This guide will take you through the litigation process with Slater Heelis.
slater heelis
exceeding expectations A guide to litigation
The Litigation Process
This guide explains the different stages of how a claim reaches a trial, at which a Judge decides whether it succeeds or fails. Each claim is different and the individual circumstances will affect the litigation process but claims generally follow this process.
It is important to note that a claim can settle at any point.
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The Litigation Process
Pre-Action Protocols
Court Action
Post Judgment
Letter of Claim
Statements of Case
Costs Order
Letter of Response
Case Management
Enforcement
Evidence
Trial
Judgment
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The Overriding Objective is set out in the Civil Procedure Rules (CPR) which are the rules of court which govern the litigation process in England and Wales. All parties must abide by the Overriding Objective and Judges manage and control litigation by reference to it. In essence, • Judges must enforce compliance with the CPR and court orders • Parties must pursue a claim or defend one in a way that is proportionate to the amount of money involved and the complexity of the issues. Judges can impose penalties on any party that does not comply with the court rules or orders. These penalties can include costs sanctions or striking out part or all of your evidence or claim. Costs incurred in pursuing or defending the claim must be proportionate. If the Judge considers some of the costs are not, they cannot be claimed from the losing party although proportionate costs can.
The Overriding Objective
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Where possible, you are expected to exchange information and documents relevant to the dispute before proceedings are even commenced. The aim is to avoid the need for legal proceedings entirely or at least reduce the areas of dispute. A Judge can penalise a party with adverse costs orders for failure to follow such protocols. There are a number of protocols dependent on the type of case and involve the potential claimant sending a ‘letter of claim’ to the potential defendant setting out the details of the claim and what is being sought which is usually financial compensation. The key documents should be provided at the same time and the defendant invited to engage in a form of alternative dispute resolution procedure other than court, such as mediation. The defendant ought to acknowledge receipt of the letter of claim within a few weeks and provide a detailed letter of response within several more weeks.
Pre-Action Protocols
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Court Action
Statements of Case The claimant and defendant must provide details of the claim and defence which they want to pursue. There are a number of documents and together they are called ‘statements of case’. The subsequent stages of the litigation (disclosure of documents, statements from witnesses of fact and reports from experts) involve the parties attempting to prove their claim or defence to the required standard which in civil cases is the balance of probabilities, or ‘more likely than not’. Statements of Truth Each statement of case must be verified by a statement of truth. This confirms that the person making the statement believes that the facts stated in the document are true. Statements of truth must also be signed in each witness statement and certain other documents filed in proceedings. A party who signs a statement of truth without an honest belief in the truth of the facts being verified could be found to be in contempt of court which, in extreme cases, is punishable by a custodial sentence. A failure to verify a document can mean that the party will be unable to rely on the document as evidence of any of the matters set out in it or that a statement of case is struck out. The statements of case must be sent to court (filed) and to the other parties (served).
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Claim Form and Particulars of Claim
The defendant must file a defence: • Within 14 days after service of the particulars of claim, if they have not filed an acknowledgment of service. • Within 28 days after service of the particulars of claim, if they have filed an acknowledgment of service. The parties may agree an extension of time of up to an additional 28 days for filing the defence. If the defendant wants more time, they will need to apply to court. If a defence is not filed in time or at all, the claimant can apply to the court for judgment in default of defence.
A court claim is started by sending a claim form to court to be officially stamped and allocated a unique claim number. A fee must be paid which varies depending on the amount in dispute. For example, if the claim is between £10,000 and £200,000 the court fee is 5% of the claim. For claims over £200,000 there is a flat fee of £10,000. The claim form contains very brief details of the claim and the remedy being sought, for example financial compensation. Once stamped and a claim number allocated, the claim form is usually sent to the defendant as soon as possible although generally there is 4 months in which to do so. The particulars of claim set out full details of the claim, including the alleged facts on which the claim is based. The particulars of claim usually accompany the claim form but can be served up to 14 days later. Acknowledgment of Service The defendant must file an acknowledgment of service of the particulars of claim within 14 days of receiving it. This is done via a specific form provided with the claim and the defendant must indicate whether they intend to defend all or part of the claim. They may also indicate that they intend to contest the court’s jurisdiction to hear the claim. Defence Unless the defendant admits the whole of the claim, they must file a defence. In the defence, the defendant must state which allegations in the particulars of claim they, • Admit; • Deny; or • Neither admit nor deny but require the claimant to prove. Where the defendant denies an allegation, they must state reasons for the denial and put forward their own version of events. This is extremely important. It is not sufficient simply to deny an allegation.
Counterclaim and Additional Claim
Depending on the circumstances, the defendant may make a counterclaim against the claimant, or an additional claim against another party to the claim or a third party. For example, they may make a claim for a contribution or indemnity from another party. A counterclaim or an additional claim may be served with the defence without the court’s permission or at any other time with the court’s permission. Reply The claimant may file a reply to the defence but is not obliged to do so. If not, it will be assumed the claimant does not accept what is said in the defence. If a counterclaim is served, the claimant must file a defence to the counterclaim within 14 days of service of the counterclaim. The defendant can serve a reply to the claimant’s defence to counterclaim but, again, they do not have to. A party may seek to amend its claim or defence at any time although it is likely to require the court’s permission to do so particularly if the amendments are late in the process or controversial. If the party receiving a statement of case requires clarification or further information, it can request that the party who sent the statement of case do so or failing that can ask a Judge to make an order that the clarification and/or further information be provided.
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Judgment Before Trial
Summary Judgment
This is where the merits of the case are assessed early without full trial. Both the claimant and the defendant can apply arguing that: • The claim or the defence has no real prospect of succeeding and • There is no other compelling reason why the claim or issue should be disposed of at a trial.
It is sometimes possible to get a final decision without following the whole process to trial.
Default Judgment
If the defendant fails to file a defence within the relevant time limit, the claimant may obtain a judgment in default of defence. This judgment can be set aside but there must be a good explanation why a defence was not filed in time or at all. Judgment obtained in these circumstances is due to procedural failure by the defendant rather than based on any assessment of the merits.
Strike Out
The court has the power to strike out a party’s statement of case (including a claim form, particulars of claim or defence), either in whole or in part, if one of the following applies: • The statement of case discloses no reasonable grounds for bringing or defending the claim • The statement of case is an abuse of process • There has been a failure to comply with a rule or court order.
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Case Management
The parties must provide information to the court about how the case is likely to progress and suggest a timetable for the various steps to trial for the court to consider and approve. For example, the number of factual witnesses each party is likely to rely on and whether expert evidence is required and why. The parties must also provide costs information to the court in a costs budget (referred to as Precedent H) which breaks down the costs already incurred and the costs it is anticipated will be incurred and for which stages in the litigation in the future. At the CMC hearing, the Judge considers the timetable and costs information provided by the parties. The Judge makes an order setting down the timetable for the required
steps to trial and either approves or reduces the costs forecast in the budget for each of the future stages if it considers it appropriate. This is the first time a Judge can take control of the case and can order a further CMC if necessary. The parties must also provide costs information to the court in a costs budget which breaks down the costs already incurred and the costs it is anticipated will be incurred and for which stages in the litigation in the future.
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Evidence
To win, a claimant must prove their case on a balance of probabilities: it is more likely than not. Evidence is obtained to support each of the essential ingredients of the claim. The same applies to a defendant and their defence. The evidence usually comprises: • Documents • Witness Statements from factual witnesses • Expert reports.
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Disclosure of Documents Disclosure is the process by which one party shares the documents it has and which are relevant to the dispute whether or not they support or undermine either party’s case. This may include documents that are harmful, sensitive or confidential but does not include those which are protected or privileged from disclosure which includes our advice and settlement offers. It is important to identify and preserve relevant documents from the outset which involves identifying who might have them and where they are stored. Each party lists the documents and then the other can ask for copies of some or all of them. Sometimes it is important to see the originals and this can be arranged. Witness Statements This is a written statement of the factual evidence that the individual can provide in relation to the dispute. These statements are exchanged with the other party in advance of trial. A witness statement must: • Be in the witness’s own words, if practicable • Indicate which of the statements in it are made from the witness’s own knowledge and which are matters of information or belief and state the source of those matters • Include a statement of truth. A witness may be called to trial to be cross-examined on their statement.
Expert Evidence Expert evidence is used where the case involves matters on which the court does not have the requisite knowledge such as accounting, valuations or engineering matters. The court’s permission to rely on expert evidence is required and the court will decide the parameters of their evidence and the costs which can be incurred. The court allows each party to have their own expert or sometimes orders the parties must use the same expert depending on the circumstances. The expert’s duty is to the court and not to the party or parties even though they are paying the expert’s fees. Expert evidence is usually given in the form of a written report but they can be required to attend trial and be questioned on their report.
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Trial
Barristers can also help with drafting the claim or defence in accordance with strict court rules as well as advising, in more complex cases, on evidence. The length of the trial will depend on the complexity of the legal and factual issues to be resolved and the number of witnesses permitted to give evidence. The trial will be held in public, unless the court has ordered that it may be held in private because it involves matters of a confidential nature and publicity would cause harm or damage. The trial will be heard by a single Judge alone except in some fraud and defamation cases.
Once the trial dates are fixed, it is difficult to change them without a very good reason. Therefore, although many cases settle, it is important to be properly prepared in case the matter does proceed to trial. Sometimes the Judge orders that a pre-trial review be held to ensure everything is ready for trial or, if not, ensure that it will be. Trial bundles are usually prepared by the claimant which include all the relevant court papers and evidence for use by the Judge, barristers, witnesses and parties at trial. Barristers are instructed to represent the parties at trial. They are trained to present the parties’ cases to the Judge and cross examine witnesses.
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Judgment
The judgment may be given immediately after the trial but is often reserved to a later date, particularly in complex matters. This means that the parties will not learn the Judge’s decision until sometime after the end of the trial. The Judge also decides who should pay costs. The judgment, in certain cases, may be reported depending on the hierarchy of the court hearing the case and, if so, will be available to the public. It is the reported cases, from past cases (known as common law) in addition to legislation made by government, that influence the Judge’s decision making when passing judgment.
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Post Judgment
Costs Orders
Where fixed costs do not apply, the actual amount of costs to be paid is subject to an assessment process, unless the parties can agree the amount which will be paid. The standard basis of assessment is to allow costs to be recovered that were reasonably incurred, reasonable in amount and proportionate to the matters in issue. However, costs which are disproportionate in amount may be refused or reduced even if they were reasonably or necessarily incurred. Costs in excess of those in the costs budget are also likely to be refused without very good reason.
Costs consist of court fees, solicitors’ and barristers’ fees, expert fees and other third party fees such as Land Registry or Companies House fees. The general rule regarding costs in litigation is that the loser is ordered to pay the winner’s costs. However, the court has the power to make a different costs order and will take into account factors such as the conduct of the parties and offers made. It is unusual for a party to be able to recover all of the costs incurred in the litigation. For some cases, the costs which are recoverable from an opponent are fixed by the court. The applicable fixed costs vary depending upon the amount in dispute and the complexity of the case.
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Enforcement
Once judgment has been obtained, the judgment debtor should pay within the timescale imposed. If payment is not made, there are a number of enforcement procedures available to the judgment creditor to enforce payment. Examples include: • A charging order over property owned by the judgment debtor • Execution against goods owned by the judgment debtor, where an enforcement officer is empowered to seize and sell a judgment debtor’s goods
• Third party debt order where a third party is ordered to pay the judgment creditor sums due or belonging to the judgment debtor (e.g. the judgment debtor’s bank or the judgment debtor’s creditors) • An attachment of earnings order, under which a proportion of the judgment debtor’s earnings is deducted by their employer and paid to the judgment creditor until the judgment debt is paid. The appropriate procedure will depend on the circumstances, including the nature and location of the debtor’s assets.
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It is important to keep settlement in mind at all stages of the proceedings. The CPR require parties to do so and, although ADR is not compulsory, Judges can impose cost penalties on parties for unreasonably refusing to participate in ADR. ADR are ways to resolve disputes outside the court process such as mediation. Offers of settlement can be made by either party at any time before or during the proceedings. The earlier in the process that settlement can be reached, the greater the costs savings. As well as being effective in their own right, offers can be a powerful tactical move if made in accordance with Part 36 of the CPR, known as Part 36 Offers. Specific costs penalties can come into play for failing to accept such an offer.
Settlement Offers and Alternative Dispute Resolution (ADR)
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Get in touch with our team
With specialists across all fields of law, we will help you achieve the results you want.
intouch@slaterheelis.co.uk 0330 111 3131
86 Deansgate Manchester M3 2ER
Crossgate House Cross Street Sale M33 7FT
slaterheelis.co.uk
exceeding expectations
@SlaterHeelisLaw /slaterheelis
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