Litigation Process in England and Wales
Each dispute will involve different considerations but the following is a summary of the main stages that most disputes are likely to comprise, together with other steps that may be required.
Prior to commencement of proceedings, there are a number of issues which need to be considered by both parties. These may include:
For An Intended Claimant:
- whether or not it is worth pursuing the intended defendant at all by checking their financial means
- where the defendant’s assets are located to determine where to issue the claim and how easy it will be to enforce against these assets
- who the intended defendant is, if dealing with a corporate defendant
- if any emergency procedures are required before the claim is commenced, eg to restrain a party from moving assets out of the jurisdiction or to preserve the party’s assets.
- if other pre-action procedures are necessary, such as making an application for pre-action disclosure to obtain documents from the intended defendant or a third party which are necessary to be able to formulate the claim
For An Intended Defendant:
- to be aware of the potential cost consequences of making any pre-action admissions of liability
For Both Parties:
- whether or not the claim is subject to any limitation period which could mean that the claim is statute barred
- how the litigation will be funded.
- whether there may be any other interested parties that should be involved in the claim
- the need to comply with one of the specific pre-action protocols. These set out the conduct which the court expects of parties prior to commencing proceedings, and contain information on exchanging documents and other matters such as settlement, alternative dispute resolution (ADR) and the use of expert witnesses. Parties who fail to comply with the pre-action protocols and/or the Practice Direction may be subject to sanctions following the issue of a claim
- if some form of ADR would be appropriate to resolve the dispute and/or whether the parties are bound by an existing ADR clause in a contract
- if the parties are bound by an arbitration clause in an existing contract
- if the parties are bound by a clause in an existing contract that gives a court outside England and Wales exclusive jurisdiction to hear the dispute
- whether English law will apply
- if a Part 36 offer of settlement should be made pre-action if the proceedings will be subject to the disclosure pilot in the Business and Property Courts.
Parties should also be aware that significant costs may be incurred at the pre-action stage. There is no automatic right to recover these costs without a court order for recovery. If a dispute is settled prior to a claim being commenced, the parties should therefore seek to deal with the costs incurred as part of the settlement figure.
There are different ways in which a party can get assistance in funding the costs of litigation. Examples include:
- Litigation funding—this is a financing arrangement whereby a litigation funder agrees to pay the client’s legal fees in bringing a claim (usually including experts, outside counsel and disbursements) in accordance with an agreed budget, in return for a specified sum from any damages recovered
- Conditional fee arrangement (CFA)—this is an agreement under which a legal representative will be paid a different level of fee depending on the outcome of the case. There are different types of CFA
- Damages based agreement—this is an agreement by which the solicitor and the client share the risk of the litigation. It is a type of no win no fee agreement under which the solicitor can recover an agreed percentage of a client’s damages if the case is won, but will receive nothing if the case is lost
- Insurance policies such as:
- before the event insurance—legal costs insurance that the client already has in place prior to the litigation
- after the event insurance—insurance which is taken out after a dispute has arisen to meet some of the legal costs and expenses of the case
Starting A Claim
When bringing a claim, the intended claimant must prepare a claim form and particulars of claim which set out the nature of their claim and what they are seeking from the intended defendant. These documents, along with others that will need to be prepared by the defendant, are called ‘statements of case’, and form the main documents that will set out the parties’ positions for the court.
The claim form must contain a concise statement of the nature of the claim and the remedy that is sought (for example, damages, an injunction) and details of any interest claimed. It will be issued at court and a fee paid, and then must be served on the intended defendant within a set time period.
The particulars of claim set out more fully what the claimant is claiming and can be included in the claim form but are more often set out in a separate document. The claimant must serve the particulars of claim on the defendant within a set time period and file a copy with the court.
The claimant will need to consider in which court to start the claim and this will depend on many factors, including the value of the claim, the nature of the claim, and sometimes the location of the parties.
Responding To A Claim Of Defence
A defendant has a limited time after receipt of a claim to file an acknowledgment of service, stating whether the defendant intends to defend all or part of the claim and whether the defendant intends to contest the court’s jurisdiction to deal with the claim.
The defendant can either admit all or part of the claim and/or file a defence to the claim. The defence must deal with every allegation in the particulars of claim, stating which allegations in the particulars of claim, the defendant:
- denies, giving reasons for the denial
- is unable to admit or deny but requires the claimant to prove
The defendant may also choose to make a counterclaim against the claimant or bring a claim against other parties who are not already parties to the claim..
Once a defendant has filed a defence, the claimant may wish to file a reply to the defence but if a reply is not filed this will not be taken as an admission of the defence. However, if the defence raises new issues, it is sensible for the claimant to file a reply setting out their own version of events.
If the defendant has filed a counterclaim, the claimant can admit or deny (in full or part) the allegations in the counterclaim, but if the claimant does not file a defence to the defendant’s counterclaim, the claimant will be taken to admit the allegations in the counterclaim.
Parties are also entitled to request clarification or additional detail about a statement of case that has been served on them, where this is necessary to enable them to prepare their own case or to understand the case they have to meet.
The defendant may choose to make a counterclaim against the claimant or make an additional claim against another defendant or another person who is not already a party to the proceedings. The defendant may seek a contribution from a third person for all or part of the amount which he is liable to pay or an indemnity for the whole amount which he is liable to pay.
The court’s permission is sometimes required before a defendant can make a counterclaim or additional claim.
Statements Of Truth
All statements of case and some other court documents (including witness statements and experts’ reports) must be verified by a statement of truth which confirms that the person making the statement has an honest belief in the accuracy of the content of the document.
Where a party fails to sign a statement of truth or doesn’t have an honest belief in the accuracy of the document, this could result in the statement of case being struck out or alternatively, that the party is not able to rely on it as evidence of the matters set out in it.
In certain cases, a false statement can be the grounds for a party making an application for contempt of court, which could result in the person who made the statement being committed to prison.
Case Management, Intermit Applications And Hearings
The court’s aim is to ensure that cases are dealt with justly and at proportionate cost, in accordance with the overriding objective, and it has wide powers to manage cases so as to achieve this.
In furtherance of this objective, there are strict time limits for all stages of litigation including filing statements of case, giving disclosure, exchanging witness statements and expert reports, etc. These deadlines are generally set out in the CPR and/or the court’s case management directions orders. A failure to comply with these deadlines could result in draconian sanctions being applied against the defaulting party, including cost consequences and/or that party’s claim or defence being struck out. However, where a party needs more time to meet its obligations, the court is sometimes willing to extend certain deadlines. Any requests for such an extension of time should be made promptly.
Once a defence has been filed the court will provisionally allocate the claim to what it thinks is the most appropriate ‘track’. There are three tracks for civil claims and which track is most appropriate for the claim will depend on a number of factors, including the value of the claim:
- small claims track—generally claims of up to £10,000, though there are different financial limits for different sorts of claims including personal injury claims
- fast track—generally claims of more than £10,000 but less than £25,000, or
- the multi-track—generally claims of more than £25,000
Track allocation is relevant to the manner in which the case will be managed up to trial and the applicable costs regime.
Once the court has provisionally allocated the claim to a track, the parties will be required to complete a ‘directions questionnaire’, setting out certain information about their claim or defence, which is used by the court to confirm to which track the claim is allocated and how the claim will be managed.
The directions questionnaire will contain information on:
- any proposals for settlement. The court may be prepared to ‘stay’ the claim for a limited amount of time to enable the parties to seek to negotiate a settlement
- evidence needed by the court to determine the issues in dispute (including disclosure, expert evidence and witnesses)
- proposed directions from the court that may be required for managing the claim going forward. Generally, the parties are required to co-operate with each other in relation to these proposals and the parties should consider carefully what directions are likely to be required so as to progress the case going forward
Depending on the track to which the claim has been allocated, parties may also need to file a costs budget with their directions questionnaire, setting out the likely costs that they will incur up to and including trial
Also depending on the track to which the claim has been allocated, the court may hold a hearing—called a ‘case management conference’—to review the steps the parties have taken so far and give directions about the steps to be taken going forward to progress the claim.
While the court will give clear directions to deal with all aspects of the case so as to manage it going forward, the parties may find that they need to make applications to the court as the matter progresses, for example, to obtain disclosure of specific documents from the other party that they consider should have been disclosed by that party, but have not been.
Case management also sometimes varies depending on which court the claim is proceeding in, and many courts have their own ‘court guides’ which set out how cases will be managed in that court, alongside the CPR.
Disclosure And Inspection Of Documents
Disclosure is the term given to the process where parties offer up to the other party, ‘documents’ in their ‘control’ which are material to the issues in dispute. ‘Documents’ and ‘control’ have a very specific meaning in this context. The meaning of ‘document’ is very wide and includes electronic documents, including emails, voicemails, texts, video files etc. A document may be in a party’s ‘control’ if they have a right to inspect or copy it, even if the document is not in their physical possession.
The parties will generally be required to prepare a list of these documents and serve it on the other party, who will be entitled to inspect some of the documents.
At an early stage in proceedings, and in some cases before proceedings start, the parties will need to identify and preserve documents which may need to be disclosed to the other party. Parties should also be careful not to create any documents which may be damaging to their case as these may need to be disclosed at a later stage.
Parties must also take care when drafting their statements of case, as their opponents may be entitled to inspect documents mentioned in them.
The other side will not necessarily be able to inspect all documents that are ‘disclosed’. Certain documents are protected from inspection if they are ‘legally privileged’. Privilege is a special protection aimed at retaining the confidentiality in certain (but not all) communications between a client (and some third parties) and their lawyers. However, parties should also be aware of the relative ease with which this protection can be lost or waived and the potentially damaging consequences of this occurring. Parties should also be aware of the distinction between privileged communications and simply confidential communications and the different way in which they are treated in the context of civil litigation.
Parties will most likely be given permission by the court to put forward evidence to support their case in the form of witness statements and expert evidence.
The parties’ factual evidence is generally presented by way of witness statements and those witness’ oral testimony at trial.
It will be important to identify those people that can give factual evidence of the events surrounding the dispute. Generally, the parties will exchange witness statements setting out the evidence those witnesses intend to give at trial on relevant issues in the dispute.
Witness statements must be in the witness’ own words and the witness will be required to sign a statement of truth. As stated above, there are potential consequences for a person who signs a statement of truth without an honest belief in the accuracy of the document.
Witnesses may need to be available to give evidence at trial and should be aware that they may be cross-examined on their evidence at trial.
Expert witness evidence is used to help the court understand technical and/or specialised areas and issues. It should be noted that the expert’s overriding duty is to the court rather than to the client paying their fees and/or the solicitor instructing them.
The court’s permission is required to adduce expert evidence and the court will usually limit expert evidence to certain areas of expertise or particular named experts. In some cases, the court will permit the parties to each appoint an expert in the same discipline but in some cases the court will order a single expert to deal with such evidence.
Generally, the expert will produce a written report, setting out their evidence and, where both parties have instructed experts, these will be exchanged with the other side, so that all parties are aware of the expert evidence that is being relied on.
The court will sometimes order a meeting of the experts, following which the experts will be required to prepare a joint statement setting out the issues on which they agree and disagree and, where they disagree, a summary of their reasons for disagreement.
Ending A Claim Before Trial
There are a number of ways that a claim can be brought to an end. These include:
- admissions—a claim will come to an end if a party admits the whole of the claim
- default judgment—if the defendant fails to engage in the proceedings by not filing an acknowledgment of service of the claim and/or a defence, the claimant may apply for default judgment which will bring the claim to an end without a trial. A defendant can also apply for default judgment if a claimant fails to serve a defence to the defendant’s counterclaim. In certain circumstances, the party against whom judgment has been entered can apply to the court for the judgment to be set aside
- summary judgment—a party may apply to court for an order for summary judgment which, if successful, will determine the claim without a trial. Both a claimant and a defendant can apply for summary judgment. The court will order summary judgment if there is no real prospect of the claim or defence succeeding or if there is no other compelling reason why the case or issue should be disposed of at a trial
- strike out—the court has the power to strike out either party’s statement of case which will usually have the effect of ending the claim. The court will do this if:
- the statement of case discloses no reasonable grounds for bringing or defending the claim
- the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings, or
- if there has been a failure to comply with a rule (under the CPR) or a court order
- discontinuance—a claimant can discontinue all or part of the proceedings it has instigated and will sometimes require the court’s permission to do so. If a claimant discontinues their claim, they will usually be required to pay all the other party’s costs
- settlement—the parties may enter into settlement negotiations with the aim of agreeing a compromise of the claim without the need for a trial. This may be via the parties’ lawyers or with the assistance of a third party by some form of ADR, such as mediation. Settlement is encouraged by the court, and the parties may wish to apply for a stay of the proceedings to allow time to negotiate. Parties can also make what are known as ‘Part 36 offers’, which are a specific type of offer made under the CPR, which have specific cost consequences if the other party rejects the offer but then fails to do better at trial. If served with a Part 36 offer, the recipient must ensure that they consider the offer carefully and within a short period of time (usually within 21 days of the date of the offer) and be aware that there are rules which directly affect the parties’ respective liability for the costs of the litigation depending on if and/or when a Part 36 offer is accepted
- court has no jurisdiction—if the defendant is successful in an application to dispute jurisdiction, the court can set aside the claim form and stay the proceedings
If one of the parties becomes insolvent, this may also have an effect on the ability for the proceedings to be pursued and the likelihood is that, even if the claim is successful, an insolvent defendant is unlikely to be able to satisfy any judgment or award.
A party may apply to court for an order restraining a person from doing an act or compelling a person to carry out a specific act. A party can apply for an injunction prior to or during proceedings.
There are different types of injunction. One example is a freezing injunction, which restrains a defendant from either removing his assets from the jurisdiction (ie England and Wales) or from dealing with them even if they are not in the jurisdiction (a ‘worldwide freezing injunction’). The purpose of granting a freezing injunction is to ensure that the defendant’s assets are preserved so that in the event the claimant obtains judgment against the defendant at trial, assets are available for the claimant to recover damages and costs. As a freezing injunction is quite a draconian order, the party applying for it will usually have to give certain undertakings to the court, for example, that they will pay damages to the defendant if it transpires that the claimant was not entitled to the freezing injunction and the defendant has suffered loss as a consequence of it being ordered.
When a party makes an application to court for an injunction or other order, it is usual to inform the other side of the application, but in some circumstances, due to the need for secrecy and/or because the matter is urgent, it is possible to apply for an injunction without informing the other party.
A court can also make a ‘search order’, requiring a defendant to allow another party into premises to preserve evidence which might otherwise be destroyed or concealed by the defendant.
In the period leading up to trial, the court may order the parties to attend a ‘pre-trial review’ so that the court can review the state of preparation of the case, deal with any outstanding procedural matters prior to trial and agree a timetable for the trial.
Leading up to the trial, the parties may be required to prepare certain documents including:
- a chronology of events surrounding the dispute
- a summary of the case, outlining the matters in issue
- a skeleton argument setting out a summary of the party’s arguments that will be set out at trial
- trial bundles of all the documents that might be referred to at trial
At the trial itself, the parties are likely to be represented by counsel. Counsel for each party will give an opening speech and then evidence will be heard by each party’s factual and expert witnesses. Counsel will then have an opportunity to make final submissions before judgment is given. Judgment is sometimes given immediately but is more often ‘reserved’ and handed down at a later stage.
The trial is usually held in public unless the court has determined that it should be held in private for reasons such as confidentiality or national security.
Depending on the value of the claim, the parties may be subject to costs management by the court. This requires parties to prepare and maintain costs budgets which set out both incurred and estimated future costs. The parties are encouraged to agree the other side’s budget and if they are not agreed, they will need to be approved by the court. When case managing the proceedings, the court is required to refer to the costs budgets and take into account the costs of each procedural step. Costs budgets are important, as at the end of proceedings when the court is assessing costs, the court is required to have regard to the last approved or agreed costs budget for each phase of the proceedings and it will not depart from those figures unless satisfied that there is a good reason to do so.
If the parties settle the matter, the settlement agreement may deal with the issue of costs or, if not agreed, the parties can ask the court to make a costs order.
Following applications before the court eg an application for specific disclosure or to dispute jurisdiction, the court will deal with the costs incurred for that application if asked to do so by one of the parties. If it decides to make a costs order, it may determine the amount of the costs at the end of the hearing or leave costs to be assessed at a later date.
Following trial, the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party but the court has a discretion to make a different order. In deciding what order to make, the court will consider all the circumstances of the case, including the conduct of all the parties, whether a party has been only partly successful and any admissible offers to settle or Part 36 offers. There are many different types of costs orders which can be made but they will stipulate the date for payment.
Where a party is awarded their costs, it is very rare that they will recover all of their costs. A costs order will generally state that costs are to be agreed or, if not agreed, assessed by the court.
If a defendant is confident of their ability to defend a claim, but is concerned about the claimant’s ability to pay any costs award at the end of the matter, they may apply for an order for ‘security for costs’ which will require the claimant to pay money into court or provide another form of security as a precondition to being able to continue with the claim. Security for costs can also be sought by a claimant against a defendant in respect of a counterclaim.
As stated above, enforcement is something that needs to be considered at the outset of a matter and it may dictate against whom a claim is brought, where the claim is brought and what is claimed.
Once a judgment or order from the court has been obtained, the court will not automatically enforce the judgment if the defendant does not comply with it, and therefore further steps will need to be taken to enforce the judgment.
There are many methods of enforcement available and the key to successful enforcement of a judgment is choosing the most appropriate method of enforcement. This will depend on the nature of the judgment, the identity of the judgment debtor (the person against whom the judgment has been obtained) and the nature, extent and location of that person or company’s assets. The person who is seeking enforcement is known as the judgment creditor.
The following are some of the more commonly used methods of enforcement:
- charging order—this type of order can be sought over the judgment debtor’s assets (eg a house or shares). It does not of itself realise money to satisfy the judgment debt but is a means of securing the judgment debt against a valuable asset, often where the judgment debtor does not have ready money available to discharge the debt. To realise the money, an order for sale has then to be obtained from the court
- third party debt order—this permits enforcement of the judgment debt against money owing to the judgment debtor by a third party, often a bank; effectively, the court orders that money held by the third party which is due to the judgment debtor is instead paid by the third party to the judgment creditor
- taking control of a debtor’s goods to sell them and apply the sale proceeds in discharge of the debt
- attachment of earnings order—this is a direction to a judgment debtor’s employer that they must pay a specified portion of the judgment debtor’s salary to the judgment creditor in satisfaction of their judgment debt
If more information about the judgment debtor’s assets is needed to be able to select the most appropriate method of enforcement, it is also possible to request an ‘information hearing’, at which the judgment debtor will be required to provide information regarding the location and value of their assets.
If the losing party’s assets are overseas, consideration will need to be given to the process by which the judgment and any costs orders can be enforced. This will vary depending on the place in which the assets are located.
Following a decision of the court, the unsuccessful party may wish to appeal that decision. An appeal will only be allowed if the appeal court is satisfied that the decision of the lower court was wrong or unjust because of a serious procedural or other irregularity in the proceedings in the lower court. The appeal court may also set aside or vary the lower court’s decision by consent if it is satisfied that there are good and sufficient reasons for doing so.
Permission of the court is usually required to make an appeal and there are tight time limits within which to apply for permission to appeal.
Neither the commencement of an appeal nor the grant of permission to appeal affects the enforceability of the judgment and so a party seeking an appeal will also usually apply for a stay of the judgment pending the appeal being decided.