Jul 24, 2014

Guide to Litigation

What is litigation?

Litigation is a formal method of solving disputes between 2 or more parties who cannot agree the best way to solve a dispute.

Generally speaking all litigation is brought before the court, however mediation or Alterative dispute resolution (ADR) can also play a part in resolving disputes.

The most common reasons for litigating is to recover debts, resolve contractual disputes, pursue compensation claims for injuries, contesting wills and retaining possession of property.

Court System in England and Wales

There are over 200 county courts in England and wales. There are also District Registers of the High Court, which function for the more complex cases.

Recent changes to the court system made by the government is that all claims are now issued from the Salford Business Centre (Northampton County Court Money Centre). When issuing a county court claim a fee is payable, the fee depends on the value of the claim, fee reductions are available to people who are on low income or benefits.

Solicitors are normally instructed to act on behalf of litigants who want to pursue a claim. However Barristers can also act on behalf of claimants and conduct litigation, so long as they hold a direct access certificate.

Individuals can also represent themselves, if they do not wish to instruct a Lawyer.

Before Litigation (Pre Action and the Protocols)

Most, but not all areas of law have a pre action protocol. This lays down the framework on how to conduct negotiations between the parties prior to the commencement of county court proceedings. If the matter arises from an accident involving injury, the pre action protocol for personal injury applies (there are several so it’s important to understand which one to use). If the dispute arises from a construction matter, then the pre action protocol for construction and Engineering disputes applies. There is also a specific protocol for professional negligence actions. All the protocols can be found on the justice.gov.uk website.

It is important to note at this stage that statutory limitation on the time you have to bring a claim can affect the success of a claim.

Once you have identified which is the correct pre action protocol, you will send a letter before action (letter of claim) to the defendant (s) who you consider to be the fault party. If there’s more than one defendant, each defendant must be notified with a letter of claim. If you are aware of an insurer who is likely to have a financial interest in the claim, a letter of claim should also be sent to them.

The letter of claim, will contain a detailed explanation of the reasons why you allege that the defendant is to blame for the dispute.

The letter of claim, will contain a detailed explanation of the reasons why you allege that the defendant is to blame for the dispute. You may also want to request within the letter, disclosure of certain information to assist you as part of the dispute.

Once the defendant has received the letter of claim, they should acknowledge it and respond within a specified period detailed within the pre action protocol. This is normally within 21 days, but this does vary depending upon the type of claim.

It should be noted that correspondence and discussions between parties can drag on, there is no set definitive approach to pre action discussions. Liability may be denied and the defendant may make it difficult to progress matters by failing to disclose certain documents etc. if no progress is being made then it may become necessary to issue an application for pre action disclosure, seeking a court order for disclosure of information by the defendant. This is a formal procedure and it can have cost consequences to either party (see the Civil procedure Rules part 23).

Issuing the claim

If the dispute does not settle in accordance with the pre action protocol, then it will become necessary to issue county court proceeding against the defendant(s). Before doing this you will need to assess whether the claim has a good prospect of success. In addition you must also ensure that the correct defendant(s) are identified and named on the claim form.

When issuing the claim, it is also important that the claim is issued from the correct court i.e. a construction dispute must be issued out of the Construction and Technology court.

Once the claim is filed at the court with the appropriate fee, then the defendant will have 14 days to acknowledge the claim and up to a further 14 days to file a defence. It is possible to extend this period by agreement of the parties, subject to the court being made aware of the extended time period.

If the defendant does not respond to the claim, the claimant can request from the court that judgment in default be entered. This means that the court will at a future date decide the amount of damages the claimant receives.

This is the stage when the defendant named in the proceeding is likely to instruct a Lawyer to represent them, if they have already done so.

Defence

The defendant can if they choose to do so, file a defence in response to the claim. The defence normally sets out the response to the claimant’s allegations, although a defence can also admit liability or admit part of the claim and dispute the rest.

Directions / Case Management Conferences

If the defendant files a defence to the claim, the court will issue to each party a directions questionnaire. This document is to be completed by both parties within a specified time by the court. The claimant will need to pay a court fee.

The court encourages the parties to negotiate at all times and its best practice to discuss case management directions with the defendant or their representatives with a view to agreeing them before the proposed directions are filed at court.

If the case is of high value or complex, then it’s best to notify the court when filing the directions questionnaire and request that the matter be listed for a case management conference. These hearing are at court in person, but it can also be conducted over the telephone. The hearing will decide certain matters relevant to the claim, such as track allocation, expert evidence, disclosure etc.

The court will then make an order detailing all the directions in the case, which must be complied with, failure to comply with directions will result in sanctions imposed by the court.

Cost Budget Hearing (high value claims only)

If the claim is over the value of £25,000 or is complex and is likely to require several experts to comment, then there is a requirement to file and serve a cost budget, which sets out the past and future costs of the case. This budget will need to be approved by the court and the ‘cost budget hearing’ will normally take place at the same time as the case management hearing, following the filing of the direction questionnaires.

Disclosure

This is the procedure whereby the court will order the parties exchange evidence that they are seeking to rely upon in support of the claim or defence. There is an ongoing duty to disclosure relevant information. This prevents a party springing evidence at the last minute and gaining an unfair advantage.

For additional information regarding disclosure please refer to CPR 31.
Withholding documents which aren’t privileged can result in cost penalties. Disclosure must be done in the correct format.

Expert Evidence (reports)

Procedure relating to expert evidence is contained in CPR 35. Parties may want to introduce an expert’s report in support of their argument. The parties must seek permission from the court to rely upon the expert’s reports. The report is to assist the court in making a determination on liability or value for example, Doctors reports in personal injury cases, architects reports in a construction dispute.

The expert can be instructed on a joint basis or single basis, this depends on the extent of the dispute. The Experts report is totally independent and addressed to the court. Each party can put formal questions to the expert, pursuant to CPR 35, subject to the court’s permission to seek clarity on a specific point detailed in the expert report.

The court may also order the experts (if more than one) to meet and discuss the issues in the case and to prepare a joint report setting out the areas of agreement and disagreement.

Witness Statements

Witness statements allow the parties to have their formal say in proceedings. There is a prescribed format on how the witness statement should be presented, please refer to CPR 32. The witness statement is the evidence in chief, which is an important document. This will contain all relevant information about the claim and the losses incurred.

Witness statement must be exchanged at the same time to avoid one party having an advantage over the other, failure to disclosure a witness statement may result in the claim becoming hopeless.

The individuals or company who filed a witness statement can be called to give oral evidence at a trial or hearing.

Interim Applications

From time to time within the litigation process, parties may need to issue an application to the court to seek permission to obtain certain objectives or to order a party to do something.

This is dealt with on a case by case basis.

The Trial

This is the final hearing and the end of the litigation process. The matter will only proceed to a trial if the parties cannot agree a negotiated settlement.

A Judge sitting at court will makes their decision based on the facts and evidence presented by the parties. The onus is upon the claimant to prove their claim.

The claimant and defendant will be asked to give oral evidence and the court may also want to hear from the expert in the case. After the evidence is considered the judge will make his or her decision based on the balance of probabilities. Whoever presents the most favourable evidence is likely to succeed, however the credibility of the individuals involved in the case may have a bearing on the outcome.

Judgment

After the Judge has heard the evidence, they will make their decision. There are several remedies available by the court when making its decision. It could award damages as it sees fit. It can determine liability, in full and in part. It can order specific performance of a contractual obligation or an injunction. The judgment will reflect the type of action before the court and the remedy what the successful party as requested.

Costs

The loser normally pays the successful party’s costs. The court will normally either summarily assess the winner’s costs on the day of the hearing after the judgment or order the costs element to a detailed assessment hearing, which will be listed at court at a later date.

The court will take into consideration the value and complexity of the claim when awarding costs. Courts have an obligation to ensure that costs are proportionate. This can have a particular effect on fast track claims, (those below £25,000 in value). If the matter is allocated to the mutli-track (over £25,000) then the claim would have been subject to a costs budget, prior to the trial which would have already been approved by the court.

The court will also consider the parties conduct and a party which has not acted correctly, such as complying with a court order or failing to negotiate/mediate may have their costs reduced.

In personal injury claims only, even if you are not successful with the claim, you will not be liable for your opponent’s costs, however this is subject to the court not finding that you acted dishonest or fraudulent. If the court did find that was the case you may be liable for the opponent’s costs of defending the action.

Enforcement

When the court makes its decision the judge will order one or more party to pay damages and costs by a specified period of time. Failure by the losing party to comply with the court order for payment can result in enforcement action.

Please see our guide to enforcement for further information.

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