basis of the written evidence. Hence, it is important that the witness statement covers all the required points including, if necessary, attaching relevant documents as exhibits.
Draft order:
Practice Direction 23A states that, except in the most simple of applications, the applicant should attach a draft of the order sought to assist the judge.
When should an application notice for an interim application be served on the opponent?
The application notice must be served on the opponent at least three clear days before the court hearing to allow the other party to respond and to object to the application should they wish to do so. Clear days means that the date of service and of the hearing are excluded, as well as weekends and bank holidays.
How can an consent order be used in an interim application?
If the parties have reached agreement on the order they require, they can apply to the court for an order to be made by consent without the need for attendance at the hearing. The parties must ensure they provide the court with any material it needs to be satisfied that it is appropriate to make the order, and usually a letter will suffice. The main advantage of this is the saving of costs for all concerned.
When can orders be made without notice?
The general rule is that applications must be made on notice to the other party. This ensures that the opponent is aware of the application so they may file evidence in response and arrange for attendance at the hearing.
However, there are exceptions to this rule, usually where:
* there is exceptional urgency; or
* the overriding objective of the CPR would be best achieved by making an order without notice.
The most common examples are where the applicant is applying to freeze their opponent’s financial assets or to search their premises.
Clearly, in these instances, giving warning of the intended action would defeat the purpose of the application as it would allow time for assets to be moved or destroyed.
Where an application is made without notice to the respondent, the evidence must explain why notice was not given.
In addition, the applicant has a duty of full and frank disclosure, which means they cannot take advantage of the respondent’s absence at the hearing and must draw the court’s attention to evidence and arguments they reasonably anticipate the respondent would wish to make.
If an order is made on an application without notice, the following copy documents must be served on the respondent, as soon as it is practicable to do so:
(a) the court order;
(b) the application notice; and
(c) any supporting evidence.
The respondent may then apply to set aside or vary the order within seven days of service of the order upon them.
How are interim application hearings conducted?
Many courts now have the facilities to conduct hearings by telephone or video conferencing. This is actively encouraged and, under PD 23A, the general rule is that interim applications with a time estimate of one hour or less will be conducted by telephone if at all possible. However, there are exceptions such as the hearing of an application made without notice to the other party.
What is an interim costs order?
Any interim application will involve the parties in expense, for example, in collecting evidence, preparing the notice of application and supporting witness statement, and attending the hearing. A court fee is also payable.
At the end of any interim application, the judge will decide the issue of costs – often referred to as ‘pay as you go’ litigation. The general costs rule applies with the loser paying the winner’s costs.
Thus, if the application is granted, it is normal to order the respondent to pay the applicant’s costs.
However, the type of costs order will depend upon the nature of the application and interim costs orders usually reflect, to a large extent, the conduct of the parties.
For example, a party who wants permission to amend their statement of case starts from a weak position as the document should perhaps have been properly drafted in the first place; hence, they may have to pay the costs of the application even if they win.
What different types of cost order are there?
[Named party’s] costs
The party named in the order is entitled to their costs of the interim application whatever other costs orders are made in the proceedings. These costs are normally summarily (instantly) assessed and ordered to be paid within 14 days.
An example would be an order for ‘claimant’s costs’. This would mean that the defendant must pay the claimant’s costs.
This applies when there is a clear ‘winner’ such as where the claimant succeeds in their application for summary judgment. The unsuccessful party would be ordered to pay the costs.
b) Costs in the case
In an order for costs in the case, no party is named and, at this stage, neither party can recover their costs. It only becomes apparent who is to pay the costs of the interim application at the conclusion of the proceedings. The ultimate loser of the litigation will also be liable for these costs.
This could apply if the court makes a conditional order, for example, that the defendant may continue to defend the proceedings but only if they file a full defence within 14 days. If they fail to do so, only then would the claimant receive the costs of the interim application.
c) No order as to costs
Each party is to bear their own costs of the interim application whatever costs orders are made at the end of the proceedings.
This order is often made when the outcome of the interim application is effectively a draw with neither party being perceived to be at fault. An example may be where evidence later comes to light that requires additional witness statements to be filed.
What is a summary judgment?
Once a claim has been served, the defendant may:
(a) do nothing – in which case the claimant will apply for default judgment;
(b) admit the claim, allowing the claim to be enforced; or
(c) file a full defence so the case proceeds to trial.
However, there is a fourth option. Sometimes the defendant will simply file a weak defence, either because their case has no substance or as a delaying tactic to buy more time. This may be because they are looking for additional evidence, or simply that they do not have the available financial assets to pay the claim.
If the defence received is poor, the claimant would almost certainly succeed at trial but this would cost them additional time and money.
To enable a claimant to bring the matter to an early conclusion, Part 24 of the CPR provides a solution. This is known as summary judgment.
Who can bring a summary judgment?
Although such applications are normally brought by the claimant, the defendant may also apply for summary judgment. This may occur if, for example, a litigant in person has filed a weak particulars of claim or one which has no legal basis.
What is the test for summary judgment?
Rule 24.3 states that the court may give summary judgment against a claimant or defendant on the whole of a claim or an issue if:
(a) it considers that the party has no real prospect of succeeding on the claim, defence or issue; or
(b) there is no other compelling reason why the case or issue should be disposed of at trial.
There are some cases which are clearly not suitable for summary judgment, for example, where there are complex issues that need proper investigation at trial or difficult questions of law.
However, Part 24 is a useful mechanism that should be considered by the parties wherever appropriate, particularly as it is consistent with the overriding objective of the CPR to deal with matter justly and at proportionate cost.
A claimant applicant has to prove both that the defendant has no real prospect of successfully defending the claim and that there is no other compelling reason why the matter should proceed to trial; but a defendant respondent need only succeed in preventing the claimant from proving one aspect to ensure the dismissal of the application for summary judgment.
What is meant by no real prospect?
In determining whether the claimant has a real prospect of succeeding in their claim or the defendant of defending theirs, the court will consider the evidence and this will vary from case to case. With the increase in litigants in person, there is a risk that claims are pursued or defended with limited understanding of the legal merits of a particular issue or the requirements of evidence.
In these situations, the responsibility will fall upon the court to weed out the somewhat hopeless cases.
What is meant by compelling reason?
In addition to the prospect of success being determined, the judge must also be satisfied that there are compelling reasons to allow the matter to proceed to trial.
Although this covers a range of situations, the most common reasons would be:
* The need to allow more time for the matter to be investigated, perhaps due to difficulties in contacting an important witness.
* The claim or defence is of a highly complicated and/ or technical nature so it can only be properly understood with all the evidence that would be available at a full trial.
* The need to hear from witnesses, particularly if one of the central issues (such as the terms of a contract) is disputed oral evidence.
It is important to bear in mind that the hearing is not the trial. The submissions should be based upon the criteria of Part 24 so the respondent should concentrate on establishing a compelling reason to allow the proceedings to continue and not attempt to argue their case in its entirety.
Obtaining an order for summary judgment is not a given and indeed, the easier option may be for the judge to allow the proceedings to continue.
What is the procedure for applying for summary judgement?
An application for summary judgment can be made by either party at any time. The only occasion where the court’s permission is required is where the claimant wishes to apply before the defendant has filed an acknowledgement of service or a defence. However, given the requirement to convince the judge that the defendant has no real prospect of defending the claim, a claimant will invariably wait until after the defence has been filed.
The procedure is as follows:
* The applicant applies with Form N244 and (usually) a witness statement in support.
* The respondent must:
∘ be given at least 14 days’ notice of the hearing date; and
∘ file and serve any written evidence at least seven days before the hearing.
If the applicant wishes to rely on further evidence, this must be filed and served at least three days before the hearing.
What orders may the judge make following a hearing for summary judgment?
The judge has a number of possible orders at their disposal.
(a) Judgment on the claim: this means that the claimant has succeeded in their application for summary judgment and the matter will proceed to enforcement.
(b) The striking out or dismissal of the claim: here, the defendant has succeeded in their application to dispose of the claimant’s claim and the case comes to an end.
(c) The application is dismissed: the applicant has failed to bring the case to an early conclusion and it will now proceed towards trial.
(d) A conditional order: the application has not been granted, but equally the respondent has not succeeded in having it dismissed – neither side has won. A conditional order will be made where the court concludes it is possible, but not probable, that the claim or defence may succeed. The party will be allowed to continue with the litigation provided they pay a sum of money into court or take a specified step in relation to their claim. This ensures that the party is genuine in their desire and ability to pursue the matter and, in the case of the defendant, they are not merely delaying payment.
Where the court dismisses the application or makes an order that does not completely dispose of the claim, case management directions are usually given as to the future conduct of the case.
What costs order will be made following summary judgment hearing?
The costs order awarded will depend upon the type of claim and the outcome of the
application.
* Where a claimant succeeds in obtaining summary judgment for a specified sum, the court may award fixed costs under Part 45. However, it is open to the claimant to request a higher figure as their costs usually exceed these, and to ask for summary assessment of the costs.
* If a claimant is awarded summary judgment in an unspecified claim, the usual rule applies so that the winner (the claimant) is granted their costs. These will be summarily assessed and a further hearing will be listed to assess the damages payable by the defendant (a disposal hearing).
* If the defendant secures summary judgment so the entire claim is struck out, the court will normally order that the claimant pays the defendant’s costs of the whole claim – again, subject to summary assessment.
* If the application is dismissed, the proceedings will continue and the unsuccessful party will pay the successful party’s costs of the summary judgment hearing.
* If a conditional order is made, the usual order will be for costs in the case.
Applying for summary judgment is a useful means of bringing the matter to an early conclusion or, at the very least, putting pressure on the opponent to confront the claim.
Who can apply for an interim injunction?
Either party may apply for (and be granted) an interim injunction in support of their cause of action.
When can an interim injunction be applied for?
A party may seek an injunction at any time after proceedings have been commenced and, in exceptional cases, even beforehand. However, the court must be satisfied that the matter is urgent or it is otherwise desirable in the interests of justice.
If granted before trial, these orders are known as interim injunctions. They remain in force until the matter comes to trial (or until further order), at which point the court will decide whether or not to make a final injunction.
What is an injunction?
Injunctions may be distinguished from other court orders because breach is punishable as a contempt of court. They are a discretionary remedy and may only be granted when damages are not an adequate remedy for the applicant.
There are different types of injunctions but the primary aim is to maintain the status quo – the current position – until the trial. Generally, they will be used to prevent the defendant from taking certain steps, such as soliciting customers of the claimant, but they can also order a party to take action, for example to stop committing a nuisance.
What guidelines does the court refer to when hearing an application for an interim injunction?
When the court hears an application for an interim injunction, it does not know all the facts and so, to assist in making the correct decision, judges refer to the American Cyanamid guidelines.
When deciding whether to grant an interim injunction, the court will determine whether:
(a) there is a serious question to be tried;
(b) damages are an adequate remedy for either side;
(c) the balance of convenience lies in favour of granting or refusing the injunction; and
(d) whether there are any special factors.
What is a cross undertaking in the context of an interim injunction?
If an interim injunction is granted, the applicant must undertake to the court to pay any damages that the respondent (or any other party affected by the order) sustains by reason of the injunction, if it subsequently transpires that the injunction ought not to have been granted.
This is often called the applicant’s ‘cross- undertaking’.
How is an interim injunction applied for?
As with other types of applications, the party who seeks the order must apply by way of an application notice with evidence in support – usually, a witness statement.
Are interim injunctions usually obtained on notice or without notice?
Interim injunctions are usually obtained on notice, so the defendant has prior warning of the hearing. They last until the trial of the claimant’s action unless they are set aside earlier by the court, perhaps because of a change of circumstances.
However, under Part 25, the court may grant an interim remedy on an application made without notice if there are good reasons for doing so. This could be due to insufficient time or, more commonly, that giving notice would enable the defendant to harm the claimant in some way, such as destroying evidence that would support the claimant’s case. Secrecy is needed because if the defendant learns of the claimant’s plans they may try to cause irreparable harm to the claimant before an injunction can be secured.
What form does an injunction without notice take?
An injunction without notice takes one of two forms.
(a) The court may fix a date for a further hearing with all parties present, in which case it lasts until the date specified for that hearing. If the defendant successfully argues that the injunction should not be granted, it will be set aside.
(b) Alternatively, rather than fixing a hearing date, an injunction without notice may simply tell the defendant that they may, if they wish, apply on notice for the order to be varied or set aside. In the meantime, the injunction remains in force until trial or further order.
What are examples of injunctions that can be made without notice?
a) Freezing injunctions
These restrain a party from removing their assets from the jurisdiction (England and Wales). If notice was given of such an application, the respondent could simply transfer their assets prior to the hearing. The court must be satisfied that the applicant has a good arguable claim and there is a real risk the respondent will dispose of their assets so as to defeat the enforcement of an eventual judgment.
b) Search orders
A search order compels the respondent to allow their premises to be searched by the applicant, where the applicant believes that the respondent has documents or property belonging to them. Again, if notice was given to the respondent in advance, it would be a simple matter for them to hide the items somewhere else. The court must be satisfied that the applicant appears to have a strong case, they will suffer serious harm if the order is not made and the respondent has incriminating materials in their possession which cannot be obtained by other means.
Because freezing injunctions and search orders can be quite draconian in their impact upon the respondent, such applications are normally made to a High Court judge and must be supported by evidence in the form of an affidavit. This is a document that is similar in content to a witness statement but it is sworn or affirmed by the person making it.
What is an interim payment?
One particular type of interim remedy also covered by Part 25 is an interim payment. This is an advance payment on account of any damages, debt or other sum (excluding costs) that a defendant may be held liable to pay.
The interim payment procedure enables a claimant who has a strong case on liability to avoid the financial hardship and/ or inconvenience that might otherwise be suffered because of any delay during the period between the start of the claim and its final determination.
Before making an application to the court, the claimant should try to negotiate with the defendant or the defendant’s insurance company to obtain a voluntary interim payment. Only if one is not forthcoming, should an application be made.
When may an interim application be made?
A claimant may not seek an interim payment until after the time for acknowledging service has expired, although they can make more than one application during the proceedings.
What is the procedure for applying for an interim payment?
An application notice for an interim payment must be served at least 14 days before the hearing date. Evidence must be provided and should set out:
- the amount requested and what it will be used for;
- the amount of the sum of money that is likely to be awarded at final judgment; and
- the reasons for believing that the grounds required by the CPR are satisfied.
Any documents in support of the application should be exhibited to the witness statement.
If the respondent wishes to rely on evidence to counter the application, this must be served at least seven days before the hearing.
The applicant may then respond with further evidence provided it is served at least three days before the hearing.
What orders may the court make if they have found the claimant entitled to an interim payment?
Having established their entitlement to an interim payment, the court has discretion in relation to two questions:
(a) Should an order for an interim payment be made?
If the issues are complicated or difficult questions of law arise, the court may decide not to order an interim payment at all.
(b) If yes, what should the amount be?
If the applicant succeeds, the court cannot order a sum of more than a reasonable proportion of the likely amount of the final judgment and must take into account contributory negligence and any counterclaim. In other words, the court will try and calculate what figure is indisputably due to the claimant and then determine what the defendant is able to pay.
The court may order an interim payment in one sum or in instalments.
What effect does the order for interim payment have on the trial?
The trial judge will not be told about any interim payment order or voluntary payment until after they have determined all issues of liability and quantum, unless the defendant consents.
As the purpose of keeping any payment secret is to avoid the trial judge’s decision being influenced in any way, it is difficult to see when a defendant would give their consent.
What is the overriding objective of the CPR?
That the court deals with cases justly and proportionately.
What six objectives should the court look to achieve when dealing with cases?
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways that are proportionate to:
- the amount of money involved
- the importance of the case
- the complexity of the issues and
- the financial position of each party;
(d) ensuring that the case is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, whilst taking into account the need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders.
When must the court give effect to the overriding objective?
When making procedural decisions.
The parties are required to help the court to further the overriding objective. imposes a positive duty upon the parties and the court will expect a high level of co- operation and realism from those involved in the litigation process.
The court has to actively manage cases which means that the courts may tailor their approach to individual cases, adopting a more flexible approach to meet the object of cost- proportionate litigation. The court’s active role includes:
(a) encouraging the parties to co- operate with each other in the conduct of the proceedings;
(b) identifying the issues at an early stage;
(c) deciding promptly which issues need to be fully investigated and dealt with at a trial;
(d) deciding the order in which issues are to be resolved;
(e) encouraging the parties to use alternative dispute resolution procedures if appropriate;
(f) helping the parties to settle the case;
(g) fixing timetables or otherwise controlling the progress of the case;
(h) considering whether the likely benefits of taking a particular step justify the cost of taking it;
(i) dealing with as many aspects of the case as it can on the same occasion;
(j) dealing with the case without the parties needing to attend at court;
(k) making use of technology; and
(l) giving directions to ensure that the trial of a case proceeds quickly and efficiently.
How does the allocation to track procedure contribute to furthering the overriding objective?
One important way in which cases are dealt with proportionately is by the allocation procedure.
Cases are allocated to different tracks or ‘routes’ to ensure that the most difficult and highest value claims receive greater resources and attention than simpler matters.
Different rules apply with the small claims track requiring the least formality to recognise the low value of the claims and the fact they are often conducted by litigants in person. The fast track is the standard route along which most cases proceed, whereas the multi- track incorporates greater flexibility to reflect the variety and complexity of these cases.
Who makes the decision in provisional allocation?
Initially the decision as to track allocation is made by a court officer, but this is only confirmed after the involvement of the parties.
* When a defence is filed, the court will provisionally decide which track appears the most appropriate for the claim.
* The court will then serve on the parties a notice of proposed allocation, requiring them to
file and serve a completed directions questionnaire by a specified date.
The directions questionnaire is a key document in the progress of a case and will be used by
the court to confirm the track and to determine directions for case management. In claims that
have been provisionally allocated to the multi- track, the following documents should also be prepared:
(a) a case summary
(b) a disclosure report
(c) a costs budget and budget discussion report.
In addition, a draft order for directions should accompany the return of the questionnaire.
What is the directions questionnaire?
Because of the importance of the directions questionnaire, the parties must consult with one another and co- operate in completing it, including attempting to agree case management directions. However, if this proves impossible, perhaps because one of the parties is intransigent, this should not delay the others in filing their completed questionnaires.
The directions questionnaire (Form N181) is divided into 10 parts, lettered A to J.
What are the possible consequences of failure to file the directions questionnaire?
Consequences will follow if a party fails to file the directions questionnaire:
* If the claim is for money in the County Court, the court will serve a notice on the defaulting party requiring compliance within seven days. Failure to do so results in the party’s statement of case being automatically struck out.
- In all other cases, the court will make such order as it considers appropriate. This may include an order for directions, to strike out a statement of case or to list the matter for a case management conference.
How does the court allocate a case to a particular track?
In deciding which track to allocate a case, the most important factor will be the financial value of the claim.
However, Part 26 sets out other factors to which the court must have regard, including the remedy sought, the complexity of the facts and the law, the number of parties involved, the value of any counterclaim, the amount of oral evidence and the circumstances of the parties.
What are the recent changes to allocation to a track?
A new legal track has been introduced which catches claims that are above £25,000 but less than £100,000. In addition the claim must involve a maximum of three parties and no more than two experts giving oral evidence on each side and an anticipated trial of no more than three days.
Complexity bands:
In addition to this change, within the fast and intermediate tracks, claims are now assigned to a complexity band which will determine the amount of fixed recoverable costs.
There are four complexity bands for each track.
What is the small claims track?
This track is intended to provide a proportionate procedure to deal with straightforward claims.
Value of claim :
‘Small claims’ are those with a financial value of £10,000 or less, although note that the rules for personal injury claims are slightly different. In road traffic cases occurring after 31 May 2021, the value of the damages claimed for the pain, suffering and loss of amenity aspect must not exceed £5,000.
Type of claim :
The type of cases the small claims track would deal with are consumer disputes, disputes about ownership of goods and those between a landlord and tenant (but not for possession). Also, lower value personal injury cases.
What is the procedure for the small claims track?
The requirements for the preparation of the case and the conduct of the hearing are designed to enable litigants in person to represent themselves. As a consequence, certain parts of the CPR do not apply to the small claims track, for example, disclosure and inspection and provisions relating to evidence and experts.
Directions will be issued by the court but these will be quite simple in content to reflect the reality that solicitors are not usually involved and costs cannot generally be recovered from the losing party.
Typical directions would include:
* each party delivering to the others copies of all documents on which they intend to rely;
* a requirement for them to bring original documents to the hearing; and
* the parties not being allowed to rely on an expert’s report without express permission from the court.
The hearing itself is informal and, if all parties agree, a court can make a decision based on
the statements of case and documents submitted rather than by hearing oral evidence.
What is the fast track?
For the ‘middle range’ of cases, the fast track is the appropriate way forward.
Value of the claim :
To follow the fast track, the claim must fall on or between the relevant financial value bands of £10,000.01 and £25,000. However, the court will also take into account the likely length of the trial before making a final decision on allocation. Only those cases where the trial is expected to last no longer than one day are generally suitable for the fast track.
What is the procedure for the fast track?
When a case is allocated to the fast track, the court will give directions on how the matter is to proceed to trial and, usually, the court will simply issue standard directions.
Standard directions:
a) Disclosure of documents (4 weeks)
b) Exchange of witness statements (10 weeks)
c) Exchange of experts’ reports (14 weeks)
d) Court sends pre-trial check lists (20 weeks)
e) Parties file pre-trial check lists (22 weeks)
f) Hearing (trial) (30 weeks)
These periods run from the date of allocation. The time between each step is intended to be sufficient to allow the parties to prepare their case, whilst being short enough to discourage tactical litigation such as making technical applications. The court will also fix the date and place of the trial.
Although the parties may agree different directions, these must be approved by the court. They may also agree in writing to vary the timetable but not the trial date nor the date for returning the pre- trial checklists.
What are the key differences between the fast track and the multi track?
(a) Directions are standard, so not tailored to the individual case.
(b) Expert evidence is more limited. The court will usually order a single joint expert, unless there is a good reason to appoint separate experts, and will rely upon their written report at trial rather than allowing the expert to give oral evidence.
(c) The trial is expected to last no longer than a day.
(d) The power to award costs is more limited and the judge will generally assess these summarily (instantly) at the end of the trial.
What are the complexity bands for the fast track?
Band 1 is for defendant debt claims and road traffic accident related, non-personal injury claims.
Band 2 and 3 cover various types of road traffic accident related personal injury claims and other types of personal injury claims.
Band 4 includes professional negligence claims and other claims classified as complex.
What is the intermediate band?
A new legal track has been introduced which catches claims that are above £25,000 but less than £100,000. In addition the claim must involve a maximum of three parties and no more than two experts giving oral evidence on each side and an anticipated trial of no more than three days.
What are the complexity bands in the intermediate track?
Band 1 is for defended debt matters and claims with only one issue in despite where the trial is anticipated to take no more than one day.
Bands 2 and 3 are for claims, including personal injury claims where there is more than one issue in dispute. Band 2 is used for less complex claims, whereas more complex matters will be allocated to Band 3.
Band 4 is for the most complex claims where a serious issue of fact and law are to be considered and the trial is anticipated to take three days.
The parties are encouraged to seek to agree the band, failing which the court will assign the case.
What kind of directions will the court give for the intermediate track?
On the intermediate track, the court may fix a case management conference. The parties must either agree appropriate directions (which are likely to be standard directions) or submit their proposals to the court at least seven days prior to the conference.
The matters to be dealt with include:
Disclosureof documents.
Service of witness statements but note that the total length of all permitted witness statements and summaries must not exceed 30 pages.
Expert evidence with oral expert evidence being limited to one witness per party, except where a second expert is reasonably required and proportionate. Any expert report must not exceed 20 pages including details of the issues, the conclusions and the reasons for these but excluding any supporting materials such as photographs, plans and academic articles.
Whether to fix a pre-trial review.
Listing for trial (which must not exceed three days).
The standard period between the giving of directions and trial will be no more than 30 weeks. If the parties have agreed directions (which must include a timetable of the progress of the case to trial), the court may approve these without a hearing.
What is the multi-track?
Value :
Cases that have a value of more than £25,000 will usually be allocated to this track. The multi- track therefore includes an enormously wide range of cases, from the fairly straightforward to the most complex and weighty matters involving claims for millions of pounds and multi- party claims.
Procedure :
Case management on the multi- track has to reflect this wide diversity of claims. In simpler matters, the standard directions as used on the fast track may be perfectly adequate.
Here, the court will usually:
* give directions for the management of the case; and
* set a timetable for the steps to be taken up to trial.
However, in more complex claims, the court will need to adopt a flexible approach. This recognises that the time required for the parties to complete each step may be considerably longer than on the fast track.
In such instances, the court will:
- fix a case management conference to ensure that appropriate directions relating to the management of the case are given.
What happens at the case management conference?
Because multi- track cases are more complex, a discussion may prove helpful in deciding what actions are necessary to progress the matter to trial and how long these will take. To enable the judge to do this effectively, the ‘live’ issues between the parties must be evaluated because these will impact upon decisions about what directions are appropriate.
Where this more hands on approach is required, the CMC will:
(a) review the steps the parties have already taken to prepare the case;
(b) check their compliance with any directions the court has made (for example, following an application for summary judgment that has been dismissed); and
(c) consider and give directions about future steps to ensure the claim proceeds in accordance with the overriding objective.
An initial CMC may be listed as soon as a claim is allocated to the multi- track. Often one CMC will prove more than adequate to deal with any issues that arise during the proceedings but, if necessary, the court may order further CMCs to review the progress the parties have made.
If the trial is approaching, such a hearing may also be referred to as a pre- trial review but the purpose and substance are similar.
Who needs to attend the CMC?
If a party has a legal representative, an individual who is familiar with the case must attend the CMC. This will usually be someone who is personally involved in the conduct of the case and who has both the authority and information available to deal with any matter that may reasonably be expected to arise. This could include the fixing of the timetable, the identification of issues and matters of evidence.
Where the inadequacy of the person attending leads to the adjournment of the hearing, the court may order that the other party’s costs incurred in preparing for and attending the hearing are paid by either the solicitor personally or their firm (known as a wasted costs order).
What is a case summary?
Once the parties have served their statements of case, it will become clearer what the issues are. The purpose of the case summary is to describe what matters are still in dispute and which are agreed – effectively, it is an updated case analysis. In most multi- track cases, a case summary will be prepared for the CMC to assist the judge in determining how the case should proceed to trial.
The case summary should set out a brief chronology of the claim, state the factual issues that are agreed and those that are not, and the evidence needed to decide them. The claimant is responsible for preparing the document but, if possible, it should be agreed with the other parties.
What kind of directions will be given on the multi-track?
In all cases, an order for directions will be made, with the aim being to provide a ‘road map’ to take the proceedings all the way to trial in an efficient and cost- effective way. For the more straightforward cases, standard directions may be sufficient. If not, in line with Part 29, the court’s general approach will be to list directions covering the following issues:
Is further information required to clarify a party’s case?
a) Disclosure of documents and inspection
b) Simultaneous exchange of factual evidence (witnesses)
c) Expert evidence
i) Single joint expert (unless a good reason not to)
ii) Simultaneous exchange of separate expert evidence (on liability and quantum?)
d) Costs of CMC
e) Consider ADR
f) Timetable to trial
g) Further review CMC
Many of these mirror the standard directions issued on the fast track but usually the provisions are more detailed. To assist in drafting case management directions, the parties can refer to a ‘menu’ of directions, which may be found online on the Ministry of Justice website. These include the standard directions but also a number of model directions, which may be adapted as appropriate to the circumstances of the particular case.
Unlike the more rigid approach adopted on the fast track, there is some flexibility as to the timing of the steps and the parties may agree in writing to vary the timetable.
When deciding directions for CMC which deadlines are the parties not allowed to change in terms of directions without making an application to the court?
However, they are precluded from changing any of the following without making an application to the court:
(a) any case management conference;
(b) a pre- trial review;
(c) the return of a pre- trial checklist; or
(d) the trial or the trial period.
To ensure the flow of communication with the court at all times, it is usual for the parties to be directed to inform the court immediately if the claim is settled and to file a draft consent order giving effect to their agreement. This is in accordance with the overriding objective, and in particular the principles of saving expense and allotting to a case only an appropriate share of the court’s resources.
Finally, the issue of costs of the CMC will be determined and, normally, an order will be made for costs in the case.
What happens if a party fails to comply with directions ?
If a party fails to keep precisely to the directions timetable, this will not generally be an issue provided the parties co- operate and are able to meet certain key dates, such as the CMC and the trial. However, to ensure the case proceeds without delay, if a step is missed:
* any other party may apply for an order enforcing compliance and/ or for a sanction to be imposed.
Furthermore, to comply with the overriding objective:
the trial date is sacrosanct and the court will not allow failure to comply with directions to lead to the postponement of the trial, unless the circumstances are exceptional.
What is the purpose of cost management?
Costs management is another way in which the court seeks to control the litigation. It enables the court to manage both the steps to be taken and the costs to be incurred by the parties in multi- track cases, so as to further the overriding objective. Generally, only claims of £10 million or more are excluded from the process. The aim is to ensure that future costs are reasonable and do not become disproportionate by determining what actions should be taken in the proceedings and at what expense.
What is a costs budget?
Costs are managed by the parties being required to provide a costs budget in the prescribed form (Precedent H).
What is included in a costs budget?
The costs budget consists of:
∘ a detailed breakdown of the costs and disbursements already incurred (pre- action, issue of proceedings and statements of case) – ‘incurred costs’; and
∘ an estimate of future costs and the assumptions on which those are based for the future phases of the proceedings, namely, case management, disclosure, evidence, pre- trial review, trial preparation and trial stages, along with any ADR or settlement discussions and contingencies. These are known as ‘budgeted costs’.
A budget must be dated and verified by a statement of truth signed by a senior legal representative of the party.
When should the costs budget be filed?
Costs budgets must be filed:
∘ with the directions questionnaire for claims of less than £50,000; and
∘ no later than 21 days before the first CMC for all other claims.
Having done so, the parties must complete a budget discussion report (Precedent R) no later than seven days before the first CMC. This itemises the figures for phases that are agreed and those that are not, with a brief summary of the grounds of dispute.
What is the judge’s role in the cost budget?
The judge will review those costs which are disputed by systematically cross- referring between the parties’ proposed directions and their budgets to ensure the suggested costs are reasonable and proportionate to the case in hand.
The budget will then be revised as necessary. The court normally conducts a costs and case management conference at the same time but they may be held separately in complex cases.
What happens if a party wants to change a costs budget?
Once a costs budget has been agreed or approved by the court, it is extremely difficult to amend or update it.
Consequently, it should be drafted with great care as inadequacies and mistakes will not be rectified.
Only if the other party agrees – which is unlikely – or the court can be persuaded that there have been significant developments, for example the need for an additional expert’s report that could not have been anticipated, may it be revised.
However, this is a rare event. In such circumstances, the parties must file a budget variation summary sheet (Precedent T).
The rigidity of the process is one reason why litigation has become so front- loaded. It is much easier to draft a costs budget that accurately reflects the likely costs if much of the work has already been completed.
What happens if a party considers that the other is acting oppressively in the litigation causing it to spend a disproportional amount of money?
If one party considers that another is acting oppressively in seeking to cause the applicant to spend money disproportionately on costs, an application can be made to the court, which will grant such relief as may be appropriate. This is to ensure that parties with ‘deep pockets’ do not take advantage of their financial position to discourage their opponent from continuing with the litigation.
What are the consequences of failing to file a costs budget on time?
If a party files their costs budget late or not at all, there are significant consequences for that party and (potentially) their lawyers.
Rule 3.14 provides that, unless the court orders otherwise, the party will be treated as having filed a costs budget consisting only of the court fees.
Thus, unless the court gives relief from this automatic sanction, that party will not be able to recover any of its future legal costs, apart from court fees, from another party.
When will a costs management order be made?
As a further means of ensuring costs are kept in check, the court is now highly likely to make a costs management order. Such an order is imposed unless the judge is satisfied that the litigation can be conducted justly and at proportionate cost.
In the order the court will:
a) record the extent to which any incurred or budgeted costs are agreed between the parties; and
b) in respect of the budgeted costs that are not agreed, record the court’s approval after making appropriate revisions.
What is the effect of a costs management order?
The court will thereafter control the parties’ budgets in respect of recoverable costs. If at trial one party is ordered to pay another party’s costs to be assessed by the court on the standard (usual) basis, the court will not depart from the receiving party’s last approved or agreed budget unless satisfied there is a good reason for doing so. The consequence is that the parties are tied to their costs budget figures even if the litigation proves far more expensive than anticipated.
What is the effect if no costs management order is given?
If there is no costs management order, there is more flexibility when dealing with costs. Where there is a difference of 20% or more between the costs claimed by the receiving party and the costs as set out in the budget, the receiving party must provide a statement of the reasons for the difference. It is then a matter for the court to decide whether the additional amounts can be recovered.
What is the ultimate sanction that the court has?
CPR, r 3.4 gives the court the ultimate sanction of striking out a party’s case so their claim or defence comes to an immediate halt. The two most common scenarios where the court may exercise this power are:
* the statement of case discloses no reasonable grounds for bringing or defending the claim; and
there has been a failure to comply with a rule, practice direction or court order.
These would include a particulars of claim that does not set out any facts indicating what the claim or the defence is about – for example, ‘money owed £5,000’. Also, those statements of case that contain a coherent set of facts but where those facts, even if true, do not disclose any legally recognisable claim or defence so they are ‘doomed to failure’.
Other than strike out, what other sanctions does the court have at its disposal?
- Costs: a common sanction is to require the party in default to pay the other party’s additional costs on an indemnity (penalty) basis.
- Interest: orders could be made increasing or reducing – depending upon which party is at fault – the interest payable on any damages.
The unless order: if a party has not taken a step in the proceedings in accordance with a court order, an application may be made to the court for an ‘unless’ order.
How can a party obtain relief from sanctions?
If the court imposes a sanction, this will take effect unless the party applies to obtain relief, in other words, to overturn the penalty. Unless the sanction is the payment of costs, in which case the party in default will have to appeal against the order, r 3.9(1) will apply.
In deciding whether to grant relief, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need:
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.
To seek a reprieve from a penalty imposed, the party must apply promptly and support their application with evidence addressing the factors outlined below.
How does a court come to the conclusion that relief from sanctions may be granted?
Denton v TH White Ltd [2014] EWCA Civ 906, the appeal court ruled that, when considering a party’s failure to comply with any rule, practice direction or court order, the court should adopt a structured approach as follows:
(a) The first stage is to identify and assess the seriousness or significance of the relevant failure. If a breach was not serious or significant, relief is usually granted.
(b) The second stage is to consider why the failure or default occurred.
(c) The third stage is to evaluate all the circumstances of the case so as to enable the court to deal justly with the application. Factors would include whether the trial date could still be met and the effect the failure to comply and the granting of relief would have on each party.
In recent times, judges have taken a robust approach to such applications and the party will face an uphill task to convince the court to grant relief. However, the judges have also warned that a party could be penalised if they seek, unreasonably, to take advantage of a mistake by an opponent where the failure concerned a minor or technical breach that had no effect on the litigation.
What is disclosure?
Once the parties have filed and served their statements of case, the court will issue directions for the future conduct of the proceedings. The first of these is usually a requirement for the disclosure and inspection of documents.
The main purpose of this step is to enable the parties to evaluate the strengths and weaknesses of their case in advance of the trial. This will assist them in making an informed decision about whether to pursue the matter or whether to seek an early settlement. The parties are required to reveal to each other any documents that have a bearing on the case, even if they are unhelpful to the party giving disclosure and which they would rather keep hidden.
Disclosure is usually achieved by completing a list of documents. The parties may then inspect, that is read, some of the other party’s documents. This is to ensure they are not taken by surprise at the trial and that the court has all the relevant information to ensure justice is done.
Disclosure is governed by Part 31 of the CPR, which applies to all claims except those allocated to the small claims track.
How is disclosure effected?
This is done by preparing and serving a list of documents on all the other parties. Once the party has gathered together the documents, they are disclosed by way of a list and this is achieved by the completion of Form N265.
What is considered a ‘document’ in disclosure?
Documents are defined as anything in which information of any description is recorded.
Consequently, it includes written documents, audiotapes, videotapes and photographs although this is not an exhaustive list. Electronic documents, such as emails, word- processed documents and databases are also subject to disclosure.
The definition under the CPR is extensive, but the crucial words are ‘information … is recorded’.
This is what determines whether or not the document forms part of disclosure. It is irrelevant whether it is admissible or whether a party wishes to rely upon the actual document itself at trial.
How are documents disclosed on the small track?
The usual direction is that each party shall, at least 14 days before the date of the final hearing, file and serve on every other party copies of all documents (including any expert’s report) on which they intend to rely at that hearing.
How are documents disclosed on the fast and intermediate track?
Disclosure will be limited to what is necessary to deal with the case justly and at proportionate cost.
On the fast track, although standard disclosure is still an option, it is anticipated that disclosure will be more limited. The court may direct that nodisclosuretakes place or specify the documents or classes of documents which the parties must disclose.
On the intermediate track, the court will select one of the following orders:
- To dispense withdisclosure.
- Disclosureof documents on which a party relies and, at the same time, a request for any specificdisclosureit requires from any other party.
- Disclosureon an issue-by-issue basis.
- Disclosureof documents which it is reasonable to suppose may contain information which enables a party to advance its own case or to damage that of another party or which leads to an enquiry which has these consequences.
- Standarddisclosure.
- Any otherdisclosureorder considered appropriate.
How are documents disclosed on the multi- track?
Although standard disclosure is usually ordered, the court may tailor the order to the requirements of the particular case, taking account of the importance of the issues and the complexity of the matter. This necessitates a more involved procedure.
How do the parties notify the court of their requirements for disclosure?
By compiling a disclosure report.
When must the disclosure report be filed and served?
Not less than 14 days before the first case management conference (CMC).
What happens after the disclosure report is filed and served?
Not less than 7 days before the first CMC the parties must discuss and seek to agree a proposal for disclosure that meets the overriding objective. Any agreed proposal must be filed at court.
What orders for disclosure can the court make?
An order for standard disclosure or any other order that the court considers appropriate.
An order:
* dispensing with disclosure;
* for specific disclosure;
* disclosure on an issue by issue basis.
In recognition of the variety of cases that are dealt with on the multi- track, the parties have the benefit of a menu of options for disclosure from which they can select the most appropriate for their particular matter.
These may be accessed on the Ministry of Justice website. Judges can make orders that cover the entire spectrum from dispensing with disclosure entirely to what Lord Jackson referred to as the ‘keys to the warehouse approach’ – although both of these will be very rare in practice. More commonly, the court will order something in between such as the provision of disclosure in stages or on an issue by issue basis – perhaps that disclosure is only required on the issue of liability but not causation. A more complex example is an order that a party should disclose any documents it is reasonable to suppose may contain information which enables that party to advance its own case or to damage that of another party’s case, or which leads to an enquiry that has either of these consequences.
However, it should be borne in mind that, to deal with concerns about the potentially huge task of disclosure a party may face, the court is required actively to consider limiting disclosure to deal with the case justly.
What encompasses standard disclosure?
Standard disclosure is defined in CPR, r 31.6 and requires a party to disclose:
(a) the documents on which they rely; and
(b) the documents which:
(i) adversely affect their own case;
(ii) adversely affect another party’s case; or
(iii) support another party’s case.
Although there appear to be four possibilities, they mirror each other so that effectively the requirement is to disclose any documents that help or hinder the party. Most clients will be happy to provide their solicitors with favourable documents, namely those containing information on which they intend to rely. However, they may be less forthcoming with documents that adversely affect their own case or support their opponent’s. Litigants often find it difficult to accept that they are required to provide their opponent with the means to defeat them. However, not only is this a requirement of the CPR, but it is a mutual obligation so they should receive similar disclosure from the other party.
The references to ‘the case’ are those issues that are in dispute and the parties should concentrate their efforts in searching for documents that impact on these. There is no need to search for and disclose documents that record only information relating to agreed matters.
What is the duty of disclosure limited to?
The duty to disclose is limited to documents in the party’s control (CPR, r 31.8). This means documents that:
(a) either are or were in their physical possession;
(b) they have a right to possess; or
(c) they have a right to inspect.
What is the duty to search with regards to disclosure?
All parties to the proceedings are subject to a duty to search for documents.
A party is required to make a reasonable and proportionate search for all documents that:
(a) adversely affect their own case;
(b) adversely affect another party’s case; or
(c) support another party’s case.
Documents on which the party intends to rely are not listed but, presumably, the party would look for these anyway as it is in their interests to do so.
What is reasonable depends upon:
* the number of documents involved;
* the nature and complexity of the proceedings;
* the ease and expense of retrieval of any particular document; and
* the significance of the document.
Thus, if a document is peripheral to the main issues and would be expensive to locate, it would not be reasonable for the party to be ordered to search for it. In contrast, if the claim is of a high value, the search required is likely to be more extensive than for a low value one.
How is the duty of search limited?
The duty to search is not exhaustive and a party may limit the extent of their search in several ways:
* by not searching for documents that came into existence before a particular date; or
* by specifying a particular place or places they search; or
* by limiting the categories of documents.
Any such limitation would need to be justified.
e.g. by time, location, category, type of electronic storage devices, keywords
These limitations will be acceptable if the court is satisfied they would not affect a proper investigation into the merits of the case. Arguments concerning the extent of the disclosure provided may arise after lists of documents have been sent, in the context of an application by the dissatisfied party for further disclosure. However, it is sensible and more cost effective to avoid them by proposing (and hopefully agreeing) any limitations earlier in the proceedings, either when drafting the disclosure report or attending a directions hearing. This would also be in accordance with the overriding objective.
Note that if the search is limited in any way, this must be specifically stated in the list of documents.
How are electronic documents disclosed?
Electronic documents include those which are readily accessible from computer systems and other electronic devices and media, but also those stored on servers and back- up systems even if they have been deleted. There are special rules that apply because the sheer volume of such documents is such that disclosure could become a mammoth task.
The CPR require the parties to manage electronic documents to minimise the cost incurred in disclosure and to use technology to ensure that the search is undertaken efficiently and effectively.
To keep the work involved to a sensible level, the parties must discuss and (if possible) agree such matters as the categories of electronic documents to be disclosed, how data will be exchanged, the format for inspection and any limitations, for example, what keywords will be used. This must be done before directions are given for the conduct of the case and the parties may, if they wish, use an electronic disclosure questionnaire for this purpose.
At the case management conference, the parties will discuss disclosure and the court will then either give written directions on how electronic disclosure will proceed or order a separate hearing to deal with this aspect.
How is disclosure made?
Once the party has gathered together the documents, they are disclosed by way of a list and this is achieved by the completion of Form N265. The contents of the list of documents are as follows.
Formalities: the court, the claim number and the parties are set out in the top right hand corner.
(b) Disclosure statement: the party must sign to confirm the extent of the search made to locate any documents.
They must also certify that they understand their duty of disclosure and that, to the best of their knowledge, the duty has been carried out.
A legal representative cannot sign the disclosure statement on behalf of their client.
Where the party is a partnership, LLP, company or corporation, an individual in that organisation who was responsible for overseeing the disclosure process should sign. The name, address and the office or position that the signatory holds in the disclosing party or the basis upon which they have made the statement on behalf of the party must be included.
A party may decide not to permit inspection of a category or class of documents because they consider it would be disproportionate to the issues in the case. If so, they must explain their reasons on the disclosure statement, for example, the difficulty or expense such a search would have entailed or the documents’ marginal relevance.
The duty of disclosure is regarded so seriously that proceedings for contempt of court may be brought against anyone who makes a false disclosure statement without an honest belief in its truth. It is also a continuing duty so that if, after signing the statement and at any time before the proceedings are concluded, the party becomes aware of additional documents, they must prepare and serve a supplemental list of documents. Having done so, if they wish to rely upon the ‘new’ document at trial and the opponent does not agree, they will have to obtain the court’s permission.
(c) The list: this is on the final page and consists of three parts.
‘Part 1’ – In the first part of the list are documents that are within the party’s control and which they do not object to the other party inspecting. These are usually numbered and listed in date order with a concise description, for example, email from A to B dated 10 May 20XX or contract dated 15 October 20XX between X and Y.
‘Part 2’ – In the second section are those documents which are in the party’s control but where there is an objection to inspection, usually because they are privileged
‘Part 3’ – The final, third part sets out the documents that are not privileged from inspection but are no longer in the party’s control. The list must state what happened to the documents, for example, that they were lost or destroyed in a fire. The most common scenario where this arises is in relation to correspondence – a copy of a letter retained by solicitors on their file would be disclosed in Part 1, and Part 3 might state: ‘The original of the letter from the claimant’s solicitors to the defendant dated 12 October 20XX which was last in the claimant’s control on the day it was posted.
The importance of disclosure is underlined by the fact that a party who fails to disclose a document may not rely on it at trial unless the court permits and, if such a document is harmful to their claim or defence, their case could even be struck out.
Set out below is the defendant’s completed list of documents for the claim by Rural Dairies
Ltd against Country Fare Limited. This is provided to illustrate how the list would be drafted in
practice, although the actual wording may vary.
How are documents withheld on the grounds of legal professional privilege?
There are some instances where a party can legitimately withhold documents and this is usually because they come within the definition of legal professional privilege. Such documents must still
be disclosed in the list but there are two key differences:
(a) the other parties cannot inspect them; and
(b) they are described generically.
This is in direct contrast with Part 1 documents, which must be described precisely so the other party can identify what they are.
The effect is that particular documents are disclosed but otherwise concealed under an umbrella description, thus preventing identification of their maker, any recipient and the contents. However, only those documents that satisfy the legal tests for legal professional privilege qualify for this special treatment.
The advantage to a party of a document being privileged is that, whilst it is disclosable, it cannot be inspected. The most common type of privilege used is legal professional privilege, consisting of advice privilege and litigation privilege. To qualify, the document must satisfy the legal requirements and a party cannot claim privilege simply because the document is adverse to their case or is confidential.
What is legal advice privilege?
Legal advice privilege is essential as it would be difficult for lawyers to advise their clients effectively and honestly without it. Because the purpose is to allow free access to the legal profession, solicitors, licensed conveyancers, legal executives, in- house lawyers, barristers and foreign lawyers are all protected; but the privilege does not extend to legal advice given by a non- lawyer such as an accountant.
Furthermore, advice privilege only applies where the sole or dominant purpose of the communication is to seek or to give legal advice.
If the document has a dual purpose, the dominant one must be established. If the court finds this was, for example, to obtain commercial advice from the lawyer, the document is not privileged. Thus, clients need to be careful when communicating with their solicitors.
It is important not to confuse documents that are to be used at a trial with the disclosure process. For example, an attendance note that records advice given at a meeting between the client and their lawyer would not be referred to at trial, but is disclosable. This is because the note contains information on which the client would rely or which might adversely affect their case, perhaps concerning a discussion about the strengths and weaknesses of the evidence.
Examples:
Letters or emails seeking or giving advice between solicitor and client.
Attendance notes of a meeting between solicitor and client.
Instructions to counsel and counsel’s advice.
What is litigation privilege?
Litigation privilege is more complex as there are three distinct aspects that must be satisfied.
The document must be a communication:
(a) passing between the client or lawyer and a third party;
(b) which came into existence when litigation was contemplated or ongoing; and
(c) which was produced with a view to the litigation, either for the sole or dominant purpose of giving or receiving legal advice in regard to it, or for obtaining evidence to be used in the litigation.
Examples would include a report from an expert obtained by a solicitor in order to advise their client on existing or contemplated proceedings, or witness statements obtained by a legal executive for the purpose of using as evidence.
Who? …Communications passing between the client or the lawyer and a third party…
Timing? …provided they came into existence after litigation was contemplated or commenced…
Purpose? …and were made for the sole or dominant purpose of obtaining advice or for using as evidence in the litigation.
- Letter to a witness, proofs of evidence and witness statements.
- Instructions to an expert and their report.
- After the client makes an appointment with their lawyer to discuss proceedings.
- After proceedings are issued.
- An expert’s report to advise on whether a contract was breached.
- An accountant’s report on the losses suffered.
- The statement of a witness who saw the accident.
How is privilege waived?
Privilege is the right of the client and not their lawyer. The client may give up, or waive, that privilege. Waiver will often occur during litigation because it is the only way to advance the
proceedings. For example, while a party’s solicitors are drafting statements of case and witness statements, they are privileged from inspection; but once these are served on the other side, the privilege is waived. Here it is intentional but sometimes waiver of privilege occurs by mistake.
What should a solicitor do if they are accidentally send privileged information?
A barrister is instructed to advise a claimant on the evidence in a claim. In error, the barrister’s chambers send the letter with the enclosed advice to the solicitors acting for the defendant. The solicitor reads the letter and immediately appreciates that, although it concerns their client’s case, it was meant for the claimant’s solicitors. What should they do?
Option 1 – read the advice
Applying the SRA Code, principle 7 would suggest continuing to read the letter and the enclosure as it is in the defendant’s best interests to know what advice the claimant is receiving about the evidence in the case.
Option 2 – do not read the advice
Principles 1, 2 and 5 suggest otherwise as reading the advice would not uphold the proper administration of justice, nor uphold public trust and confidence in the solicitors’ profession and would lack integrity.
Action required:
The solicitor should return the advice to the barristers’ chambers pointing out the error and confirming they have not read it. However, they should not inform their client – the defendant. SRA Code 6.4(d) provides that the general duty to make a client aware of all relevant information does not apply if that information is contained in a privileged document that has been mistakenly disclosed.
What is without prejudice correspondence?
Without prejudice correspondence will record information as part of a party’s genuine attempt to settle a case. The correspondence will probably therefore satisfy the definition of standard disclosure as it is likely to set out the strengths of a party’s case and may also contain concessions that are adverse to their case and support the opponent.
Remember that it is irrelevant to standard disclosure that the recipient of a document has already seen it.
The point of marking correspondence without prejudice is so the trial judge is unaware of the content whereas, in contrast, the disclosure process is just between the parties.
Accordingly, like any other correspondence between the parties that meets the test for standard disclosure, those documents marked without prejudice should be disclosed and no privilege from inspection claimed.
Who has the right to inspect what in disclosure?
Having received the opponent’s list, the party is entitled to inspect documents contained in Part 1. They cannot inspect documents in Part 2 because they are covered by legal professional privilege and those in Part 3 are no longer in the party’s control.
The request to inspect must be made in writing and granted within seven days, although a longer period is often agreed between the parties. Rather than going to inspect the documents personally, a party may ask for copies of the documents if they agree to pay reasonable copying costs.
Large numbers of copies of electronic documents are often provided on an external hard drive, otherwise USB memory keys or DVDs are commonly used.
What should a party do if they are dissatisfied with their opponent’s efforts of disclosure?
To ensure that disclosure is complied with properly, the CPR provide mechanisms to assist a party who is dissatisfied with their opponent’s efforts. However, before applying to the court, the party should write to the other side first as this may lead to a quicker and cheaper resolution of the issue. If this fails, an application notice (Form N244) must be filed at court accompanied by a witness statement, and served on the opponent.
How is an application for specific disclosure made?
Once the list of documents has been served, the contents should be scrutinised carefully. If the disclosure appears inadequate, an application may be made for specific disclosure under CPR, r 31.12. This could request an order that the party:
- carry out a more extensive search; and
- disclose any further documents located as a result of that search; or
- disclose specific documents that the party would have expected to see.
The application will require a witness statement in support. This should explain why the applicant believes the document exists, perhaps because the party has seen it previously, and justify the application. It may be that the document is vital to establish an issue such as liability or the information contained will enable the party to pursue a line of enquiry into the disputed facts.
Can disclosure privilege be disputed?
The disclosure provisions could (in theory) be abused by parties who wish to hide documents that are unhelpful to their case. To overcome this, an application can be made to the court under CPR, r 31.19 to challenge a claim for privilege. The court may require the party claiming privilege to produce the document, invite any person (whether or not a party) to make representations and will determine whether it has been correctly categorised. If not, the court will order that the document be revealed to the opponent.
However, the effectiveness of this option is limited by the broad nature of the claim for privilege and the general description in Part 2 of the list of documents, which makes it difficult for a party to evaluate whether privilege is being correctly claimed or not.
What is pre-action disclosure?
The pre- action protocols require the parties to prospective litigation to share information. However, there is no general obligation on a party to show their opponent the contents of documents or to disclose those which are adverse to their own position. Although a request can be made to the other party in this regard, the only way to compel such disclosure is by way of court order. Therefore, prior to a claim form being issued, the parties may to a large extent select those documents they wish to show and keep all the others hidden.
To overcome this, a party may issue an application for pre- action disclosure under CPR, r 31.16. This procedure is normally used where a party is unsure as to the strength of their case, so they can then make an informed decision as to whether to issue proceedings against the intended defendant.
What needs to be included in an application for pre-action disclosure?
The application must be supported by a witness statement and the court must be satisfied that:
* both the applicant and the respondent are likely to be a party to subsequent proceedings;
* the documents sought would come within standard disclosure; and
disclosure is desirable to dispose fairly of the anticipated proceedings, assist the dispute being resolved without proceedings or save costs.
What is non-party disclosure?
Where proceedings have commenced, a party can apply for disclosure against a non- party= if this would help to resolve an issue in the case. The most common use of this procedure is where a party indicates in their list of documents that they no longer have a document in their possession, but that X does. The other party may then write to X asking for a copy of the document. If X refuses to supply that copy voluntarily, an application may be made for non- party disclosure against X.
What needs to be included in an application for non-party disclosure?
The application must be supported by evidence and disclosure will only be ordered if:
(a) the documents in question are likely to support the applicant’s case or adversely affect the case of another party; and
(b) disclosure is necessary to dispose fairly of the case or to save costs.
The order must specify the documents to be disclosed; and require the non- party to identify which documents are no longer in their control and which are privileged.
How may the court control the giving of evidence?
In particular, the court may control the evidence by giving directions as to:
* the issues on which it requires evidence, whether liability, causation or quantum;
* the nature of the evidence it requires to decide those issues, for example, an expert’s report;
* the number of witnesses of fact a party may call at trial; and
* the way in which the evidence is to be placed before the court, whether orally or by relying upon written statements.
When exercising its powers, the court will bear in mind the overriding objective in CPR, r 1.1 to decide matters justly and at proportionate expense.
This will involve the court being actively involved throughout the proceedings, up to and including the trial.
Even at this late stage, the judge could, for example, decide that an issue which had been raised is no longer important and order that any evidence relating to it should be excluded.
What is the legal burden of proof and what is the general rule?
The burden of proof refers to the party’s duty to produce sufficient evidence to establish their allegation or argument.
The legal burden of proof lies with the claimant and each fact must be proved unless it is admitted by the opponent.
For example, a claimant alleging breach of contract must prove that a contract existed between the parties, the defendant broke the relevant express and/ or implied terms of the contract, and the claimant suffered loss as a result.
What is the exception to the general rule of the legal burden of proof?
The exception to this is where the defendant in civil proceedings has been convicted of a relevant criminal offence. Under s 11 of the Civil Evidence Act 1968, the burden of proof is reversed – unsurprising given the higher standard of proof required to obtain a conviction in the criminal courts. Thus, if a defendant wishes to argue they should not have been convicted they must prove this, meaning that the legal burden has shifted on this point.
When will the burden of proof fall on the defendant?
There are a few occasions where the burden of proof falls on the defendant, for example, contributory negligence, where the defendant must prove that the claimant’s failure to take care contributed to the damage suffered.
What is the standard of proof in civil cases?
In civil cases, the claimant is required to prove a fact on the balance of probabilities. This requires the judge to be persuaded that the claimant’s version of events is more likely to be true than the defendant’s. In simple terms, there must be a certainty of greater than 50 per cent.
What is the general rule with regards to evidence at trial?
The general rule is that any fact upon which a party intends to rely must be proved at trial by oral evidence. However, this rule is modified in practice as much of the evidence in a civil litigation case is actually dealt with in writing.
Under Part 32, if a party wishes to call a witness, they must serve a witness statement on the other parties setting out all the facts which that witness would be allowed to give orally at trial.
Inadmissible or irrelevant material should not, therefore, be included. If the statement is not served for any reason, the witness will only be allowed to speak at trial with the court’s permission and this would be a rare occurrence.
What happens if a witness statement cannot be obtained from a witness?
Sometimes it will be very difficult to obtain a witness statement, perhaps because the person is uncontactable abroad, or to persuade a witness to give a statement (for example, it will be against their current employer and they fear being dismissed). In these circumstances, the party can apply to the court without notice for an order to serve a written witness summary.
This will contain:
* the witness’s name and address;
* the evidence the witness can provide, if it is known; or if not
* the matters on which the witness would be questioned at trial, namely, the relevant disputed issues.
Witness summaries are less satisfactory to the party than a statement but they may be useful where the alternative is no evidence at all.
What is the form and content of a witness statement?
Rules relating to the form of witness statements are set out in the Practice Direction attached to CPR 32, and they list the formalities required for the statement to be valid.
It is important that these are complied with as a failure to do so may result in the court refusing to admit the witness statement as evidence.
The statement should be headed with the title of the proceedings and details such as the name of the witness, the number of the statement and the date in the top right hand corner.
In the opening paragraph should be the witness’s address, their occupation or
description, whether the statement is made as part of their employment or business and,
if so, the name of the business and whether they are a party to the proceedings.
(c) The paragraphs must be numbered with all numbers, including dates, being expressed
as figures and not words, thus, ‘five people’ should read ‘5 people’. The format for dates
would be, for example, 16 January 2022 and not 16.01.2022.
(d) The statement should normally follow the chronological sequence of the events.
(e) The function of the witness statement is to set out in writing the evidence that the individual wants to provide on behalf of the party that called them. Historically, such evidence was given orally at the trial but now, to save time, the witness statement usually replaces this.
(f) Consequently, it should be written in the first person and expressed in the witness’s own words as far as possible.
(g) The witness must also indicate which of the statements are made from their own knowledge and which are based on information and belief, naming the source if appropriate. Also, the process by which the witness statement was prepared must be included, for example, face to face or over the telephone with a party’s solicitor.
(h) Any documents that are attached are formally exhibited, for example, ‘AP1’.
(i) Under PD 32 para 20.2, it must be verified by a statement of truth in the format: ‘I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth’.
Unlike statements of case, a witness statement cannot be signed by a legal representative.
There are special provisions that apply where the statement cannot be given in English. In such cases, the statement should be drafted in the witness’s own language with the date and the details of the translation being included in the statement.
Can a witness statement be signed by a legal representative?
Unlike statements of case, a witness statement cannot be signed by a legal representative.
When will witness statements be exchanged?
Once the case has been allocated to a track, the court will give directions as to when and how witness statements are to be exchanged and this is usually completed simultaneously.
The reason is to prevent one party having an advantage over the other by seeing their opponent’s witness statement first.
In most cases, the statements will be exchanged a few weeks after disclosure and inspection of the documents, although the interval will vary depending upon the complexity of the matter.
This allows the witness an opportunity to review their evidence after having taken into account any documents that have been inspected.
How will the witness statements be used at trial?
Having served a witness statement on the other side, the witness will usually be called to give oral evidence at trial.
Before the hearing, the judge will have read all the witness statements that were exchanged. These form part of the trial bundle.
The witness will go into the witness box, take the oath or affirm, be shown a copy of their statement and confirm the contents are true. It is then assumed that the witness has said, from the witness box, everything in their statement and so this stands as their evidence- (or examination- )in- chief.
Unless the court gives permission for additional examination- in- chief, they will then be subject to questioning by the other side’s advocate – known as cross- examination.
It is essential that the statement is comprehensive because a witness cannot add to it at the trial unless the court gives permission, and this will be the exception rather than the rule. Such an event will only occur if the judge is satisfied there is a good reason why the evidence was
not dealt with in the statement itself – perhaps because it needs to be amplified or a new relevant matter arose after the statement was served.
What are affidavits and how do they differ from witness statements?
Affidavits are sworn statements of evidence and they differ from witness statements as the maker has to swear or affirm before a solicitor (not their own), or other authorised person, that the contents of the affidavit are true.
Prior to the CPR, affidavits were the usual means of submitting evidence but they have been replaced in this role by witness statements.
There are now only a few occasions where it is necessary to use an affidavit, including applications for a freezing injunction or a search order.
When drafting witness statements or affidavits, what are the rules of evidence and how does this apply to civil proceedings?
The starting point is that any evidence included must be relevant. On a practical level, there is little point in the witness setting out vast amounts of irrelevant material as this will not assist in deciding the case and will simply prolong the trial unnecessarily.
Irrelevant material is not admissible. Relevance is judged by reference to the issues the court is called upon to decide.
When is evidence relevant?
Evidence from a witness of fact is admissible when it addresses relevant facts, namely those which are in dispute and which have to be proved by the party calling the witness.
These should be apparent from comparing the particulars of claim with the defence – the facts not admitted and denied are in dispute.
What is the general rule on opinion evidence?
The general rule is that opinion evidence is not admissible because the function of a witness is to give evidence of relevant facts from which the court can draw its own conclusions.
However, there are some situations where it is difficult for a witness to separate fact and opinion.
When may opinion evidence be admissible?
It may be admissible when facts are personally perceived.
Under s 3(2) of the Civil Evidence Act 1972, a witness may give a statement of opinion if made as a way of conveying relevant facts personally perceived by them. If this test is satisfied, the evidence is admissible.
Strictly speaking, rather than stating their opinion, the witness should list the facts that they saw which led them to reach their conclusion. However, if they fail to do so, even though the accuracy of the witness’s assessment of the speed or the level of intoxication might be challenged, the evidence would usually be admissible.
What the witness cannot do is to draw any conclusion from their evidence as this is the role of the court. So, for example, the witness to the road traffic collision cannot say in evidence that (in their opinion) the defendant’s speed was ‘excessive in the circumstances’ or ‘too fast’ because it is for the trial judge alone to determine if the defendant was driving negligently.
Experts are able to express their opinions in court.
What is hearsay evidence?
a) a statement made outside court;
b) which is repeated in court;
c) to prove the truth of the matter stated.
The statement must be a relevant fact or an admissible opinion. It can be oral or written and may be repeated in court in a document or by the witness whether in their witness statement or in oral evidence.
The crucial aspect that determines whether such statements are hearsay is the purpose – the reason is to prove the truth of the words said. In other words, the trial judge is being asked to rely on the repetition of the words (the evidence) to reach a decision in the case.
Hearsay evidence may either be first hand or multiple.
How is hearsay evidence used in civil proceedings?
Section 1(1) of the Civil Evidence Act 1995 provides that hearsay evidence is admissible in civil proceedings. However, there are notice requirements under s 2 and further details are contained in CPR Part 33.
- If the party intends to call the witness whose statement contains hearsay evidence, they simply need to serve the other party with the statement.
The opponent must then decide whether to ask the court to order that the maker of the original statement attends for cross- examination or serve notice of intention to attack the credibility of the hearsay evidence.
If the party does not propose to call the witness to give oral evidence but instead intends to rely upon the witness statement itself, the whole statement becomes hearsay. This obviously limits the opponent’s options as they cannot cross- examine the witness and so they must be given advance warning of the situation.
How is the other party given notice of the adduction of hearsay evidence?
When serving the witness statement, it is essential that the party intending to rely on the hearsay evidence informs the other parties that the witness is not being called to give oral evidence and explains the reason why. This is done by way of a hearsay notice, which should be served at the same time as the witness statement.
What happens if the party adducing hearsay does not comply with the notice requirements?
If a party does not comply with the notice requirements, the hearsay is still admissible but the failure may be taken into account when assessing the weight to be given to it, or when making a costs order at the end of the trial.
How much weight should be attached to hearsay evidence?
Although hearsay evidence is admissible, it is important to remember that it is ‘second best’ evidence of a fact. Out- of- court statements are not made on oath or with any form of affirmation. It is not uncommon for a person to lie, or to make ill- considered statements that are inaccurate.
Furthermore, the greater the number of times a statement is repeated, the more likely there is to be an error.
Because the maker of the hearsay statement is not present at the hearing, they cannot be cross- examined. As a consequence, their memory or powers of observation cannot be challenged and the trial judge is unable to assess the reliability of the statement by observing the witness’s demeanour.
So how does the court approach the issue of hearsay? The judge will begin by considering these questions:
(a) What issue, if any, does the hearsay evidence address?
(b) How important is that issue in the case?
(c) What other evidence is available on the same issue?
(d) Is the hearsay evidence more probative than any other evidence the party could obtain through reasonable efforts?
What are the statutory safeguards that will be considered by the judge when assessing how much weight to give to the hearsay evidence?
There are also statutory safeguards, which may be found in s 4 of the Civil Evidence Act 1995. These provide guidelines to assist the judge in assessing the weight that should be attached to hearsay evidence. It provides that the court must have regard to all the circumstances and,
in particular, to the following:
(a) Whether it would have been reasonable and practicable for the party adducing the evidence to have called the person who made the original statement as a witness. Only if the reason is a credible one, such as the person being dead or abroad and not contactable, is the statement likely be given some weight; otherwise, why not call the person to give oral evidence?
(b) Whether the original statement was made contemporaneously with the events in question, so that the facts referred to in it are fresh in the memory of the person making it. A note made of a car registration number immediately after the car drives off will generally be more reliable than one made the next day, week or month.
(c) Whether the evidence involves multiple hearsay as there is always the danger of mishearing, exaggeration and general inaccuracy through repetition.
(d) Whether any person involved had any motive to conceal or misrepresent matters, for example an employee who makes the statement with a view to pleasing their employer.
(e) Whether the original statement was edited, or was made in collaboration with someone else, as this may suggest collusion, for instance.
(f) Whether the circumstances suggest an attempt to prevent proper evaluation of the weight of the evidence, perhaps because notice was given so late that the other party did not
have a fair opportunity to respond to it.
What is expert evidence?
Expert evidence is often crucial to the outcome of civil proceedings and its use is governed by Part 35. Such evidence may be required to establish the breach of contract, perhaps a surveyor in a case involving defective building work; or damages, for example an accountant to prove loss of profits.
However, the parties do not have an unlimited right to use expert evidence and, as part of its case management powers, the court will restrict such evidence to that which is reasonably
required to resolve the issues.
This may include:
* refusing to allow any expert evidence at all;
* limiting the number of experts either generally or in relation to specific issues;
* directing that the parties must agree experts; or
* limiting expert evidence to written reports.
Can a party call expert evidence without obtaining permission?
No party may call an expert without obtaining permission. This will usually be considered
at the directions stage, either when the case is allocated to the fast track or at a case management conference on the multi- track.
What factors will the court take into account to satisfy themselves that the expert evidence is necessary?
The court will need to be satisfied that expert evidence is necessary to decide an issue in dispute or to assist the judge in doing so. Factors taken into account will include the value of the claim and proportionality, and the likely costs.
The judge will also require information on:
* the name of the expert where practicable;
* the field the person is an expert in;
* their knowledge and experience to ensure they are suitable to give their evidence; and
* the issues the expert will address.
Expert evidence is often crucial to the outcome of the case and so it is in the parties’ interests
to comply with the CPR in this regard.
What expert evidence will be allowed on the intermediate track?
Expert evidence is more restricted on the intermediate track as oral expert evidence at trial is likely to be limited to one witness per party, except where a second expert is reasonably required and proportionate. Any expert report must not exceed 20 pages as stated above.
What is the expert’s duty in relation to expert evidence?
The expert’s duty is set out in Part 35.
The duty is to assist the court by providing objective, unbiased opinions on matters within their own expertise. Although in many cases an expert is instructed by one particular party, the duty to the court overrides any obligation to the person who instructed them.
The duty is not to assume the role of an advocate. However, this does not mean that an expert has no duty to the party who instructed them; for example, they will be subject to the usual implied term to exercise reasonable care and skill under s 13 of the Supply of Goods and Services Act 1982 when considering and drafting their report.
What is a single joint expert?
Where both parties wish to submit expert evidence on a particular issue, the court may direct that the evidence is given by one expert only.
When is a single joint expert appropriate?
The court will decide if an SJE is appropriate by considering a number of factors including whether:
(a) it is proportionate to have separate experts for each party on a particular issue;
(b) the instruction of an SJE is likely to assist in resolving the issue more speedily and in a more cost- effective way; and
(c) there is likely to be a range of expert opinion.
Who chooses the single joint expert?
If agreement cannot be reached on who this will be, the court will select the expert from a list prepared by the parties.
On the fast track, the usual order is for an SJE to be appointed unless there is a good reason not to do so, rather than allowing each party to instruct their own. Where an expert is jointly instructed, they will send their report simultaneously to both parties with the costs being shared. Furthermore, in fast track cases, such evidence will normally be given by means of written reports and the experts will not be permitted to give oral evidence at the trial.
When is an SJE appropriate?
The court will decide if an SJE is appropriate by considering a number of factors including
whether:
(a) it is proportionate to have separate experts for each party on a particular issue;
(b) the instruction of an SJE is likely to assist in resolving the issue more speedily and in a
more cost- effective way; and
(c) there is likely to be a range of expert opinion.
Who chooses the expert?
If agreement cannot be reached on who this will be, the court will select the expert from
a list prepared by the parties.
On the fast track, the usual order is for an SJE to be appointed unless there is a good reason
not to do so, rather than allowing each party to instruct their own. Where an expert is jointly
instructed, they will send their report simultaneously to both parties with the costs being
shared. Furthermore, in fast track cases, such evidence will normally be given by means of
written reports and the experts will not be permitted to give oral evidence at the trial.
When is it more likely for separate experts to be instructed?
In contrast, for multi- track cases, it is more common for the parties to instruct their own experts.
Factors taken into account are the amount in dispute, the importance to the parties and the complexity of the issue.
If separate experts are ordered, what directions will the court make?
If separate experts are ordered, the court will also make further directions in an effort to streamline the trial as much as possible by narrowing down the issues the experts need to comment upon.
These include the following:
* Exchange: a deadline will be imposed for exchange of the experts’ reports.
* Questions: each party may, within 28 days, put written questions to the expert for clarification of their report. The expert’s answers are treated as part of the report.
* Discussion: the court may order a without prejudice discussion between the experts, usually in the absence of the parties or their legal representatives, and the contents will not be referred to at trial unless the parties agree. The purpose of the discussion is not to settle the case but to narrow down the issues and to identify:
∘ the extent of any agreement between them;
∘ the points of and short reasons for any disagreement;
∘ what action, if any, may be taken to resolve these; and
∘ any further material issues not yet raised and the extent to which these are agreed.
* Written joint statement: following the discussion, a written joint statement must be prepared for the court and signed by the experts stating the issues on which they agree and those on which they disagree with a summary of the reasons. Copies should be provided to the parties.
Oral evidence: the judge will decide whether the expert may give oral evidence at trial. Although there is a presumption that the court will rely upon written reports, it is common on the multi- track for experts to be called to give evidence.
What form will the expert evidence take?
Detailed instructions for the form and content of an expert’s report are to be found in Part 35. As far as the content is concerned, this will vary from a few pages to a lengthy document depending upon the complexity of the case.
Regardless of this, the formalities must be complied with and an expert’s report must:
(a) be addressed to the court;
(b) give details of the expert’s qualifications;
(c) give details of any literature or other material that the expert has relied on;
(d) contain a statement setting out the substance of all facts and instructions;
(e) say who carried out any examinations, measurements, tests or experiments, their qualifications and whether the expert supervised;
(f) where there is a range of opinion, summarise this and give reasons for the expert’s own opinion;
(g) include a summary of the conclusions reached; and
(h) contain a statement that the expert understands their duty to the court and has complied with this, and is aware of the requirements of Part 35 and related guidance.
What statement of truth is used to verify an expert report?
The report must also be verified by a statement of truth as follows:
I confirm that I have made clear which facts and matters referred to in this report are within my own knowledge and which are not. Those that are within my own knowledge I confirm to be true. The opinions I have expressed represent my true and complete professional opinions on the matters to which they refer.
What is the consequence of an expert failing to comply with Part 35?
If the breach is serious, the party may not be allowed to rely on that expert’s evidence, but in most cases, the judge will simply take account of the breach when deciding what weight should be given to the expert evidence.
What professional conduct issues may arise when an expert drafts a report?
When drafting the report, the expert must set out all the instructions, whether written or oral, which are material to the opinions expressed or upon which their opinions are based. This is to ensure that the report is not influenced in any way. For example, a surveyor who is instructed to value a property on the basis of a quick sale may well arrive at a different figure than if asked to provide an optimal valuation.
Legal representatives should, therefore, be aware that their instructions are not privileged from inspection and could be scrutinised by the court should the court find reasonable grounds to consider the statement of instructions to be inaccurate or incomplete.
What is the procedure for witnesses attending at trial?
Most witnesses will attend the trial voluntarily – after all, they have already co- operated by providing a witness statement. To ensure there are no issues on the day, witnesses should:
* be asked, at an early stage, if there are any dates when they cannot attend; and
* be notified of the trial date without delay.
Details of a witness’s availability must be given to the court on the directions questionnaire (thus, early in the proceedings) and also in the pre- trial checklists as the case approaches the final hearing.
The aim is to ensure that the trial, should it prove necessary, is not delayed for any reason.
When will a witness summons be used?
Even where witnesses have been kept fully informed and involved, if there is any doubt about whether a witness will attend voluntarily, the matter should not be left to chance and a witness summons should be sought. This is a document issued by the court requiring a witness to:
* attend court to give evidence; and/ or
* produce documents to the court.
A witness summons should be served at least seven days before the date on which the witness is required to attend court; otherwise, the court’s permission is required. It is binding and if they fail to appear, the witness may be fined or even, in High Court proceedings, imprisoned for contempt.
The summons will normally be served by the court and, to be effective, the witness must be offered or paid:
(a) a sum reasonably sufficient to cover their expenses in travelling to and from the court; and
(b) compensation for loss of time as specified in Part 34.
The advantage of serving a summons is that the judge is more likely to be sympathetic to an adjournment of the trial should the witness fail to attend. However, it would be unusual to witness summons an expert as they are required to keep those instructing them informed of their availability.
How should a solicitor/barrister prepare for trial?
If counsel is representing the client, it is important that they are briefed in plenty of time for the hearing to ensure they are fully prepared. In more complex cases, a conference may be held so that any potential problems can be discussed and removed. In addition, before the trial, all the steps required by the CPR must be completed and any court orders or directions complied with.
What pre-trial checks need to be complied with?
As the parties approach the trial, there will be a flurry of activity to make sure the hearing can proceed smoothly to avoid a costly adjournment.
On the fast and multi- tracks, pre- trial checklists (also known as listing questionnaires) play a vital role in this and must be completed fully by the parties.
* Purpose: to ensure the parties have complied with all the directions and the trial is ready to proceed.
* Timing: the completed pre- trial checklist must be filed at court no later than eight weeks before the trial date.
* Role: the judge will review the checklists to decide whether further directions are needed and whether a review hearing is necessary before the trial. This is referred to as a listing hearing on the fast track and a pre- trial review on the multi- track.
Failure to comply: if neither party comply, the court will order that unless a completed checklist is filed within seven days, the claim, defence and counterclaim will be struck out; if only one party does, the court will fix a hearing to ensure the case is ready for the trial.
In heavy cases, generally those where the trial is likely to last longer than 10 days, the trial judge may order a pre- trial review to personally check the progress of the matter. The parties’ representatives are expected to attend to assist in ironing out any last minute glitches before the case is listed, so the court’s resources are not wasted. To ensure that decisions can be made, the representative must be familiar with the case and have the authority to deal with any issues that may arise.
After these steps have occurred, the court will:
(a) give a time estimate and set a timetable for the trial if deemed necessary;
(b) fix the place of trial; and
(c) confirm the actual date of the trial or state the week within which it will begin.
Thereafter, the court will order that a trial bundle of documents be prepared.
What is included in the trial bundle?
A trial bundle is a file of all the documents the judge may need to decide the case. It is indexed and paginated for ease of reference so that the documents can be accessed quickly by all those involved, thus promoting the efficient use of the court’s resources. To ensure the bundle is not too unwieldly, case law suggests that, generally, it should be no longer than 250 pages in length.
How are trial bundles dealt with in practice?
Who: the claimant or (if they are legally represented) the lawyer who has the conduct of the claim on their behalf will usually prepare the bundle but the contents should be agreed wherever possible.
When: the bundle must be filed between seven and three days before the start of the trial.
- What: the trial bundle should include the key documents, for example:
∘ the claim form and all statements of case;
∘ a case summary and/ or chronology where appropriate;
∘ requests for further information and responses;
∘ witness statements;
∘ notices of intention to rely on hearsay evidence;
∘ experts’ reports and responses;
∘ directions orders; and
∘ any other necessary documents containing evidence that a party intends to rely on.
The party filing the trial bundle should supply identical copies to all other parties to the proceedings and for use by the witnesses.
When will a case summary be needed?
In multi- track cases, each party should prepare a case summary for use at trial. This is designed to assist both the court and the parties by indicating what points are still in issue, and the nature of the argument about the disputed matters.
The case summary will (concisely):
(a) review the party’s submissions of fact in relation to each of the issues with reference to the evidence;
(b) set out any propositions of law to be relied upon; and
(c) identify any key documents that the trial judge should, if possible, read before the trial starts.
What should lawyers be aware of during trial?
(a) Court room etiquette. Although advocates remain seated for hearings in chambers or before district judges, they should stand when speaking in open court. Witnesses should be addressed by their title and surname, for example, Mrs Rees, but children are called by their first name. Mobile phones should be switched off or on silent and food should not be consumed in court.
(b) Modes of address. When appearing in court, the correct mode of address must be used. If the wrong one is used, although many judges will not object or will correct gently, some do mind and will make this clear.
(c) The difference between leading and non-leading questions. Non-leading questions are those that facilitate a witness in ‘telling their story’.
They are also referred to as ‘open’ questions and will usually start with the words ‘who, what, where, when and how’ to allow the witness to explain their version of events.
An example would be, ‘What was said in the telephone conversation between you and Miss Usher?’, if the dispute centred around what oral terms were agreed in a contract. In a civil trial, the witnesses do not set out their evidence orally in court but will rely upon their witness statements.
Thus, in contrast to a criminal trial, non-leading questions will be less common.
Leading or ‘closed’ questions suggest the answer and often invite a response of ‘yes’ or ‘no’. They are used in cross-examination and the aim of the advocate is to keep control of the witness as far as possible, for example, ‘You didn’t make a note of the telephone conversation did you, Miss Usher?’
In the county court, how should a circuit judge be addressed?
Your honour
In the county court, how should a district judge be addressed?
Judge
In the high court, how should a judge be addressed?
My lord/lady
In the high court, how should a district judge be addressed?
Judge
In the court of appeal, how should a lord justice be addressed?
My lord/lady
In the supreme court, how should a supreme court justice be addressed?
My lord/lady
How will outstanding issues by addressed before the trial starts?
Any outstanding issues will be addressed before the trial starts. Although this could include substantive law, more frequently it will involve points of procedure such as requesting permission to amend a statement of case or to adduce additional evidence. However, generally, these matters will have been dealt with earlier in the proceedings.
What is a usual trial timetable?
a) Preliminary issues
Any outstanding issues will be addressed before the trial starts. Although this could include substantive law, more frequently it will involve points of procedure such as requesting permission to amend a statement of case or to adduce additional evidence. However, generally, these matters will have been dealt with earlier in the proceedings.
b) Opening speeches
If permitted by the judge, the claimant may make an opening speech setting out (briefly) the background to the case and the facts that remain in issue.
c) Examination- in- chief
Normally, the claimant and their witnesses of fact will be called first. Because their statement stands as their evidence- in- chief, the witness will usually just be asked to take the oath or affirm, identify their witness statement in the trial bundle and confirm it is true. Every word in the statement is then treated as having been said by the witness in evidence.
Only if they need to amplify their statement (perhaps to clarify a point) or to give evidence in relation to new matters that have arisen since, will the witness say any more. Even then, the permission of the judge must be obtained. In the event that additional evidence is allowed, the advocate cannot lead on matters in dispute between the parties and should only ask open questions, such as: ‘What did you see?’ ‘What happened next?’
Expert evidence will be given as previously directed by the court – either written reports or by way of oral evidence. Traditionally, the claimant’s expert will go first, but the court has the power to make alternative orders such as that the parties’ experts give evidence simultaneously on an issue by issue basis.
d) Cross- examination
Next, the witness will be cross- examined by the opponent’s advocate. The purpose is to put their own client’s case and whilst, rather optimistically, this may extract favourable evidence, this is not the main reason. In most instances, the witness will not change their story but cross- examining them ensures there is no implied acceptance of that evidence. The advocate will also seek to discredit the witness by highlighting inconsistencies or gaps in their evidence, so they appear less believable.
At this stage, there are fewer constraints on the advocate, who may ask leading or closed questions to keep control of the witness. Such a question is one which suggests the answer, for example: ‘When the defendant supplied the goods, they did not match the sample, did they?’
Often the response is limited to either yes or no, thus discouraging the witness from expanding their answer to re- emphasise their own case.
e) Re-examination
If necessary, the witness may be re- examined by their own advocate. However, this can only relate to matters that have been raised by the cross- examination and the lawyer should consider carefully whether doing so would actually improve the situation. As with examination- in- chief, only open questions may be put to the witness.
f) Closing speeches
After the evidence has been given, the defence advocate will usually make a closing speech followed by the claimant’s advocate. The aim is to summarise the law and the facts in the most favourable light to convince the judge of the validity of their case.
g) Judgment
The judge will either deliver their judgment immediately or (if the case is complex) reserve judgment to a later date. The judgment will take effect on the day it is made unless the order specifies a different date.
The effect of the judgment is to bring the main proceedings to a conclusion. The judge will begin by determining liability, specifically whether the claimant has established their cause of action, for example breach of contract or negligence, before going on to review the evidence and to provide reasons for their decision.
If the defendant has won, this will be the end of the substantive proceedings. However, if the claimant has been successful, the court will need to consider what remedies to grant and this will usually be the payment of a sum of money (quantum). In a specified claim, the total will be calculated, whereas in an unspecified claim the judge will consider each category of damage that the party is claiming in turn. The judge will also rule on whether interest will be paid, the rate and for what period.
Finally, there is the question of costs. The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, although the court may make a different order. At the end of a fast track trial, the judge will also summarily assess the amount payable. In contrast, at the conclusion of a multi- track trial, the judge will only determine who should pay costs and the amount will be determined at a later hearing (known as a detailed assessment), unless agreement can be reached between the parties.
Once the judgment has been made, what happens next? If the claimant has succeeded at trial, they have the right to recover the monies awarded including costs and interest and, if not paid, enforcement action may be taken. In contrast, if the defendant has won, the only outstanding issue will be the payment of any costs awarded. Where the court orders the payment of an amount of money (including costs), this must be paid within 14 days unless the order specifies otherwise.
What happens if a witness who has been called is hostile?
An unfavourable witness does so for entirely proper reasons – perhaps they have genuinely forgotten a fact or now interpret the situation in a different way. This is always a risk given the inherent unpredictability of trials and has to be accepted by the party calling them.
In contrast, a hostile witness fails to come up to proof because they are unwilling to support the party who called them. They may refuse to answer or tell lies so their evidence now differs from what is in their statement. In this instance, the party calling the person may ask the judge to declare them a hostile witness. The effect is that the advocate may now attack the witness’s credibility or cross- examine them as if they were a witness for the other side. Clearly, this is not ideal but is a useful way of limiting the damage the witness is inflicting on the party’s case.
When will permission to appeal be granted/what are the grounds for appeal?
For first appeals, permission will be given only where the court considers that the appeal:
a) has a real prospect of success or
b) there is some other compelling reason why it should be heard.
There has to be a realistic, as opposed to a fanciful, prospect of success. A compelling reason why the appeal should be heard could be, for example, if there is an important question of law or general policy at stake that requires consideration by the higher courts. If the appeal is to the Court of Appeal or the Supreme Court, the case must also raise an important point of principle or practice.
What are grounds for permission to appeal?
Second appeals are much rarer and permission is required from the Court of Appeal itself
before the judges will hear the case. The grounds are as above.
What is the procedure for obtaining permission to appeal?
There is no right to appeal and the procedure for obtaining permission is governed by CPR Part 52.
- In most cases, the request will be made at the end of the trial and the judge will decide whether to grant permission.
- If the request is unsuccessful, or none is made, then the party can apply for permission from the appeal court itself. The appeal court will usually deal with such a request on paper, without a hearing. However, in the Court of Appeal, the judge must list the matter for an oral hearing no later than 14 days after the relevant direction if they decide that the application cannot be fairly determined without the presence of the parties.
The requirement to obtain permission acts as a deterrent to those litigants who refuse to accept a court’s decision.
What are the deadlines for appeal?
The aggrieved party has 21 days to appeal against a County Court or High Court decision; and 28 days to apply for leave to appeal from the Court of Appeal to the Supreme Court.
What is the destination for an appeal?
The appeal will normally lie to the next court up. However, the route of appeal depends on:
* the court from whose decision the appeal is brought (‘the lower court’); and
* who made the decision.
In the civil courts, matters are decided by different levels of judge and this impacts upon the appeals process. In the High Court, the case may be heard either by a High Court judge, a master or a district judge. If the decision is made by a High Court judge, the route is straightforward as the matter must be appealed to the Court of Appeal. However, if the judge is of lesser seniority, the appeal goes up the next rung of the ladder to a High Court judge. In the County Court, cases may be decided by circuit judges or district judges. If the former, the appeal is to a High Court judge; if the latter, to a circuit judge.
If a decision is made by the district judge of the County Court where will the appeal be made to?
Circuit judge of the County Court
If a decision is made by a master or district judge of the High Court where will the appeal be made to?
High Court judge
If a decision is made by a Circuit judge where will the appeal be made to?
High Court judge
If a decision is made by a High Court judge where will the appeal be made to?
Court of Appeal
From the Court of Appeal, a further appeal would lie to the Supreme Court but, generally, the decision of the appellate court will be the final decision and very few cases will reach the highest courts. This is because judges of the quality of Lords Justices of Appeal are a scarce and valuable resource, and it is important that they are used effectively and only on work that is appropriate to them.
What is a leapfrog appeal?
A leapfrog appeal is one that is heard by a higher appellate court than usual. Appeals that would normally take place in the County or High Court will jump over these to the Court of Appeal; whereas for appeals that would ordinarily be dealt with in the Court of Appeal, the destination of the appeal would be the Supreme Court.
It is only on rare occasions that the court has the power to order that the appeal be transferred straight to the Court of Appeal. Permission may be granted where the matter raises an important point of principle or practice, or there is some other compelling reason why the Court of Appeal should hear it.
It is also possible (although very unusual) for cases to proceed straight from the High Court to the Supreme Court should the issue be deemed of sufficient importance. Leapfrog appeals only occur in exceptional circumstances, usually related to the urgency of the matter.
What is the procedure for a leapfrog appeal?
There are two stages in the process:
(a) the grant of a leapfrog certificate by the trial judge; and
(b) the grant of permission to appeal by the Supreme Court.
When will permission for a leapfrog appeal be granted?
Such appeals arise where the case involves a point of law of general public importance concerning, for example, the construction of a statute or statutory instrument; or a matter of national importance.
On what basis may an appeal court grant an appeal?
The appellant will have to persuade the appeal court that the decision of the lower court was either:
(a) wrong (as to law, interpretation of facts or exercise of discretion); or
(b) unjust because of a serious procedural irregularity in the proceedings of the lower court.
When will costs be considered?
Costs are an important aspect of litigation and should be considered throughout. The amount the case is likely to cost and the probability of recovering costs from the opponent will be crucial factors in a client’s decision as to whether to issue proceedings at all. As the matter progresses, there may be interim hearings at the end of which costs orders will be made. Then, at the conclusion of the trial, the judge will determine which party is to be responsible for paying the outstanding costs.
Because either the claimant or the defendant may be ordered to pay costs, the successful party is referred to as ‘the receiving party’ and they are entitled to payment of their costs from the unsuccessful one – ‘the paying party’.
What does the term costs includes?
The term ‘costs’ includes solicitor’s charges, disbursements such as court fees, expert’s fees and even pre- action costs.
Provisions relating to costs may be found in CPR Part 44 and the general rule is that the unsuccessful party pays the successful party’s costs.
However, this is only the starting point and the judge has discretion to make different costs orders if deemed appropriate.
How are costs and budgeting managed throughout the case?
Costs will be an issue throughout the case from the moment when the solicitor is first instructed until its conclusion whether by settlement or at trial. The court becomes involved at an early stage, particularly in multi- track cases. Before the case management conference is heard, the parties must file a costs budget setting out the costs incurred to date and those anticipated for the future. The court may also impose a costs management order giving greater control over costs.
What is the effect of a costs management order on the multi-track?
- A party awarded its costs on the standard basis at trial will normally recover the amount of its last approved or agreed budgeted costs.
- On the standard basis, the court may depart from the budgeted costs only if persuaded there is a good reason to do so, for example where the costs of a phase were:
∘ not incurred at all; or
∘ much less than budgeted. - Costs awarded on the indemnity basis and incurred costs will be assessed by the court in the usual way, unless agreed.
Even if such an order is not made, the court will have regard to any costs budgets when assessing costs.
What is the procedure for determining costs?
How costs are dealt with varies depending upon the track to which the claim has been allocated.
* Small claims track: legal costs are not recoverable and so the costs payable will only relate to disbursements.
* Fast track: the costs will usually be summarily assessed.
* Multi- track: a detailed assessment of the costs will be carried out.
However, although these are the general rules, the situation with regard to costs is often more complex.
What are fixed costs?
In certain situations, the CPR fix the amount of costs the party may recover from their opponent.
This is entirely separate from the arrangement between the party and their own lawyers, which is governed by contract.
The advantage to a litigant of fixed recoverable costs is that they know in advance how much will have to be paid to the other party should they lose the case. However, fixed costs are less attractive to the successful party as they are extremely unlikely to recover all their costs and will often have to pay the shortfall to their own solicitor.
Fixed costs cover various steps in the proceedings. For example, a claimant who applies for default judgment will usually only be able to claim the costs that are fixed by Part 45 of the CPR, whatever sums they have actually spent so far. Most of the costs incurred in enforcing a judgment are also fixed. However, in some instances such as an application for summary judgment, it may be possible for the parties to agree a higher sum to offset the harshness of this rule and, in these circumstances, the judge will usually concur.
Fixed recoverable costs now apply to all cases on the fast track and the new intermediate track, with the aim of reducing the level of costs, providing certainty in the amount and simplifying the process.
When a claim is allocated to the fast or intermediate track, the court must also assign it to a complexity band. This will determine the amount of costs that can be recovered; effectively, how much lawyers will get paid. The bands set out an ascending scale of fixed recoverable costs which increase as the complexity does. In general, the higher the band of claim and the later that settlement is reached or the closer to trial, the higher the costs payable by the loser to the winner.
Although parties can make applications for costs greater than the fixed recoverable costs, these would be ordered only in ‘exceptional circumstances’. Likewise, a party’s fixed recoverable costs may be increased as the paying party or decreased as the receiving party by 50% for ‘unreasonable conduct’.
The effect is that those cases affected will not require any costs budget in advance of trial, nor any costs assessments afterwards. Instead, the party need only select the assigned complexity band and read down to the ‘stage’ at which the case ends in order to identify the relevant costs liability (net of VAT, disbursements and court fees).
If costs are not fixed, which process applies when determining costs?
Summary assessment.
What is summary assessment?
If costs are not fixed, a different process applies. Summary assessment involves the court determining the amount that is payable immediately, at the end of the hearing. The general rule is the court should, unless there is a good reason not to do so, make a summary assessment of the costs:
(a) at the conclusion of a fast track trial; and
(b) at any other hearing that has not lasted more than one day.
To assist the court, the parties must file and serve a statement of costs – a detailed breakdown of their costs – no less than two days before a fast track trial and at least 24 hours before an interim hearing. As with any aspect of litigation, there are risks inherent in allowing a judge to determine the issue and so the parties should seek to agree costs if at all possible.
What is detailed assessment?
If the court cannot make a summary assessment of costs – usually because there is insufficient time – an order will be made for the detailed assessment of those costs. In the multi- track,
costs will generally be dealt with in this way.
Within three months of the date of the judgment or order, the receiving party must serve on the paying party a Notice of Commencement of detailed assessment proceedings together with their bill of costs and evidence in support, such as receipts.
If the paying party wishes to challenge the bill, the following steps occur:
(a) The paying party has 21 days to serve points of dispute.
(b) The receiving party has 21 days to file a reply.
(c) The receiving party must then file a request for an assessment hearing within three months of the expiry of the period for commencing detailed assessment proceedings.
(d) If the costs claimed are less than £75,000, the court undertakes a provisional assessment where the judge decides what costs are allowable in the absence of the parties.
(e) If either party is unhappy with the provisional assessment, they may request an oral hearing within 21 days; but if the party fails to achieve an adjustment in their favour by at least 20% they will be ordered to pay the costs of the hearing. This is to discourage parties from trying their luck at reducing the costs without being confident of success.
Given the robust attitude taken by judges in determining what costs are appropriate, it is preferable to avoid this procedure by agreeing costs.
How is a final order as to costs reached?
Once settlement has been reached or the court has given its judgment at trial, the question of costs will arise. There are two issues to consider, namely who pays and how much. As to the first question, the usual rule is that the loser pays the winner’s costs. However, establishing the amount of costs that should be paid tends to lead to more discussion or even dispute.
What factors will the court consider when assessing the amount of costs?
To assist the judge, CPR, r 44.4 sets out factors that the court should take into account in
deciding the amount of costs the receiving party is entitled to.
These are:
(a) the conduct of the parties and the efforts made to try and resolve the dispute;
(b) the value of any money or property involved;
(c) the importance of the matter to the parties;
(d) the complexity of the matter;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case;
(g) the place and circumstances in which the work was done; and
(h) the receiving party’s last approved or agreed budget.
Looking at these will ensure that each case receives a full consideration of the issues.
However, before going into the detail of the costs, the judge must first check on what basis they were ordered – either on the standard or the indemnity basis.
Standard basis :
The standard basis will apply in most cases and costs awarded on this basis must be proportionate to the matters in issue. The CPR provide that total costs will be proportionate if they bear a reasonable relationship to the sums in issue, the value of any non- monetary relief in issue, the complexity of the litigation, any additional work generated by the conduct of the paying party and any wider factors.
If there is any doubt, it will be resolved in favour of the paying party.
The effect is that costs that are disproportionate may be disallowed or reduced even if they were reasonably incurred and reasonable in amount.
Indemnity basis :
Costs on the indemnity basis are awarded as a penalty, usually to reflect the court’s displeasure with the manner in which a party has behaved either pre- action and/ or during proceedings. Costs on this basis must be:
(a) reasonably incurred; and
(b) reasonable in amount.
Any benefit of the doubt is given to the receiving party.
What is the approach to determining costs on the standard basis?
When the court is asked to assess the amount of costs payable by an unsuccessful party, the costs judge will adopt a structured approach.
Stage 1
The first stage requires the judge to go through the bill on a line by line basis, scrutinising each point in turn. Any items deemed to be unreasonably incurred or unreasonable in amount will be disallowed.
e.g. seeking out expert evidence when permission had not been given for this.
Stage 2
The proportionality of the overall figure must then be assessed by reference to the factors listed in Part 44 (above).
* If deemed to be proportionate, no further assessment is required.
* If not, the judge will then scrutinise various categories of cost, such as disclosure or factual evidence, to decide whether they should be further reduced. Once any such reductions have been made, the resulting figure is the final amount of the costs assessment.
The court’s powers to reduce costs regarded as disproportionate has been demonstrated in case law.
What is the key difference between the standard basis and indemnity basis?
There are two key differences between the bases.
* When assessing on the standard basis, the court will only allow those costs that are proportionate to the matters in issue. There is no test of proportionality on the indemnity basis.
Any doubts are resolved in favour of the receiving party on the indemnity basis, and the paying party on the standard basis.
Can costs be granted to non-parties?
Winning at trial or obtaining a settlement does not always result in success particularly if it becomes apparent that the losing party is unable to pay the costs.
Fortunately, the court has a discretionary power to make an order that a non- party meets the costs and this is governed by Part 46.
However, although the funding of litigation by third parties is becoming more common, such an order is still exceptional and the court would have to be satisfied that the non- party was the real party interested in the litigation or that they were responsible for bringing the proceedings.
External litigation funders such as family, friends or people who have given to a fund- raising campaign and who have no interest in the outcome will not be at risk of such an order; in contrast, third party funders in a more formal context may well be.
Before an order can be made, the third party must be added as a party to the proceedings and may attend the hearing when the court determines the issue of costs.
Note there is no requirement to make a finding that the non- party acted improperly before making an order.
What is security for costs?
The time and expense involved in dealing with prospective and actual litigation are often considerable.
However, the claimant does at least have some control over this as they make the decision whether to proceed or not. In contrast, the defendant has the litigation imposed upon them.
Even if the claim is defeated and the defendant obtains an order for their costs, they will never recover the full amount.
Even worse, the claimant may be unable or unwilling to pay the costs order, leaving the defendant with the unenviable choice between bearing their own costs or investing further time and money in trying to enforce the order.
The provisions in Part 25 on security for costs provide some assistance for defendants who have concerns in this regard.
How can a defendant protect themselves if they are worried that a claimant would not be able to pay their costs if the claimant loses at trial?
Security for costs
What test does the court use to make a decision on whether to make an order for costs?
The court has the discretionary power to make an order for security for costs if:
(a) it is satisfied, having regard to all the circumstances of the case, it is just to make such an order; and
(b) one or more of the conditions in Part 25 applies.
The conditions :
The defendant has a number of conditions at their disposal with the most commonly used being:
a) Claimant resident outside a 2005 Hague Convention State
The defendant may apply for an order for security for costs where the claimant – whether it be an individual or a company – is resident out of the jurisdiction (namely, England and Wales) and is not resident in a State bound by the Hague Convention (which includes the EU and the UK). For individuals this is where they normally and habitually live; whereas for companies it is where their central control and management are located. This condition recognises the difficulties a defendant may experience in enforcing a costs order outside those bound by the 2005 Hague Convention.
b) Claimant is an impecunious company
The defendant must establish there is reason to believe the claimant will be unable to pay the defendant’s costs if ordered to do so. Evidence of the company’s financial assets and the likely total costs of the litigation will be essential.
c) Claimant has taken steps to make enforcement difficult
For this condition to be satisfied, the defendant must demonstrate that the claimant has taken steps in relation to their assets such that, if they lose the case and a costs order is made against them, the order will be difficult to enforce. The court will consider the effect of any such action and not the motivation. Thus, an order can be made even if, for example, the claimant is relocating to Saudi Arabia to take up a new employment opportunity. However, a failure to disclose assets may be sufficient to establish this requirement. On a separate note, in circumstances such as this, an application for a freezing injunction may also be appropriate.
Justness :
The court must also be satisfied that it is just to make the order and the following factors are considered important.
(a) The strength of the claim and the defence: the less likely the defendant is to win at trial, the less justified they are in seeking security.
(b) The claimant’s ability to provide security: where the claimant has a reasonable prospect of success, the courts will be reluctant to make an order for security with which they cannot comply as the effect will be to stifle the claim.
(c) The causes of the claimant’s impecuniosity: the claimant may be able to persuade the court that their poor finances are caused by or contributed to by the defendant’s behaviour.
(d) Property within the jurisdiction: where the application is made against a claimant resident outside the EU, the court is unlikely to grant security if they have sufficient assets within the jurisdiction that would be available to meet the defendant’s costs.
(e) The timing of the application: the order should be applied for as soon as practicable.
What is the procedure for obtaining a security for costs?
As with all interim applications, the defendant should write to the claimant first and ask for security to be provided voluntarily.
If not, the defendant should submit a notice of application to the court with a witness statement in support.
The evidence must establish that a condition exists, persuade the court it is just to exercise its discretion in favour of the defendant and justify the amount sought.
If the order is granted, it will specify the amount of the security, the date by which the claimant must provide it and the form it will take.
Most commonly, the claimant is required to make a payment into court.
What impact does settlement have on costs?
The parties are encouraged to negotiate to settle the claim before the litigation starts and, if unsuccessful, to continue to review the case throughout to seek agreement.
* Where a settlement is reached prior to the issue of proceedings, the prospective claimant will not be entitled to recover their legal costs unless this has been agreed.
If settlements are reached after litigation has commenced, the terms should be recorded in a consent order or a Tomlin order to ensure that enforcement proceedings may be issued to recover any monies due under the agreement, including costs.
What is a Part 36 offer?
A Part 36 offer will be referred to as such and, to be valid, must comply with the relevant formalities. The offer must:
(a) be in writing;
(b) make clear it is made pursuant to Part 36;
(c) specify a period of not less than 21 days during which, if the offer is accepted, the defendant will pay the claimant’s costs (known as ‘the relevant period’); and
(d) state whether it relates to the whole of the claim or to part of it, and whether it takes into account any counterclaim.
In practice, most offers will state that acceptance is required within 21 days, so the offeree has three weeks to decide what to do. Because this is the norm, references are made in this chapter to Day 21 and Day 22 to assist in calculating the effect of a Part 36 offer. However, it is important to be aware that a longer period may be specified and a different time limit imposed.
The offer is made when it is served on the other party and the rules of deemed service will apply here. It is inclusive of interest until the relevant period expires.
A Part 36 offer is treated as ‘without prejudice save as to costs’. As a consequence, the trial judge will not be made aware of the offer until the case has been decided, both liability and quantum.
Only when the issue of costs falls to be dealt with will any relevant offer be produced to the judge.
What is the effect of accepting a part 36 offer?
A Part 36 offer may be accepted at any time unless notice has been given of its withdrawal, making the relevant period of 21 days somewhat redundant. However, there may be adverse costs consequences of late acceptance so it is preferable to keep within the deadline.
What is the effect of accepting a part 36 offer within the relevant period?
If the defendant makes an offer and this is accepted by the claimant within the relevant period, the sum must be paid to the claimant within 14 days and, if not, the claimant can enter judgment.
The claimant is also entitled to their costs of the proceedings up to the date on which the notice of acceptance is served on the defendant. If the parties cannot agree costs, a judge will assess them on the standard basis.
If the claimant makes a Part 36 offer that is accepted by the defendant within 21 days, the consequences are the same.
The claimant will be entitled to their costs up to the date of acceptance on the standard basis.
What is the effect of accepting a part 36 offer outside the relevant period aka late acceptance?
If the claimant accepts a defendant’s offer after the relevant period has expired and the parties cannot agree costs, the court will normally order that:
(a) the defendant pays the claimant’s costs up to the date on which the relevant period expired; and
(b) the claimant pays the defendant’s costs thereafter until the date of acceptance.
However, if the defendant accepts the claimant’s offer late, the defendant will usually be ordered to pay the claimant’s costs of the proceedings up to the date of acceptance.
In all these scenarios, the proceedings will be stayed (paused) to allow for the sum offered and the costs to be paid.
What is the effect of a part 36 offer not being accepted?
If the offer is not accepted, the proceedings will continue. However, depending upon who made the offer and whether it is beaten at trial, there may be significant consequences in terms of the damages, interest and costs awarded. A decision to refuse what subsequently turns out to be a good offer can prove very expensive indeed. The justification for this tough approach is that the party who made the error of judgment has caused their opponent additional costs and wasted their time, as well as that of the court, by not accepting an offer that they should have.
Because of this, the penalties will be imposed from the day after the relevant 21 day period for acceptance expires (namely, from Day 22) and will apply unless the court rules that it would be unjust to do so.
How will a judge decide whether to make an order to impose penalties for non-acceptance of part 36 offers?
In deciding whether to make an order to impose penalties for non- acceptance of a Part 36 offer, the judge will take into account all the circumstances of the case including the terms of the Part 36 offer, when it was made and in particular how close to the trial, what information was available to the parties at the time, their conduct and whether it was a genuine attempt to settle the proceedings. So when is it just to make an order under Part 36?
An order will be made in the vast majority of cases and it will be the exception not to do so. It is irrelevant by how small an amount the offer is beaten.
It may be unjust where the offeror has not provided sufficient disclosure to allow the offeree to make an informed decision; or, for example, the Part 36 offer expired only days before the trial and crucial allegations that had not been pleaded were raised in the opening of the case.
What consequences are there if a claimant makes a part 36 offer and they win at trial and are awarded a sum that equals or beats their own offer?
The claimant wins at trial and equals or beats their own offer. In the words of the CPR, the claimant has obtained a judgment which is at least as advantageous as their Part 36 offer. In this situation, the claimant will do very well indeed as, in addition to being awarded damages by the court, the penalties that may be enforced upon the defendant are potentially draconian. The sanctions, considered below, will be imposed in every case unless it is unjust to do so.
Additional amount (usually a percentage of the damages)
As the defendant has lost at trial, they will be ordered to pay damages and interest due under the contract or statute in the usual way (the sum awarded). However, the defendant will also be required to pay an additional amount – effectively ‘extra’ damages.
(a) For damages of up to £500,000, the defendant must pay an additional amount of 10% of the sum awarded.
(b) For damages in excess of £500,000 and up to £1 million, 10% of the first £500,000 is payable and thereafter, 5% up to a maximum of £75,000.
Where the remedy awarded is non- monetary, the term ‘sum awarded’ refers to the costs.
The remaining penalties take effect from Day 22, the day after the relevant 21 day period for the defendant to accept the claimant’s Part 36 offer expires.
b) Enhanced interest on damages
From Day 22 onwards, the percentage rate of interest that is charged on the damages awarded increases to a rate not exceeding 10% above the base rate – higher than the usual rate claimed in most proceedings.
To understand the full implications, it is necessary to identify certain key dates.
c) Costs on an indemnity basis
The provision for indemnity costs will be replaced with a 35% uplift on the claimant’s fixed recoverable costs from Day 22 onwards.
d) Interest on indemnity costs
The final penalty imposed is that interest is awarded on the 35% uplift and this may be as high as 10% above the base rate. This is in contrast with the general rule that interest is not payable on costs incurred before judgment. Again, the sanction runs from Day 22.
What consequences are there if a claimant makes a part 36 offer and they win at trial but do not beat their own offer?
The second possible outcome if the case proceeds to trial is that the claimant succeeds in their claim but is awarded damages that are lower than their own Part 36 offer. In this instance, no extra penalty is imposed on either party. This is because neither did anything ‘wrong’. The claimant was right to make an offer but pitched it too high whereas the defendant was correct to turn it down for the same reason.
Part 36 has no effect.
What consequences are there if a claimant makes a part 36 offer and they lose at trial?
The final outcome is that the claimant is unsuccessful at trial. As a consequence, the claimant will not be awarded damages at all and will be ordered to pay the defendant’s costs on a standard basis in the usual way.
Once again, Part 36 has no effect.
In summary, there are no penalties if the claimant makes a Part 36 offer even if it becomes apparent that it was ill- judged. However, if the offer is either equalled or beaten, the sanctions for the defendant are severe.
What consequences are there if a defendant makes a part 36 offer and the claimant wins at trial and they are awarded a sum that equals or beats the defendant’s offer?
If the claimant obtains a judgment that is (to quote Part 36) more advantageous than the defendant’s Part 36 offer, it is clear they were justified in their refusal because it was too low.
In these circumstances the defendant will be ordered to pay:
* the amount of the judgment plus interest as claimed in the particulars of claim; and
* the claimant’s costs on the standard basis.
Part 36 has no effect.
What consequences are there if a defendant makes a part 36 offer and the claimant wins at trial but fails to beat the defendant’s Part 36 offer?
What if the claimant fails to obtain a judgment that is more advantageous than the defendant’s Part 36 offer; in other words, the damages awarded are either equal to or less than the offer?
In this instance, the court will, unless it is unjust to do so, make an order that punishes the claimant financially for continuing with the claim when (in hindsight) they should have accepted the offer.
By failing to do so they have, since the relevant period expired, wasted the time and money of both the defendant and court.
Ordinarily, a claimant who succeeds at trial would expect the court to order the defendant to pay their costs for the entire proceedings. However, in the scenario where the claimant fails to beat the defendant’s offer, the court takes a different approach.
The effect of Part 36 is:
The defendant will have to pay the claimant’s fixed costs to the stage where the relevant period of the Part 36 offer expired. Then the claimant will have to pay the defendant’s fixed costs incurred thereafter until judgment plus interest on those fixed costs (most probably at 1 or 2% above base rate).
This is commonly called a ‘split costs’ order because the costs are divided between the parties with the split occurring at the expiry of the relevant period of 21 days.
What consequences are there if a defendant makes a part 36 offer and the claimant loses at trial?
What if the claimant fails to establish liability so they are not awarded any damages at all?
This would be a financial disaster as far as the claimant is concerned because they turned down the money offered by the defendant. The general rule as to costs would apply and the claimant, as the losing party, would be ordered to pay the winner’s (the defendant’s) costs. However, to penalise the claimant for not accepting the defendant’s Part 36 offer, they would also be ordered to pay interest on those costs from Day 22 until judgment – usually at 1% or 2% above base rate.
It is apparent that, although a penalty is imposed on the claimant for their error of judgment, this is not as significant as those which the defendant could face.
How are judgment debtors means investigated?
To determine the best method of enforcing the judgment, it may be necessary to obtain more information about the judgment debtor’s financial circumstances.
There are two possibilities:
(a) instruct an enquiry agent; and
(b) apply to the court for an order to obtain information from the debtor.
Although an enquiry agent may succeed in locating assets that the debtor seeks to hide and may be a quicker way forward, this approach does incur expense.
The second option, which is covered by Part 71 and was previously referred to as an oral examination.
What is an order to obtain information?
An order to obtain information from a judgment debtor is a court order requiring the debtor to attend before an officer of the court to be questioned on oath about their finances or those of a company of which they are an officer.
What is the procedure to obtain an order for information for the purposes of enforcement of a judgment?
The procedure is as follows:
(a) The judgment creditor files a notice of application at court setting out details of the name and address of the debtor, the judgment the creditor is seeking to enforce and the amount owed. Any specific documents that the creditor wants produced at the hearing should be listed.
(b) The order is normally personally served on the debtor who can, within seven days, request payment of their reasonable travelling expenses to and from the court.
(c) The hearing will usually take place in the County Court hearing centre for the area where the debtor resides or carries on business.
(d) The examination is conducted by an officer of the court, or a judge if requested by the creditor.
(e) Standard questions are asked, although the creditor may also request additional ones. The officer will make a written record of the responses given by the debtor, who will be invited to read and sign it at the end of the hearing.
(f) If the debtor fails to attend court, the judge may make a committal order against them, which is usually suspended provided the debtor complies with the order.
What are the methods for enforcing a judgment?
Taking control of goods
Charging order
Third party debt order
Attachment of earnings order
What is the ‘taking control of goods’ method of enforcement?
This method of enforcement is governed by Part 83 and is used where the amount owed may be recovered by seizing the debtor’s possessions of an equivalent value. The items are then sold by public auction.
Who carries out a taking control of goods order?
In the High Court, the task is carried out by a High Court Enforcement Officer (HCEO) and in the County Court, by enforcement officers (often referred to as bailiffs).
What powers do enforcement officers have when they are carrying out a taking control of goods order?
Enforcement officers cannot force entry into a debtor’s home, but they can use reasonable force to enter business premises if they believe the debtor’s goods are inside.
What can be seized in a taking control of goods order?
The usual contents of a home or business premises including motor cars, computers and banknotes, but also less common ones for instance boats and securities such as share certificates.
What canNOT be seized in a taking control of goods order?
The so- called ‘necessary items exemption’ only applies to individuals and not to a judgment debtor that is a partnership, limited company and so on. If applicable, items such as clothes, bedding, furniture and household equipment, which are reasonably required for the basic needs of the debtor and their family, cannot be taken.
Neither can work tools, computers, vehicles and other equipment that are necessary to the debtor personally for work or study, subject to a maximum aggregate value of £1,350. In addition, goods that belong solely to another, such as a spouse or other family member, or those subject to hire or hire- purchase agreements may not be removed.
Any disputes concerning a co- owner’s entitlement to a share of the proceeds of sale will be resolved by the court.
Where can a taking control of goods order be enforced?
A party who has obtained a judgment in the High Court may issue a writ of control in that court, regardless of the amount to be enforced. However, where a party has obtained judgment in the County Court, different provisions apply as follows:
a) Judgment sum is less than £600
- The court in which to enforce judgment is the County Court
- The document required is a warrant of control
- And this enforced by an enforcement officer (a bailiff)
b) Judgment sum is £600 or more but less than £5,000
- The court in which to enforce judgment is either the County or the High Court. If the High Court is chosen, the judgment must be transferred from the County to the High Court.
- The document required is the warrant or writ of control as appropriate to the court.
- The enforcement agent is the enforcement agent applicable to the court
c) Judgment sum is £5,000 or more
- The court in which to enforce judgment High Court (except for proceedings under the Consumer Credit Act 1974)
- The document required is a writ of control as appropriate to the court.
- Who enforces the High Court Enforcement Officer
What is the procedure for enforcing a judgment by taking control of goods?
The procedure differs slightly depending upon the court in which the judgment is to be enforced.
High Court
(a) The judgment creditor delivers a praecipe (request) and two copies of a writ of control to the court office, together with the judgment.
(b) The court seals the writ and returns one copy to the creditor.
(c) The creditor then forwards this to the HCEO for the county where the debtor resides or carries on business, for the writ to be executed.
County Court
(a) The creditor files the form of request for a warrant of control at the County Court hearing centre that serves the address where the goods are to be seized.
(b) The warrant is executed by the enforcement officer for the district where the debtor resides or carries on business.
When executing the writ or warrant of control, the enforcement officers usually immediately either remove goods or take control of them.
However, if the debtor needs time to pay, they may enter into a controlled goods agreement under which the debtor acknowledges that the enforcement agent has taken control of the goods and, further, that they will not remove or dispose of them before the debt is paid. The effect is that the goods remain on the premises for a few days to allow the debtor one final opportunity to pay. If payment is still not received, the goods seized will be sold at a public auction and the amount required to pay the judgment, including costs, will be deducted from the money raised, with any surplus being returned to the debtor (and any co- owner).
What are the advantages and disadvantages of enforcement through a taking control of goods order?
Although often effective, there are limits to the powers of HCEOs and enforcement officers.
As a general rule, they cannot force entry into a debtor’s home and a savvy debtor may simply refuse them entry.
However, they are able to use reasonable force to break into business premises if there is no living accommodation attached and the debtor’s goods are believed to be inside – particularly helpful when enforcing against a commercial debtor.
There are certain advantages of enforcement in the High Court, one of which is that HCEOs are usually paid on their results – based on the amount collected – and so it is generally perceived that they are more effective in achieving a successful conclusion.
Also, in the High Court, interest continues to accrue on the debt. However, in many cases, the logistical difficulties involved (for example, cars can be hidden in garages), the costs of this method of enforcement and the relatively low re- sale value of the goods seized mean that the judgment creditor does not obtain all the monies due to them.
What is a charging order?
Under Part 73, it is possible for a charging order to be made either on land or on securities, such as stocks and shares. The effect is that the creditor is placed in a similar position to a mortgagee. The charging order will sit on the asset until such time as it is worth the creditor pursuing the matter further and applying for an order for sale. However, this may involve a considerable wait until, for example, the land has increased in value such that there is sufficient equity in the property to cover the judgment debt.
What is a charging order over land?
In addition to being able to apply to the court for an order charging the debtor’s land with the amount due under a judgment, a charging order can also be made in respect of land the debtor owns jointly with another person. In this instance, the order is a charge upon the debtor’s beneficial interest, rather than upon the land itself. Once a charging order has been made, it should be registered at the Land Registry or (if unregistered) at the Land Charges Department.
At this point, although the creditor has security for the debt, they still do not have their money.
To obtain this, the creditor would have to apply to the court for an order for sale of the land
charged and the judgment will then be satisfied out of the proceeds of sale.
What is the procedure for obtaining a charging order?
Where the debt is more than £5,000, the application for a charging order can be made either in the County or the High Court. However, if it is made to the County Court, the application must be submitted to the County Court Money Claims Centre.
There are three stages to the procedure.
Stage 1: interim charging order
- The creditor must file an application notice including details of the judgment debt, the land over which the charging order is sought, and the names and addresses of any other person affected such as a party with a prior charge over the property. The creditor must also file a draft interim charging order (ICO).
- The application will usually be dealt with by a court officer without a hearing, who will either make the ICO or refer the matter to a judge for further consideration.
- The ICO, the application notice and any documents filed in support must be served by the creditor on the debtor within 21 days.
- The debtor then has 14 days to request that the court officer’s decision be reviewed by a judge.
Stage 2: final charging order
- If any person objects to the making of a final charging order (FCO), they must file and serve written evidence stating the grounds of objection within 28 days of service of the ICO.
- If an objection is received, the court will transfer the application to the debtor’s home court for a hearing.
- At the hearing the court can make a FCO, discharge the ICO or direct a trial of any issues in dispute between the parties.
Stage 3: order for sale
If the interim order is made final, the creditor has a charge on the debtor’s land, which can be enforced by an order for sale of the property. However, in order to do so, fresh proceedings must be commenced.
What is a charging order on securities?
A creditor may also obtain a charging order on a debtor’s beneficial interest in certain specified securities including UK government stock, shares and unit trusts. The order will normally provide for the charge to extend to any interest or dividend payable. The procedure is similar to that for obtaining a charging order on land.
What are the advantages and disadvantages of a charging order to enforce a judgment?
A charging order is a useful means of securing payment against those debtors who lack liquid (available) assets and where other forms of enforcement would not recover the debt.
The main advantages are that, although it does not necessarily result in prompt payment, a charging order does secure the judgment debt. Furthermore, it may encourage the debtor to make efforts towards settling the debt, particularly as interest will continue to accrue (unless the debt falls under the Consumer Credit Act 1974).
However, a charging order will not always be effective. It is not appropriate where there are significant other prior charges or mortgages over the property so that there may be no or insufficient equity available to enforce against, or where the debtor has no beneficial interest over it.
Even if granted, payment may not be received for many years if an application for an order for sale is unsuccessful, perhaps because there are other people in the house such as children, who will be severely affected by a sale.
Nevertheless, it may be the only way forward if there are no other assets against which the creditor can enforce and it is preferable to wait for the monies owed rather than lose them entirely.
What is a third party debt order?
The debtor may be owed money by a third party, for example:
* bank or building accounts that are in credit; and
* trade debts due to a business.
In these circumstances, the court can make an order under Part 72 requiring the third party to pay the creditor sufficient of the monies to satisfy the judgment debt and costs. This is known as a third party debt order.
The debt must belong to the judgment debtor solely and beneficially.
What is the procedure for obtaining a third party debt order?
An application for a third party debt order must be issued in the court that made the order being enforced, unless the proceedings have (subsequently) been transferred to a different court. The procedure is as follows:
(a) The creditor applies to court without notice to the debtor, providing details such as the name and address of the branch where the money is held and the account number.
(b) The judge will make an interim order, which has the effect of freezing the bank account or funds held by the third party. At this point, no money is paid to the creditor but a hearing will be listed no less than 28 days later.
(c) At the hearing, the court will consider any objections and, unless there is a good reason not to do so, the order will be made final. This requires the third party to pay the money to the creditor.
What are the advantages and disadvantages of a third party debt order?
The main benefit of this method of enforcement is the element of surprise as the debtor will not be aware of the application until after the order has been made.
By this time, their bank account or funds held by a third party will already have been frozen.
However, an informed debtor is likely to be aware of this as a possibility and may move the funds as soon as a judgment is made (if not before). If the account is not in credit on the day when the order is served, it is ineffective.
Furthermore, to be successful, the bank account must be held in the sole name of the debtor and, if in joint names, the application will fail.
What is an attachment of earnings order?
An attachment of earnings order is an order that compels the debtor’s employer to make regular deductions from the debtor’s earnings and pay them into court. For this method of enforcement, the debtor must be employed.
What is the procedure for obtaining an attachment of earnings order?
Applications for an attachment of the debtor’s earnings must be made to the County Court as the High Court has no power to make these orders. As a consequence, if the judgment has been obtained in the High Court, the proceedings will have to be transferred to the County Court before this method of enforcement can be used.
The procedure is set out in Part 89.
(a) The creditor applies to the County Court Money Claims Centre.
(b) The court informs the debtor of the application and requires them either to pay the sum due, or to file a statement of means giving details of their income and outgoings.
(c) On receipt of the form, a court officer will make an attachment of earnings order, fixing the repayment rate by applying certain guidelines. Only if there is insufficient information to do so will the matter be referred to a judge. The order will specify the normal deduction rate and the protected earnings rate. The latter is the amount that the court considers is reasonable for the debtor to live on, so if their earnings for a particular week are equal to or less than this figure, the creditor will receive nothing that week.
(d) The order will be sent to the parties and to the debtor’s employer, with instructions to deduct the amount ordered from the debtor’s pay and forward it to the court. The employer is entitled to deduct a small additional sum in respect of their administrative costs.
(e) If either party objects to the order that has been made, they can apply for the matter to be reconsidered by the district judge at a hearing.
What are the advantages and disadvantages of an attachment of earnings order?
Attachment of earnings orders are an effective means of obtaining payment of a judgment debt provided the debtor remains in work and is not self- employed. However, if the debtor loses their job, the payments will cease and if they move employment, the creditor will have to repeat the process. In addition, the court may order a very low value instalment so the judgment will take a considerable time to satisfy.
How can an English judgment be enforced in another jurisdiction?
Whether an English judgment can be enforced abroad and, if so, the method used will depend upon the nature of the judgment and the country concerned. In some countries, a simplified process is available but, if not, the party will have to decide whether to issue fresh proceedings abroad or to give up entirely.
The situation is complicated by the number of different systems in place.
How can an English judgment be enforced in Scotland and Northern Ireland?
Enforcing a judgment in the home countries is relatively quick and straightforward and is governed by the CPR. Part 74 requires a creditor to:
(a) obtain a certificate confirming the date of the judgment, the sum awarded and details of interest and costs; and
(b) make an application to the court in Scotland or Northern Ireland, supported by evidence, to register the judgment within six months.
If the application is successful, the judgment will be registered and may be enforced using local methods.
How can an English judgment be enforced in Commonwealth countries?
A company may have dealings with a variety of Commonwealth states including Australia, Pakistan and Jersey. Enforcement is possible under the Administration of Justice Act 1920 for High Court judgments and the Foreign Judgments (Reciprocal Enforcement) Act 1933 for judgments of the County Court. The judgment must be final and registered within 12 months for the 1920 Act but the creditor has six years for matters that fall within the 1933 Act. Failure to do so means the creditor loses their right to enforce outside of the jurisdiction.
How can an English judgment be enforced in countries that are not Scotland or Ireland or part of the Commonwealth?
For all other countries, including Member States of the EU where proceedings commenced on or after 1 January 2021, the issue of enforcement is dealt with in two ways.
If the 2005 Hague Convention applies (where the parties have an exclusive choice of court agreement), the judgment will be enforced and recognised in that country.
Alternatively, the common law rules will apply. The effect is that the creditor’s ability to enforce an English judgment will be determined by the national law of the particular country where enforcement is sought. The creditor will usually have to issue fresh proceedings and instruct local lawyers to pursue their claims with the consequential increase in time and cost. This process can cause difficulties in many countries including important trading partners such as the USA, Japan and China.
What are the practical considerations of trying to enforce a judgment outside of jurisdiction?
Where a claim involves a foreign element, the claimant should consider carefully how realistic their chances of enforcing the judgment are before commencing proceedings. If enforcement is likely to require new proceedings to be issued, it may be sensible to start the claim in that country rather than in the English courts.
What factors will the court consider when deciding whether to impose cost sanctions for failure to engage in ADR?
In the leading case of Halsey v Milton Keynes General NHS Trust, the Court of Appeal held that the court may impose a costs sanction on a party if they unreasonably refuse to take part in ADR. The court listed a number of factors which may be taken into account when determining this question:
(a) the nature of the dispute;
(b) the merits of the case;
(c) the extent to which other settlement methods have been attempted;
(d) whether the costs of the ADR would be disproportionately high;
(e) whether any delay in setting up and attending the ADR would have been
prejudicial; and
(f) whether the ADR had a reasonable prospect of success.
The burden is on the other party to show that the refusal is unreasonable with the court rejecting any presumption in favour of mediation.
Will silence be construed as unreasonable failure to engage in ADR?
Although the court stressed that silence in the face of an invitation to participate in ADR would, as a general rule, be regarded as unreasonable, this was not automatic.
In this particular instance, the judge did not penalise the successful claimant for their failure to consider ADR because he concluded that mediation had no reasonable prospect of success, would only add to costs and the matter raised complex questions of law that made it unsuitable for mediation.
What powers does a court have with regards to compelling a party rot engage in ADR?
The court can lawfully stay proceedings for, or order that the parties engage in a non-court based dispute resolution process.
This is provided that the order made does not impair the essence of the claimant’s right to proceed to a judicial hearing and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.
The effect is that, although ADR was previously strongly encouraged, the court now has the power to order the parties to engage.
