In a dispute? 5 tips to start a litigation claim
Updated: May 10, 2021
This article is for individuals who are considering litigation as a means to settle an ongoing dispute. Before commencing litigation. It is important to consider the pre-action protocols and to make an effort to settle the dispute out of court. Litigation can be time-consuming and expensive. Moreover, failure to observe the pre-action protocols may result in additional costs. If you believe that litigation is the best option to resolve your dispute, this article will provide you with 5 key tips you should take into consideration when commencing a litigation claim.
The Pre-action Protocols
Who is the Claim Against?
Value of the Claim
Documents and Costs
1. The Pre-action Protocols
The Pre-Action Protocols set out the procedures to follow before commencing litigation. The court recognises litigation as a remedy of last resort and therefore encourages litigants to observe the pre-action protocols to settle issues without the court’s intervention. The Protocol encourages parties to consider negotiation or some form of ADR to enable the settlement of the dispute, litigation should be a last resort. You can find further information on Mediation as an ADR procedure in our article here.
If the court discovers that a claim could have been resolved out of court but one of the parties was unreasonable in refusing to consider Alternative Dispute Resolution(ADR), they will impose costs sanctions on the defaulting party. The judge will rely on the Court of Appeal case, Halsey -v- Milton Keynes General Trust  EWCA Civ 576, to decide whether costs sanctions would be appropriate in a particular case. In Cundall-Johnson & Partners -v- Whipps Cross University Hospital NHS Trust  EWHC 2178, proceedings were stayed because the claimant had not observed the necessary pre-action protocols before commencing litigation.
Under the pre-action protocols, a claimant is expected to send a ‘letter before claim’ to the defendant before commencing proceedings. The letter should state the basis of the claim, a summary of the facts on which the claimant intends to rely, what he expects of the defendant, and if money is owed, how the amount was calculated. On receipt of the letter, the defendant has 14 days to respond in a straightforward case and 3 months if the case is complicated. The defendant’s reply should confirm whether the claim is accepted and if not which parts of the claim are disputed and why. The reply should also indicate whether the defendant intends to make a counterclaim and provide details of the counterclaim. Both parties should disclose to each other the documents on which the claim or defence is founded.
2. Who is the claim against?
It is usually easy to identify the defendant in most cases by virtual of a written agreement. For example, if you were supplied with damaged goods, the defendant will usually be the supplier/manufacturer with whom you signed the purchase agreement. However, there may be cases where even in the presence of a signed agreement, it may not be clear who the defendant should be. The individual or company with whom you signed an agreement may have subcontracted the work to another company. In this case, you may need to bring a claim against all parties involved as it is likely that they may blame each other. In absence of a contract, identifying the defendant may pose a more difficult task. The individual with whom you had regular contact or who did the work might have been acting on behalf of another individual or company as an employee. In such cases, the employer may be vicariously liable for their employee’s actions. The claim should therefore be brought against either the company, partnership, or sole trader employer. Assigning liability to individuals in partnerships is usually more difficult especially where the partnership is not a limited liability. If you are not sure of who the defendant should be, seek advice from a member of our team by contacting us here.
Once you have identified the defendant, make sure that you note down their name correctly to avoid any delays and extra costs in the litigation process.
3. Value of the claim
Part 16.3 of the Civil Procedure Rules (CPR) states that the claimant must include a statement of value in the claim form. The statement of value must state the money being claimed by the claimant or that the claimant cannot say how much is likely to be recovered. When determining the value of the claim, the claimant must disregard any possibility that the court may issue an award of interest or costs. As such, you should include all interest and costs when calculating the value of the claim. It is important to note, however, that the court reserves the discretion to award an amount it deems fit regardless of the statement of value.
4. Documents and Costs
To commence a claim, you will be required to complete and submit a claim form and particulars of the claim to the relevant court. These documents state the facts of the case, the remedies you seek to recover, and evidence which you intend to rely on to support your case. You are under a legal obligation to preserve all documents, both electronic, and written including records of telephone conversations once litigation is in contemplation. Although it is advisable to send the particulars of the claim together with the claim form, part 7.4 of the CPR states that the claimant may serve the particulars of the claim on the defendant no later than 14 days after service of the claim form. If the defendant resides in another jurisdiction, the claimant has 4 months after the date of issue of the claim form to serve the claim form and particulars of claim on the defendant.
The defendant has 14 days to respond to the claim with a defence or acknowledgement of service which should be followed with defence within 28 days if they do not agree with the claim. An agreement between the parties or application to court can be made to extend these deadlines. The English courts are strict on compliance with deadlines. If you do not respond to a claim within the required time, the court may issue a default judgment in the claimant’s favour without a hearing. It is advisable to seek legal advice once you have received a claim to ensure that you do not miss any deadlines.
Litigation can be expensive and unpredictable. Estimate how much it is likely to cost you to progress your case through court (i.e. court fees and other legal fees) before commencing proceedings. Under English law, the losing party covers the winning party’s reasonable legal costs. Consider Conditional Fee Agreements, Third-Party Funding, and Damages Based Agreements. These may cover all or some of your legal fees in return for a share of the proceeds in case the case is successful. Before the Event and After the Event insurance policies may also be available as an alternative to help you cover both your opponent’s and your legal costs in case your claim is unsuccessful. Seek legal advice to assess your options.
5. Which Court?
Look at your contract to determine which jurisdiction was agreed on by the parties in case of a dispute. In England, all claims generally start in a County Court unless they are of high value in which case they may start in the High Court. Most large commercial cases will start in the Business and Property Courts, which is a division of the High Court while small money claims will usually be submitted to the County Court Money Claims Centre.
Although London has one of the most reputable court systems globally, the current English court system suffers from delays due to an overload of cases, especially in the High Court. Further delays can also be attributed to the current Covid – 19 circumstances which have caused a case backlog. Recommendations have been made by Lord Justice Briggs, in his report ‘Civil Courts Structure Review’, to make the English court system more efficient through the introduction of the ‘Online Court’. The Online Court will be broken down into 3 stages. Stage 1 will be designed to help litigants in person to submit their claim forms and relevant documents online, stage 2 will be a conciliation stage handled by a case officer and stage 3 will be the determination stage where cases that could not be settled in stage 2 will be determined by a judge.
This three-stage system will encourage ADR which will ultimately free up judicial time. Remote access to the court system will also improve transparency. To combat computer illiteracy, funds will be allocated towards a digital support team to assist those who find it challenging to use the electronic court system.
To relieve pressure from the High Court and increase the capacity of the County Court, Briggs LJ also recommended the increase of the current £100,000 threshold (£50,000 for Personal Injury (PI) claims) below which claims cannot be issued in the High Court, to £250,000 for all claims (including PI), with a view to raising it to £500,000 in the future. London High Court judges will also be encouraged under the proposed civil court structure to attend category A cases regionally. This will improve reassurance in regional courts hence reducing the number of category A cases currently being referred to the London High Court.
Although the above recommendations have not yet been implemented, it is clear that they would improve the efficiency and transparency of the English courts.
Litigation can be time-consuming and expensive. As such, the court encourages the observance of the pre-action protocols to assist parties to settle disputes outside court. Failure to engage with the pre-action protocols could result in costs sanctions and delays in the litigation process.
Having considered the pre-action protocols and identified the defendant, you need to look at any written agreements to identify the parties’ agreed jurisdiction/court for dispute resolution. Unless your claim is a high-value claim, it should commence in the County Court.
Consider completing and submitting the claim form and particulars of the claim to court together with the relevant evidence. Once the court has issued the claim, the defendant will have 14 days – 3 months to respond to the claim depending on the complexity of the case.
Under English courts, all claims start in the County court unless they are of high value, in which case they may commence in the High Court. Currently, the High Court is overloaded with a backlog of cases and recommendations have been made by Lord Justice Briggs to introduce the ‘Online Court to help improve the efficiency of the English legal system. These recommendations are yet to come into force.
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Serenity Law has an experienced team of commercial law experts who are dedicated to helping clients achieve legal solutions. We support our clients to settle their disputes through ADR procedures such as mediation.
Our co-founding partner, Avinder Laroya, is CEDR accredited and a CMC registered mediator for commercial and workplace disputes. She is passionate about resolving international commercial disputes. As a CEDR accredited mediator, Avinder Laroya can work with you to overcome disputes, minimising the need to go through lengthy, costly, and stressful court proceedings. Click here to book your free 15-minute consultation.