Litigation
England & Wales
By reason of what follows, all references to ‘England’ may properly be taken to include Wales.
All references to ‘English’ may also properly be taken to mean Welsh.
The Courts of England and Wales place considerable emphasis on the pragmatic expeditious and cost-effective resolution of any Court Business that comes before them.
The origins of this outlook are to be founded upon two golden strands of law in England and Wales:
- The Common Law
It is so-called because it was ‘common’ to all of the King’s Courts across the English and Welsh domains. Its beginnings are rooted in a legacy of legal decisions which began following the Norman Conquest in 1066.
Prior thereto, justice was dispensed in rudimentary and often arbitrary fashion by public assemblies. In the case of conflicting claims and if unable to reach a decision, an assembly might require an accused to establish their guilt or innocence by carrying a red-hot iron or snatching a stone from a cauldron of boiling water to test their credibility. If the Defendant’s wound healed within a prescribed period, they were released as innocent; if not, execution ordinarily followed.
Unlike continental civil law, the English system is not based upon any particular set of texts. Rather the workings of the Common Law are best defined as ‘tradition expressed in action’.
Under Henry II, judges roamed the Country to determine legal disputes across the regions; in each case their decisions were recorded and published. Hence the practice developed whereby previous decisions (precedents) would be cited in argument for the Court and became persuasive authorities for later disputes based upon similar facts.
By these means, the risk of inconsistent decisions was avoided. There consequently developed over centuries a consistent body of case law to promote the resolution of legal conflicts and upon terms underpinned by a deepseated notion of justice.
- Statute Law
This comprises legislation passed by the Government of the day which regulates public and commercial affairs and obligations. Each such law must be contained within an Act of Parliament.
- Approach Today
Save and except for urgent matters which may require immediate judicial intervention recent reforms to English law mean that civil disputes must now follow three distinct stages:
- Protocols
All parties to a dispute must adopt a protocol. That is, they must correspond with each other and provide to the other detailed information about their case or claim. By these means, and at the end of the protocol process, each side will be aware of the relative strengths and weaknesses of their positions. Correspondingly, they will be in an improved position to try and settle their differences.
- Alternate Dispute Resolution (ADR). Following the conclusion of the protocol process each party must seriously examine and pursue ADR. This may take one or more of many paths. For instance:
- Mediation:
Where a third party attempts to bring the parties together on commercial common ground to settle their argument
- Independent Neutral Evaluation (INE):
The means whereby the papers are put before a third party. That third party in turn considers the evidence as then it is and provides an assessment with reasons as to what a notional court might be likely to do in the event of a trial. All sides agree to be bound in advance by this evaluation and once delivered to implement the terms of it.
- Without Prejudice commercial negotiations between the parties and their advisers. Such negotiations are confidential to the parties and their advisers and as such not discloseable to a Court – unless there is compromise and afterwards there is an issue over the terms of the settlement itself.
- A formal system of offers made under the Civil Procedure Rules (either Part 36 or Part 44) which seeks to resolve all or part of the items in issue and may well carry cost consequences arising from the refusal of an offer.
- Arbitration:
A means of seeking to achieve resolution with procedures not so different from those of the English Courts but possibly a little less formal and flexible in terms of evidence, preparation and hearing.
- Unless the commercial agreement in dispute happens to provide alternate means of resolution (for instance, Arbitration) only once the protocol and attempts at ADR have concluded might the parties (bar any question of limitation of actions) run to the cost of litigation. ‘Litigation‘ means the commencement of any legal proceedings in England before any Court, Tribunal or similarly appointed body.
- Jurisdictions & Structure
Of all litigation in England is in within either the High Court or local County Courts.
- For claims of over £50,000 there is an automatic right to sue in the High Court.
- If the sums involved fall between £25,000 to £50,000 the case would ordinarily be heard within a local County Court. However if the dispute is of particular complexity or contains questions of law or novelty, then it may be commenced within the High Court.
- All claims involving amounts below £25,000 must be commenced within a local County Court.
- There are one of three tracks to which each case is allocated.
Each track defines the procedures which will need to be followed peculiar to that track in order to bring the case to trial failing compromise beforehand.
- Small Claims Track
For claims of £10,000 or below (and for minor personal injury claims) allocation is to the Small Claims Track. This category of claim is relatively informal. This is within the County Court.
- Fast Track
A claim will be assigned to the Fast Track if trial is likely to take one day or less, the value of the dispute is somewhere between £10,000 – £25,000 and expert evidence is not needed. The Court retains discretion to order a costs contribution to be made by the losing party to the successful party so awards may be limited when it comes to the actual costs of the trial. This would normally be a County Court case.
- Multi Track
A claim will be assigned to the Multi Track where the dispute is over £25,000, the case is one of weight and complexity and where the likely length of trial is thought to be in excess of one day. In such cases, expert evidence is often needed. The High Court will normally handle this category of claim; however a County Court may do so too.
- Costs
The High Court and the County Courts retain a limitless authority to decide all question of costs and upon whatever terms the individual judge might wish. This may take the form of costs capping; awarding costs for success on any particular issue; depriving a successful party of all or part of their costs because of unreasonable litigation conduct beforehand (for instance, failure properly to pursue a protocol or engage in ADR).
In Multi Track cases and well before each side begins to commence their preparations for trial, the Courts will require all sides to produce Costs Budgets. These are scrutinised at an intermediate hearing. The Court’s duty is broadly to fix each side’s costs well before trial. This process entails the Court’s approving categories of work and imposing reductions or financial limits.
By these means, all sides will be aware – at a relatively early stage of the litigation – of the overall costs involved on each side.
Departure from a Court-approved Costs Budget can be rare. It is permissible subject to no more than a 20% variance either way (up or down). However a good reason must always be shown.
- High Court Divisions
The High Court is divided into sub-divisions which compromise:
- The Queen’s Bench Division (QBD)
This handles the majority of Common Law disputes, including claims for breach of contract and negligence. Business disputes ordinarily fall within a sub-division of the QBD: This is the Commercial Court.
- Chancery Division (CHD)
This Court deals with claims of a more expansive, discursive or discretionary nature involving particular findings of fact and giving rise to possibly complex arguments of law. It will conduct claims involving breaches of trust and claims for equitable rights. The sub-division of Chancery is the Companies Court, which as its name suggests – conducts all corporate disputes.
- The Family Division
The Family Division has jurisdiction to deal with all proceedings in England for divorce, nullity or separation and to hear and determine financial remedy claims arising therefrom. The English Family Court has wide-ranging powers (so as to do financial justice as between divorcing husband and wife or same-sex partnerships). It might allocate or part of a spouse’s or partner’s pension fund or business respectively to the other spouse or partner and thus override strict legal rights of ownership.
- Appeals
There is usually a right of appeal from a decision of a judge of a County Court to the High Court and thence from the High Court to the Court of Appeal. Matters may not stop there. An appeal may also lie from the Court of Appeal to The Supreme Court, the highest Court in England.
- Insolvency
Proceedings may be taken by creditors in the High Court on the grounds of a debtor’s insolvency or that of a company.
- Individuals:
It is open to a creditor to render a private individual bankrupt if they cannot meet their rightful debts and are unable to come to a commercial plan for their repayment. Such a process begins with the service of Statutory Demand. Unless the Demand has been invalidly drafted, or there is a genuine triable question over say quantum, then prima facie the Statutory Demand may be enforced – if unsatisfied after 21 days from service – by way of bankruptcy proceedings.
Accordingly, it follows that if a debtor served with such a document considers that they have the makings of a defence on the merits, they must act with alacrity. An application must be made to the Court to set aside a Statutory Demand if the alleged creditor is deaf to entreaties to stay their hand.
- Companies:
Similarly, a company served with a Statutory Demand may be exposed to a winding-up order (effectively putting it out of business) unless there is a genuine triable case in debt, the Demand has been invalidly drafted or for instance a question of law has arisen. Failure to satisfy a Statutory Demand served upon a company (or make arrangements with the creditor for repayment of an admitted debt) will entitle the creditor to present a petition to wind-up the company within 21 days after service.
If the debtor company believes that it may have a genuine case to contest, then it must act with utmost expedition. One remedy available to it is to apply to the High Court for an Order (injunction) to prohibit the potentially damaging consequences of the advertisement of an intended winding-up petition or its issue.
- Enforcement – Other Means:
There are additional ways open to enforce a judgment or admitted debt. This may the take the form of a Charging Order against registered land owned by the judgment debtor; a Garnishee Order requiring the debtor’s bank to pay any sums held therein to the creditor; or sale and seizure of a debtor’s assets.
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This Article contains views founded upon the interpretation of current legal practice and procedure. However, each case is fact-specific and much may turn upon the individual nature of the case or changes in the law or differing judicial interpretations.
Richard Peter Tymkiw LLB (Hons) 