So, your business has become involved in a dispute. What can you expect? How long will it take? What will be expected of you?
This guide will answer these queries by giving a brief overview of the litigation process in relation to a fictional dispute about the non-payment of an invoice. If you have specific queries or concerns, please get in contact with one of our specialist commercial dispute resolution solicitors for advice in Cambridge, Bury St Edmunds, Ipswich and Norwich.
For more information or to set up an initial consultation:
- Give us a call on 0330 404 0767; or
- Fill in our simple online enquiry form and we will be in touch shortly.
Who’s Who?
- The Claimant – the person/company who is bringing the claim. The Claimant used to be called the “plaintiff” and can sometimes be referred to as the “Applicant” in some forums.
- The Defendant – the person/company who the claim is brought against. The Defendant can also be referred to as the “Respondent” in some forums.
There can be numerous Claimants and Defendants in any action; it is not always one vs one.
Together, they are referred to as “the Parties”.
Stage 1: The Dispute Arises
Before a claim is formally initiated (also known as “issuing proceedings”), the potential parties to the dispute will have communicated with one another about what issues have arisen and they will try to resolve it.
Typically, this correspondence will be informal. For example, if the Claimant is looking to enforce an unpaid invoice they have raised against the Defendant, they will have written to the Defendant to ask for payment. The Defendant will have replied to explain whether they will pay the invoice. If they don’t intend to pay it, they will explain what their reasons are for not paying, or only making a part-payment.
The parties should try to resolve their differences at an early stage. If they can’t, they should take legal advice and consider their next steps.
Stage 2: Pre-Action Letter
If the Claimant’s claim has merit and having considered the costs vs benefits of instructing a firm of solicitors to recover the sum of the invoice from the Defendant, the Claimant will send the Defendant a “pre-action letter”, also known as a letter before action.
This is a formal letter to the Defendant setting out the legal basis for the Claimant’s claim. It will usually make reference to the Civil Procedure Rules which govern disputes. If you have received a letter like this, it is important that you take legal advice straight away as there are strict time limits within which the Defendant must respond to the letter and how.
The Defendant will need to send a formal Letter of Response (also known as a Letter of Reply).
Stage 3: Issuing Court Proceedings
If the Claimant and Defendant can’t reach an agreement, the Claimant could start the claim in Court, known as “issuing proceedings.” This is a significant stage in the dispute.
Once proceedings have been issued, it becomes a claim, and the Court’s rules about costs will come into force.
The Claimant will need to prepare their formal legal arguments by using a Claim Form and filing Particulars of Claim, which will set out their arguments to the Court. Collectively, these are also referred to as “pleadings” or “statements of case”. The Particulars of Claim will usually contain similar arguments to the Pre-Action Letter.
It is important that the Defendant replies to the Particulars of Claim quickly, as they will only have 14 days after service of the Claimant’s statements of case to either submit their defence or file an acknowledgement.
Stage 4: Directions and Allocation
After the Defendant has submitted their Defence, the Court will send out a Directions Questionnaire to get some practical information from the parties like how many witnesses will attend Court, what the value of the dispute is, how many days the parties think the trial will take, what seniority of judge will we need, etc.
Upon receipt of the questionnaires, the Court will decide which forum will hear the dispute, in what manner (over the phone, on paper, or in-person), and when.
Stage 5: Costs Budgeting
Depending on the value of the case, the Court will ask for both parties to detail what they think their legal costs will be for bringing and/or defending the case.
The Court may ask for a costs and case management conference (CCMC for short) either in-person or via telephone so the parties can justify why their costs are what they are. The Court will then set a costs budget for each party.
Stage 6: Trial Hearing
Eventually, a case will reach a hearing. Depending on the complexity of the case and the number of days required out of the Court’s diary to hear it, this hearing may not happen until 18 – 24 months after proceedings are issued. The vast majority of cases do not reach this stage because of the significant amount of costs that can build around preparation and attendance at a trial.
The hearing will involve barristers, solicitors, witnesses, and experts from both sides. The Claimant and the Defendant will have the opportunity to set out their legal case in front of a member of the judiciary (typically a Master or a Judge). After the hearing ends, the Judge will take time to write up a judgment.
The judgment may take weeks, sometimes months, to be given to the parties (known as “handing down”).
The judgment will explain who wins and why.
The decision is final unless there is a right to appeal.
Stage 7: Post-Hearing
After the hearing, the case will come to an end, and generally, the loser will need to pay the winner’s costs. How much this will be and when it will be paid is a debated and complex issue.
After payment is made, the matter is considered settled.
Commercial Dispute Resolution Settlements
The vast majority of cases do not make it to a hearing because of the costs and risk involved. Both parties are actively encouraged by the Court to frequently explore settlement, whether that be through “without prejudice” conversations, mediations, or by making offers to one another. The parties can settle at any stage and for any amount, although, they will need to consider the costs consequences of doing so.
Contact our specialist Commercial Dispute Resolution Solicitors in East Anglia
For practical legal advice regarding a business dispute, as well as any other commercial law advice you require to achieve your goals, please get in touch with our specialist Commercial Litigation Lawyers in Cambridge, Bury St Edmunds, Ipswich and Norwich.
To set up an initial consultation:
- Give us a call on 0330 404 0767; or
- Fill in our simple online enquiry form and we will be in touch shortly.