UNIT 1 AND 2: PRE-ACTION AND COMMENCING

Question 1

What is ADR

Answer 1

Means of resolving disputes with assistance of an independent third party who may help parties reach their own solution but who cannot impose a solution.

Voluntary unless ordered by court, confidential, without prejudice; if it fails + court proceedings are taken, the court will not be made aware of the ADR until after the judge has dealt with issues of liability + award of damages.

Parties choose process + can withdraw at any time before settlement reached. If either party does not like proposed solution, do not have to accept.

Question 2

Is arbitration voluntary?

Answer 2

Yes, , in the sense that parties either voluntarily entered into an arbitration agreement or agreed to decide matter in this way once dispute arose.

If parties voluntarily entered into arbitration agreement – where one party commences court proceedings, other should acknowledge service + if they wish to enforce arbitration agreement, apply to court to say (suspend) the proceedings.

Question 3

When should a solicitor discuss ADR?

Answer 3

Solicitor should discuss ADR availability when a dispute arises. If client is willing, should be used UNLESS

• It is obviously inappropriate, ie injunction required;
• Other party unlikely to co-operate in process; or
• Other party cannot be trusted to comply with an award.

Question 4

Can the court enforce ADR?

Answer 4

• Civil Procedure Rules 1998 dictate how a case is litigated, failure to respond to a reasonable proposal to attempt settlement by ADR may have significant impact on any subsequent order for costs.
• Commonly, direction concerning ADR is included in court orders that set out how parties are to progress the matter.
• At all stages the parties must consider settling this litigation by any means of Alternative Dispute Resolution (including Mediation); any party not engaging in any such means proposed by another must serve a witness statement giving reasons within 21 days of that proposal; such witness statement must not be shown to the trial judge until questions of costs arise.
• More robust approach to ADR now
• Churchill v Merthyr Tydfil CBC court can now lawfully stay proceedings for or order parties to engage in a non-court based DR process, provided that order made does not impair essence of claimant’s right to proceed to a judicial hearing and is proportionate to achieving legitimate aim of settling dispute fairly, quickly, at reasonable court. Court can now ORDER parties to engage.

Question 5

What factors will the court take when considering penalties for failure to engage in ADR?

Answer 5

• Nature of dispute
• Merits of case
• Extent to which other settlement methods have been attempted
• Whether costs of ADR would be disproportionately high
• Effect of any delay and whether ADR had a reasonable prospect of success

Question 6

What does the solicitor have to discuss during the course of proceedings?

Answer 6

• During course of court proceedings, parties complete directions questionnaire + to ensure that clients are aware of importance of ADR, solicitors required to confirm that they have explained:
• The need to try to settle;
• The options available; and
• The possibility of costs sanctions if they refuse to attempt to settle.

Question 7

What is the procedure for mediation?

Answer 7

• Parties agree independent third person/body as go-between = mediator.
• Will be sent written statements from both parties, and will then discuss case with them on ‘without prejudice’ basis. Should be frank discussions as judge not aware.
• Will enable mediator to identify real areas of disagreement + most important points for constructive solution.
• Often meet in same building to deal with problems quickly face-to-face.
• Can be through correspondence, telephone, technology (online).

Question 8

Benefits of mediation?

Answer 8

• cost + speed
• flexibility
• privacy
• preserving business relationship
• third party can help with arrangements ie discounts - commercial reality
• ability to withdraw at any time

Question 9

Disadvantages of mediation?

Answer 9

• Not appropriate where client needs ruling on point of law or injunction.
• Matters involving fraud/commercial disreputable conduct unsuitable.
• Disclosure: no formal procedures for disclosure of documents/evidence; risk parties may resolve dispute without knowing all the facts, unjust decision? But many businesses agree that quick decision better than wasting time/money.
• Privacy: if client requires public vindication to repair reputation, privacy disadvantage as clients lose the opportunity to demonstrate they were not at fault.
• Ability to withdraw: no one can be forced to engage in mediation, may withdraw at any stage despite objections from other party, then litigation. Other party may be unhappy at time and money expended without a resolution.

Question 10

Enforcement of mediation agreement?

Answer 10

Even if agreement reached, not automatically binding as client cannot enforce this like a court judgement. If parties to agree to terms suggested as a result of mediation, they have entered into a contract. If one party does not carry out that contract, may be sued for breach.

Question 11

How does arbitration arise? nb: 2 ways

Answer 11

o Parties may be contractually bound to use arbitration, many business contracts contain clause requiring parties to submit to arbitration in event of dispute, ie construction shipping.

o In the absence of clause, parties may agree to arbitration once dispute has arisen + may choose own arbitrator with relevant expertise.

• ‘Parallel’ dispute resolution process; substitute for litigation, once party has agreed to be subject to it, they cannot take advantage of normal court processes.

Question 12

What legal authority governs arbitration?

Answer 12

Largely governed by statute, Arbitration Act 1996, ONLY applies if an agreement to arbitrate in writing.

Question 13

Key distinction of arbitration from mediation?

Answer 13

Binding nature of outcome in arbitration

Question 14

Procedure for arbitration?

Answer 14

• Dispute referred to independent arbitrator – person/professional or trade body may be specified in original contract; or may choose own arbitrator with relevant experience.
• Arbitration process will be adopted – less formal than court procedure.
• Once third party reached decision – binding on both parties.

Question 15

Advantages of arbitration?

Answer 15

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.

Question 16

Why are arbitration solutions generally better than court orders?

Answer 16

They are often more practical

Question 17

Disadvantages of arbitration?

Answer 17

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.
* Unlikely to be a cheap alternative as the arbitration expert / panel will need to be paid, parties often want lawyers, ie amounts in dispute are significant.
* Decision is binding with very limited rights of appeal

Question 18

Enforcement in arbitration?

Answer 18

• 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.

Question 19

Litigation key elements

Answer 19

• Neither party can withdraw without paying opponent’s costs. If parties unable to negotiate settlement, court will impose own solution that may be enforced by successful party.
• Main advantage as it breaks deadlock, at a cost though.

Question 20

Role of judges in litigation

Answer 20

much County / High Court work by district judges, deal with majority of interim applications + hear trials where amount does not exceed £25,000.
o (trials in excess held by circuit judges in County Court and High Court judges in High Court.

Question 21

What is the court manager’s role?

Answer 21

Senior civil servant in charge of court office, team of admin staff.

Formal docs sent to court ie claim forms and defences are addressed to court manager.

Question 22

Who are the ushers?

Answer 22

When court is sitting, ushers are in attendance. Assist smooth running of courts, ensure lists of cases dealt with efficiently.

Question 23

What is an enforcement officer?

Answer 23

Bailiffs and High Court Enforcement Officers serve court docs + enforce court orders and judgements so claimants receive money.

Question 24

Stage 1: pre-commencement steps?

Answer 24

• Starting point is the client – objectives, legal/commercial?
• Evidence for viability of claim + prospects of success.
• Costs and serious consideration to ADR?
• Pre-action protocols govern steps parties should take before commencing a court case. Parties must establish what issues are in dispute, share info that is available to them + endeavour to resolve; 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.

Question 25

Stage 2: commencement of claim?

Answer 25

• Proceedings commenced by a claim form, which must be served on the defendant together with full details of the claim, called particulars.
• If 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.

Question 26

Stage 3: interim matters?

Answer 26

• Once on a track, court carefully manages a case to ensure the matter progresses towards trial date.
• Directions given to parties listing all steps they must take to prepare for trial + strict timetable.
• Inc. disclosing any relevant documents that are in their possession + impact upon the case (whether they assist or not). Evidence the parties wish to rely on, ie witness statements and experts’ reports, must then be exchanged; costs scrutinised.
• Parties may apply to the court for any specific orders that might be required, ie to compel an opponent who has neglected to take a required step in accordance with timetable.

Question 27

Stage 4: trial

Answer 27

• Judge will hear evidence at trial + make decision as to outcome, resolving all issues of liability and quantum (damages). Judge will decide if any party should pay other’s costs, if fixed costs do not apply, determine.

Question 28

Stage 5: post trial

Answer 28

• Party who is unhappy with judgement may decide to appeal all or part of trial judge’s decision.
• If damages and/or costs are not paid as required, party would have to apply to court to enforce the judgement. Involves instructing court officials to attend debtor’s premises and to take their belongings to be sold at public auction. Proceeds then paid to appropriate party.

Question 29

Limitation periods?

Answer 29

Strict time limit imposed on a claimant that determines the last date on which they can issue proceedings against a defendant

Limitation Act 1980 time limits for claimant to comply, if missed, unless exceptional circumstances, end of matter as claim will be ‘statute barred’ to recognise passage of time ie witness accounts less reliable.
* If party has missed limitation period, defendant will have technical defence – if court agrees that claim is statute barred, claimant will not succeed in litigation.

Question 30

Limitation period for contract and tort? NOT PERSONAL INJURY OR LATENT DAMAGE.

Answer 30

Ss2 + 5 LA 1980

Basic rule is claimant has six years from the date of the cause of action to commence their proceedings and time runs from this point.

When calculating the date on which limitation period expires, usually day on which cause of action accrues is excluded from calculation:
* Contract: cause of action accrues as soon as breach occurs, question of fact determined by court.
* Tort: cause of action accrues when tort is committed. In negligence, when damage occurs as a result of breach of duty.

Question 31

Limitation period for personal injury?

Answer 31

Three years – runs from the date of cause of action or date of knowledge of the person injured, except for children where time limit does not start to run until 18th birthday.

Question 32

Limitation period for negligence where damage is latent?

Answer 32

Claim based on negligence where damage is latent (hidden) at date when cause of action accrued, s14A provides that limitation period expires either:

• Six years from the date of cause action; or
• Three years from date of knowledge of the damage, whichever is later; but
• No later than 15 years after the date of negligent act or omission.

Question 33

Contractual limitation period?

Answer 33

• In contractual case, may be different limitation period in contract; usually shorter than statutory limitation periods, claim should be commenced within contractual period.

Question 34

Can the limitation period be extended?

Answer 34

• General rule: actions commenced outside limitation period where defendant has raised the issue as a defence will not be allowed to proceed, but some exceptions.
• A v Hoare - C issued proceedings against D (serious sexual assault in 1989) in 2004 while he D imprisoned + won lottery, could pursue claim for damages.

Question 35

Purpose of damages for contract?

Answer 35

To put the claimant in the position they would have been in had the contract been properly
performed.

Question 36

Purpose of damages for tort (negligence)/ nuisance

Answer 36

To put the
claimant in the
position they
would have
been in had the
negligent act not
occurred

To put the
claimant in the
position they
would have
been in had the
nuisance not
occurred.

Question 37

Purpose of damages for misrepresentation?

Answer 37

To put the
claimant back to
the position they
were in before
the contract was
entered into.

Question 38

Paragraph 8 of PDPAC

Answer 38

• Importance ADR is recognised in paragraph 8 of the PDPAC; instructs 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  litigation should be last resort, claims should not be issued prematurely when settlement is still actively being explored
• PDPAC expressly states that only reasonable and proportionate steps should be taken by parties to try and resolve the matter and costs incurred should also be proportionate  C writing to D with concise details of the claim, including a summary of the facts, the sum due and how the amount is calculated.
  o D 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

Question 39

Sanctions for failure to follow terms PDPAC

Answer 39

• Failure to comply with both PD + substance of any approved protocol – sanctions
• 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:
  o (a) that the party at fault pays some or all of their opponent’s costs (perhaps on the penalty, indemnity basis);
  o (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
  o (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.
• CPR provision – person who knowingly makes false statement in pre-action protocol letter / other doc in anticipation of legal proceedings may be subject to contempt of court proceedings.

Question 40

Pre-action protocol for debt claims?

Answer 40

• Firms handling debt claims often utilise case management software to ensure monies can be recovered efficiently.
• Covered by PPDC:
  o Applies to any business inc. sole traders + public bodies (creditor) that brings a claim against a debtor who is either an individual or sole trader (debtor).
  o Does not apply to business to business debts
• Potential claimant must give full information on debt owed: up-to-date statement of account with details of interest and charges, and how debt can be paid.
• Standard Reply Form, Information Sheet + Financial Statement annexed to protocol should be included to encourage settlement (ie agreeing repayment plans).
• Debtors given 30 days to respond, court proceedings cannot be issued before deadline.
• Creditor should allow extra time if necessary for debtor to legal/debt advice.

Question 41

Pre-action protocol for professional negligence

Answer 41

• Applies when claimant makes claim against most types of professionals re alleged negligence.
• Sets out code of good practice – steps parties should follow before commencing proceedings; differences with PDPAC:
  1. Additional requirement: party encouraged to notify professional in writing of any intended claim  Preliminary Notice letter contains info about C, brief outline of grievance against professional + if possible, general indication of financial value. Professional should be instructed to inform insurers immediately + acknowledge notice in writing within 21 days of receipt.
  2. C should write Letter of Claim w/ full details of issues + key documents. Professional must acknowledge in writing within 21 days of receipt, thereafter, they have three months to investigate and respond.
  3. Letter of Response sets out whether professional admits allegations and if not why, w/ accompanying docs. Alternatively or as well as Letter of Response, Letter of Settlement may be sent if professional intends to make proposals for settlement of all/part of claim.
  4. If Letter of Response denies claim in entirety + no Letter of Settlement, open to C to start court proceedings. Professional + claimant should instigate negotiations with aim of resolving claim within six months of date of Letter of Acknowledgement.
  5. If matters cannot be resolved, there must be final Stocktake in which parties review positions/narrow down on issues before court action is taken. Consider ADR.

Question 42

Foreign element?

Answer 42

• Starting point = which country’s laws apply.
• Brexit – for proceedings issued in an English court after 1 Jan 2021, old EU rules invalid; each country will apply its own domestic rules to cases where UK involved.
• All contracts should have clearly worded clause stating what law will govern contract; usually parties able to nominate governing law of their choice but UCTA 1977 contains requirements that apply to contract regardless of any agreement to the contrary.
  o If agreement has been reached in advance as to which country’s laws apply to claim, case will usually proceed on that basis.
• Where no governing law chosen, default provisions apply. Parties no longer have choice.
• If court located outside England + Wales, procedure will vary  possibility of becoming embroiled in contentious litigation even before proceedings have properly commenced b/c establishing applicable law will need to be decided as preliminary matter.

Question 43

If the value of the claim is 100k or less - which court?

Answer 43

MUST be County Court

Question 44

If value of claim is more than 100k - which court?

Answer 44

May be started at High Court
in addition to value, High Court may be used if:

• The claim is complex re facts, legal issues, remedy, procedures.
• Outcome is important to public in general.

Question 45

Personal injury - which court?

Answer 45

Claim cannot be started in High Court unless value is £50,000 or more.

AND

• The claim is complex re facts, legal issues, remedy, procedures.
• Outcome is important to public in general.

Question 46

County Court claims

Answer 46

Generally deals with straightforward cases, money only where value is 100k or less (unless damages sought for PI). Include:

• Specified claims for specific sum (debt claim)
• Unspecified claim where amount needs to be quantified by court

Question 47

Who issues most civil claims and retains undefended ones?

Answer 47

Civil National Business Centre (CNBC) issues most civil claims + retains undefended ones. Part 7 of CPR details of claim form:
* ALL money-only claims made on PAPER, both specified and unspecified, must be sent to CNBC. If hearing is required, matter transferred to County Court hearing centre local to defendant.

• Online specified claims (debt) for amounts up to 100k can be made via Money Claim Online; allows individuals, businesses + solicitors to issue proceedings, check claim status, request judgement and enforce it over the internet. Also provides service for bulk users ie utility providers + credit card companies.
• All other CC claims, C can issue proceedings in any CC hearing centre in England and Wales.

Question 48

High Court - 3 divisions and what they deal with?

Answer 48

Kings Bench division deals with contract and tort.

Chancery Division deals with disputes arising over land, trusts, contentious inheritance, partnership claims and company law.

Family division deals with defended divorces and adoption.

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.

Question 49

Business and Property courts?

Answer 49

Commercial Court - complex cases arising out of business disputes over contracts, insurance, banking, finance.

Tech and Construction Court - buildings, engineers, surveying.

Question 50

When and how are proceedings issued?

Answer 50

Proceedings commence when claimant or their solicitor send a claim form + relevant documents to the appropriate court to be ‘issued’; a file is opened:

• a claim form (form N1);
• particulars of claim (may be drafted as part of the claim form or sent separately); and
• documents that are required to be annexed by the CPR ie a copy of any contract.

Many claims now 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; a claim is ‘brought’ for limitation purposes (so time stops running) when the claim form is received in the court office

Question 51

Completing the claim form

Answer 51

Point of departure for litigation and blank forms accessible on Ministry of Justice website.

Summarises most important aspects – substantive law and facts. Content should be detailed so court + other parties understand case.

Question 52

Statement of value

Answer 52

Where claim is for money, actual value of claim needed.

Specified claims: precise figure to be calculated plus interest.

Unspecified claims, C need only put ‘C expects to recover more than 100k’, confirms that matter has been issued in correct court, for personal injury it is 50k.

BUT in County Court, claimant must state:

whether they expect to recover:

∘ not more than £10,000; or
∘ more than £10,000 but not more than £25,000; or
∘ more than £25,000 but not more than £100,000; or
∘more than £100,000;

• they cannot say how much they expect to recover.

CALCULATION SHOULD DISREGARD:

• Possible awards of interest or costs
• Contributory negligence
• Counterclaims

In personal injury claims, not involving road accident, claimant must state whether amount they expect to recover as general damages for pain, suffering and loss of amenity is not more than 1,500 or more than 1,500.

If claim is for damages AND non-monetary remedy ie injunction to stop private nuisance, statement of value must be given re damages claimed. Amount claimed impacts court fee.

Question 53

Financial summary of claim (F)

Answer 53

• In respect of the ‘Amount claimed’ box, for specified claims, an exact figure should be given, including the interest that has accrued to the date of issue of the proceedings.

For unspecified claims, it is an estimate of the amount of damages that the claimant genuinely expects to recover.

• The court fee payable on issue is based upon the figure found in the ‘Amount claimed’, and the maximum fee payable is £10,000.
• The legal representative’s costs are fixed under Part 45 of the CPR for specified money
  claims.

For all other claims, the words ‘to be assessed’ should be inserted, as any costs awarded will be assessed by the court at the conclusion of the proceedings.

Question 54

Statement of truth (K)

Answer 54

CPR Part 22 requires that various documents, including claim form, are verified by a statement of truth; must be in witness’s own language, signed and dated. If the particulars of claim are served separately, they must also be verified in this way.

[I believe] [The claimant or as may be believes] that the facts stated in this [name of the document] are true. [I understand] [The claimant or as may be understands] 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.

The party or their legal representative can sign statement of truth. If claimant not individual:

• any of the partners or a person having the control or management of the business may sign for a partnership; and
• a person holding a senior position such as a director, secretary, chief executive or the treasurer may sign on behalf of a company.

Where an individual signs on behalf of a party, the following should be added to the statement of truth:

I am duly authorised by the [party] to sign this statement.

Where a legal representative signs a statement of truth, this will be taken as their statement that:

(a) the client has authorised them to do so;
(b) they have explained to the client that in signing the statement of truth the solicitor is confirming the client’s belief that the facts stated in the document are true; and
(c) the client was warned of the possible consequences if it should subsequently transpire that the client did not have an honest belief in the truth of those facts; client may be prosecuted for contempt of court.

A legal representative who signs a statement of truth must sign in their own name and not that of their firm or employer, but should state the capacity in which they sign and add the name of their firm where appropriate.

Failure to include a statement of truth means that the court may strike out the document and, even if not, the claimant is precluded from relying upon its contents.

Question 55

When a claim form is issued, when must it be served to the other parties?

Answer 55

Must be served on the other parties within four months; must be sent to or delivered to the defendant so they are aware of the existence of the proceedings.

Rules in CPR Part 6.

Question 56

Who can a claim form be served to?

Answer 56

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.

Question 57

How can a claim form be served personally?

Answer 57

• 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.
• 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.
• 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.

Question 58

Service through doc exchange/post

Answer 58

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.

Question 59

Service by fax/other electronic means

Answer 59

In both instances, the party to be served (or their solicitor) must have expressly confirmed they are willing to accept service in this manner.

• An email address or fax number on the party’s headed paper is not enough to satisfy this requirement.
• In contrast, the inclusion of a fax number on the solicitor’s letterhead is sufficient indication they are willing to accept service by fax.
• 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.

Question 60

Service by an alternative method

Answer 60

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.

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.

Question 61

When to serve notice

Answer 61

Once a claim form has been issued, the claimant has four calendar months in which to serve it on the defendant.

A claim form is issued on 20 January to be served on the defendant who is living in Bristol. The claimant must complete the step required by the CPR, in relation to the particular method of service chosen, before 12.00 midnight on 20 May.

Whether or not the time limit is met depends upon the method of service used; so the period ends on the date:
* personal service was effected or delivery was made at the relevant place; or
* the letter was posted or left with the DX provider; or
* 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.

Question 62

Deemed service of claim form

Answer 62

A document will be taken to have arrived on a given day regardless of whether it actually did.

Rule 6.14: indisputable presumption that the claim form is deemed to have been serviced on the second business day after step required has occurred:

• ‘Business day’ = any day except Sat, Sun, bank holiday, Good Friday or Christmas Day.
• ‘Step required’ = putting claim form in post as above.

So a claim form sent by post on Monday usually deemed served on Wednesday.

Question 63

Deemed service of other docs

Answer 63

particulars of claim, if served separately, falls under these rules and not those that apply to claim forms.

Requirements set out in CPR, r 6.26, can be divided into 2 categories – those with and without a cut off time of 4.30pm.

personal service / delivering to address - on that day if before 430pm
if not next business day

1st class post/DX - second day after it was posted if business day
or next business day if not

Question 64

More complex cases other than debt action - different time limit for particulars?

Answer 64

particulars of claim may be served separately:

• either at the same time as the claim form; or
• within 14 days after service of the claim form (but no later than four months after the date of issue of the claim form).

Question 65

Service outside jurisdiction?

Answer 65

If claim form is to be served outside jurisdiction of England and Wales, CPR allow extra time; instead of four months, document must be served on the other parties within six months of being issued.

Special procedures:

Scotland and Northern Ireland  permission is not required to serve proceedings in these countries but special provisions as to methods of service of the claim form that are acceptable, in CPR Part 6.

In all other cases, including those involving EU Member States, claimant must obtain permission to serve proceedings out of the jurisdiction BUT exception: CPR have been amended to streamline so where a contract contains an English jurisdiction clause, no permission will be needed to serve the claim in these circumstances.

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. IE, breach of contract occurred in England and Wales or the excessive cost or delay of the case being heard in a foreign court. Application must be supported by evidence and is made without notice.

Question 66

When must a defendant respond?

Answer 66

When 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. within 14 days of deemed service:

Once D has been served with BOTH claim form + particulars of claim D must react; to assist, at the same time, the defendant will receive Form N9 – the response pack – which explains how they should respond + time limits.

3 options open to D under CPR:
(a) to file an admission (Part 14);
(b) to file an acknowledgment of service (Part 10); or
(c) to file a defence (Part 15).

4th is to ignore claim entirely, does not mean the litigation goes away as the claimant will be able to apply for judgment in default.

Question 67

Specified claims: admission of entire claim

Answer 67

For admission of entire claim, C must provide details of income + expenditure + make offer of payment in full or instalments.

Upon receipt of form, C may file request for judgement. If C rejects D’s payment terms, judge will decide rate of payment, usually in absence of court hearing.

Question 68

Specified claims: admission of part of claim

Answer 68

D may admit only part of a claim for specified amount. C has 14 days to consider any offers made and decide next course of action:

a) To accept part admission in full satisfaction of claim + request judgement be entered by court for that amount;
b) To accept the part admission but not defendant’s proposals for payments in which case court will decide on suitability
c) To reject offer entirely + proceed with claim as defended action.

Decision likely to be based on D’s ability to pay.

Question 69

Unspecified claims

Answer 69

Where D admits liability for claim for unspecified amount + offers sum of money, court will serve notice on claimant asking whether or not they accept figure in satisfaction of claim.

If offer accepted, C may enter judgement for amount offered + if D has asked for time to pay: C must provide details of income + expenditure + make offer of payment in full or instalments. Upon receipt of form, C may file request for judgement. If C rejects D’s payment terms, judge will decide rate of payment, usually in absence of court hearing.

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.

Question 70

Acknowledgement of service

Answer 70

Filing acknowledgment of service form buys the defendant time:
instead of having 14 days from service of the particulars of claim to file their defence, they now have 28 days

Question 71

The defence

Answer 71

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.

Response pack contains forms that the defendant can use + most litigants in person (not represented by lawyer) will use.

Alternatively, a separate more detailed document may be prepared and this is the approach a solicitor would generally take.

Once defence has been filed, a copy must be served on all other parties. Court will be responsible for this unless the defendant’s solicitor has indicated otherwise.

Question 72

Counterclaim

Answer 72

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.

Question 73

Extending the time limit for defendant

Answer 73

With agreement from the other parties, this can be extended by a maximum of 28 days, so defendant has a total of 56 days from the date of service of the particulars of claim. Any further extension needs court’s permission.

Question 74

Default judgement

Answer 74

CPR includes mechanism whereby C can force the issue,
known as a judgment in default (of the defence) or a default judgment.

C obtains a judgment without there being any consideration of the facts involved, straightforward paper exercise

Question 75

Procedure for default judgement

Answer 75

Claimant will make an application under CPR Part 12 + this will require them to complete a request for default judgment.

To succeed, they must satisfy the court that:

• the particulars of claim have been served upon the defendant; and
• the defendant has not filed an acknowledgement of service form or a defence within the relevant time period.

If pending application by the defendant for summary judgment or to have the claimant’s statement of case struck out, will not obtain default judgement.

Question 76

Procedure / categories for default judgement

Answer 76

App for default judgment 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:
* indicate the date payment was due;
* calculate an up- to- date total for the interest claimed; and
* state a daily rate at which interest accrues.

Once final judgment has been entered, the payment will usually be required within 14 days.

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).

Question 77

Setting aside default judgments

Answer 77

Having initially ignored the proceedings, if claimant enters default judgment, defendant must 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.

Question 78

Setting aside default judgments- mandatory vs discretionary grounds

Answer 78

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.

OR DISCRETIONARY:
The court also has the power to set aside a default judgment in circumstances where the defendant:

• has a real prospect of successfully defending the claim; or
• there is some other good reason why the defendant should be allowed to defend the claim: ie D 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.

Court will also take account of the promptness of the defendant’s application to set aside – essential that D 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.

The application will need to be supported by evidence to show X was abroad and that he acted promptly when becoming aware of the default judgment.

Question 79

Form for default judgement application

Answer 79

App is made by filing an application notice (form N244), usually supported by a witness statement outlining defendant’s submissions.

Question 80

Potential orders from default judgement

Answer 80

In determining application, 3 possible orders judge can make:
(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.

Question 81

Costs for default judgement

Answer 81

• 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.
• 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.
• 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.
• If the application fails, the defendant will pay the claimant’s costs of the application.

Question 82

Discontinuing proceedings

Answer 82

Claimant can discontinue at any time during the proceedings.

Permission not usually required unless in certain circumstances ie court has granted an interim injunction.

If multiple claimants, claimant may not discontinue unless every other party consents in writing or the court gives permission.

The claimant may discontinue the claim against all or any of the defendants.

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.

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 + vital that the solicitor explains this to the client.

Question 83

Pre-action settlements

Answer 83

Where settlement reached prior to issue of proceedings, prospective C will not be entitled to recover legal costs unless 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.

Question 84

Settlements reached after the issue of proceedings

Answer 84

If a settlement is concluded after proceedings have started, it is preferable for this to be recorded in a court order or judgment; enforcement proceedings may be commenced to recover any monies due under the settlement (including costs) should the agreement not be honoured.

Question 85

Consent orders

Answer 85

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.

The effect of the Consent Order is that, provided Kanji pays £12,000 to QFL by the stated deadline, the claim will come to an end. However, if the monies are not paid, interest will
start to run on the sum and the claimant can take enforcement action. The reference to the claim being stayed means that the proceedings will be ‘paused’ until the agreement is put into effect, allowing the claimant, Quality Furniture Ltd, to return to court should the defendant fail to meet his commitments. It is also clear, from paragraph 3 of the Consent Order, that each side has agreed to pay their own costs.

Only terms that are within the powers of the court to order may be agreed, for example the payment of a sum of money. Furthermore, the terms of a consent order are open to
public inspection. Thus, if the parties want any terms to be confidential and/ or are beyond the powers of a court to order, they should use a special form of consent order known as a Tomlin order.

Question 86

Tomlin order

Answer 86

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.

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.

Question 87

Disputing court’s jurisdiction

Answer 87

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.

• 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 - proceedings come to an end.
• 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.

Question 88

A partnership wishes to commence proceedings against a former customer. The firm has a solicitor acting for it.

Which of the following correctly describes how the statement of truth should be completed in the claim form?

Answer 88

The statement of truth can be signed by a partner, or a person having the control or management of the partnership business, or the partnership’s solicitor.

The statement of truth can be signed by any partner or a person having the control of management of the business. Additionally, the partnership’s solicitor may sign the statement of truth.

Where a solicitor signs a statement of truth they are deemed to have their client’s authority to do so and no separate written statement to that effect is needed.

Question 89

How can a party be added/removed/substituted?

Answer 89

• How can a party be added, removed, or substituted?
  1. Who can apply?
   existing party or a person who wants to become a party
   NB. none can be added or substituted as a claimant unless their consent in writing has been filed at court
  2. Is permission required?
   Claim form already served? YES
   Claim form not served? NO
  3. Are there valid grounds for the application?
  1. Within the limitation period:
   It must be either desirable:
   to add a new party to resolve a matter in dispute;
   to remove a party; or
   to substitute a party where the existing party’s interest or liability has passed to them
  2. Outside the limitation period:
  1. Proceedings started within the limitation period, and
  1. Original party named by mistake; or
  2. Original party died / bankrupt and interest/liability has passed, or
  3. Claim cannot properly be carried on without the new party