The Process of a Typical Commercial Case United Kingdom (England and Wales) Litigation Guide IBA Litigation Committee John Reynolds johnreynolds@whitecase.com Clare Semple csemple@whitecase.com Amanda Cowell acowell@whitecase.com Edward Attenborough eattenborough@whitecase.com White & Case LLP 5 Old Broad Street London EC2N 1DW UNITED KINGDOM www.whitecase.com
1. Limitation issues The normal statutory limitation period for contract (and tort) claims under English law is six years from the date on which the cause of action accrued. 1 Exceptions include claims based on the defendant s fraud, concealment or a mistake, where the six-year period runs from the date when the claimant discovered, or could reasonably have discovered, the fraud, concealment or mistake. 2 Commercial parties are generally free to agree that claims must be brought within a shorter period than provided by statute (subject to certain statutory controls 3 ) or to enter into a standstill agreement to stop time running for the purposes of limitation and preserve the right to bring proceedings. 2. Pre-litigation requirements There are no specific pre-action protocols for commercial claims such as the typical claim described above. However, the Practice Direction on Pre-Action Conduct (the PDPAC ) applies to all types of claim, subject to limited exceptions 4 and requires parties to exchange sufficient information about the matter to allow them to understand each other's position and make informed decisions about settlement and how to proceed 5 and make appropriate attempts to resolve the matter before starting proceedings. 6 3. Starting proceedings Commercial claims above 25,000 should generally be brought in the High Court 7. The applicable procedural rules are the Civil Procedure Rules 1998 (the CPR ). A claimant commences proceedings by filing a Claim Form at court. 8 The Claim Form must be served upon the defendant(s) within 4 months of issuance. 9 The Particulars of Claim (setting out the claim in full) may either be contained in or served with the Claim Form itself, or served within 28 days of the 1 2 3 4 5 6 7 8 9 Limitation Act 1980, Section 5. Ibid., Section 32. In particular, the Unfair Contract Terms Act 1977. Note that the Admiralty & Commercial Courts Guide (paragraph B3.1, 9th edition, 2011) (the Guide ) states that the PDPAC should usually be observed in commercial cases. See Practice Direction on Pre-Action Conduct, paragraph 6.1. Ibid. See CPR Practice Direction 7A. See CPR Part 7, Rule 7.2(1). See CPR Part 7, Rule 7.5(1)
defendant having filed an acknowledgment of service indicating an intention to defend the claim. 10 Upon the application of a party, the Court may direct a separate trial of a preliminary issue. 11 The judge may dismiss or give judgment on a claim after a decision on a preliminary issue. 12 4. Timetable and Case management After the Defence has been filed and served, the Claimant may (but is not obliged to) file a Reply within 21 days. 13 Typically, the next step is a Case Management Conference, a hearing at which the Court will give directions for the steps and timetable leading to trial. The parties may agree directions in advance of this hearing, which the court may then approve. 14 The time needed to take a claim from the issuance of proceedings to judgment varies considerably depending upon the complexity of the claim, but 12 to 18 months is typical, subject to any appeal. 5. Disclosure of Evidence The court has discretion in respect of what is ordered, but at present it will generally order each party to conduct a reasonable search for 15 and to disclose: (1) the documents on which it relies, (2) the documents which adversely affect its case, and (3) those which support another party s case. 16 However, note that in April 2013, as a result of changes to the CPR, disclosure will no longer be approached in the same way for each case. Instead, in each case the court will decide on what basis disclosure should be made, having regard to the overriding objective (of enabling the courts to deal with cases justly) and the need to limit disclosure to what is necessary to deal with the case justly. 17 The Court may 10 See CPR Part 58, Rule 58.5(1)(c). This assumes the case is in the Commercial Court. In other courts, Particulars of Claim must be served within 14 days after service of the Claim Form and no later than the latest time for serving the Claim Form (CPR Part 7, Rule 7.4). 11 See CPR Part 3, Rule 3.1(2)(i). 12 See CPR Part 3, Rule 3.1(2)(l). 13 Commercial Court Guide, C4.1. This assumes the case is in the Commercial Court. The deadline for the Reply in other courts depends on when the court requires the parties to file an Allocation Questionnaire, but will typically be within a few weeks of the Defence being filed. 14 In some division s directions may be approved by the court without a hearing under CPR 29.4. 15 CPR 31.7. 16 Together with any documents he is required to disclose by a relevant Court Practice Direction. CPR 31.6.. 17 See further section 11 of the Civil Procedure (Amendment) Rules 2013 (SI 2013 No. 262) replacing CPR31.5
make an order requiring disclosure of specific documents, or categories of documents, as well as or instead of an order for standard disclosure. 18 Document includes anything in which information of any description is recorded, 19 including electronic documents and tapes as well as paper. Once litigation has commenced or is in the reasonable contemplation of a party, that party should take steps to preserve documents which he might possibly be required to disclose. The Court may draw adverse inferences from any failure to preserve documents, and, in extreme cases, may strike out a party s case. Deliberate suppression of evidence may attract criminal sanctions for perverting the course of justice. 6. Administration of Evidence Documentary evidence is provided to the court in hard copy in advance of the trial. For factual witnesses, written statements will be filed and served in advance of the trial, according to directions given by the Court 20. Where a witness is called to give oral evidence at trial, his witness statement will stand as his evidence 21 and he will be cross-examined on it. 22 The Judge will oversee the process and intervene where necessary. The witness may, with the permission of the Court, amplify his witness statement. 23 Following cross-examination, the witness may be re-examined. CPR Part 35 sets out the rules and procedure regarding expert evidence. It is the duty of an expert to assist the court on matters which fall within their expertise. 24 This duty overrides any obligation the expert may have to the person instructing him. 25 Expert evidence is submitted in a written report, unless the court directs otherwise. 26 The Court will normally direct a meeting of experts before trial to enable them to identify, and prepare a joint memorandum setting out, the issues on which they agree and disagree, and the reasons for their disagreement. 27 Experts will normally be cross-examined at trial. 18 19 20 21 22 23 24 25 26 27 CPR 31.5. CPR 31.4 See CPR Part 32, Rule 32.4. See CPR Part 32, Rule 32.5(2). See CPR Part 32, Rule 32.11. See CPR Part 32, Rule 32.5(3). See CPR Part 35, Rule 35.3(1). See CPR Part 35, Rule 35.3(2). See CPR Part 35, Rule 35.5(1). See CPR Part 35, Rule 35.12.
7. Remedies Remedies are typically in damages. The court has discretion to award specific performance and will do so typically where it considers that damages would not be an adequate remedy (provided that it considers specific performance just in all the circumstances). The Court also has wide-ranging powers to order final or interim injunctive relief, including search orders and freezing injunctions. 8. Enforcement Before any enforcement action can be taken the judgment must have been served on the judgment debtor and, for certain methods of enforcement, the judgment debtor must have been given an opportunity to pay. The methods of enforcement available for a money judgment include: a court document enabling an enforcement officer to seize and sell a judgment debtor's goods; an order freezing sums owed to a judgment debtor in the hands of a third party; a charge over a judgment debtor's beneficial interest in certain assets; an order that a proportion of a judgment debtor s earnings be paid directly to the judgment creditor by his employer; insolvency proceedings (i.e. bankruptcy and company liquidation); and the appointment of a receiver 28. A judgment creditor can use any available method of enforcement or a combination, except where a statute, rule or practice direction states otherwise. 29 Depending upon the method of enforcement to be adopted, the judgment creditor will need to file the relevant standard form with the Court in order to commence enforcement proceedings. 9. Appeal Permission to appeal a High Court judgment may be obtained either from the first instance Court or the Court of Appeal. Permission will only be given if the appeal appears to have a real prospect of success or there is some other compelling reason why the appeal should be heard. 30 For an appeal to succeed the appellant must show the lower court s decision was wrong or unjust because of a serious procedural irregularity. 31 Generally, appeals will be limited to a review of the lower court s decision on the evidence which was before that court. 32 28 29 30 31 32 See CPR Part 70, Rule 70.2(1). See CPR Part 70, Rule 70.2(2). CPR 52.3(6). CPR 52.11(3). CPR 52.11.
Decisions of the Court of Appeal may be appealed to the Supreme Court. Permission may be given if there is an arguable point of law of general public importance which ought to be considered 33. 10. Costs The general rule is that the Court will order the unsuccessful party to pay the successful party s costs. 34 However, the Court has a wide discretion 35 and will have regard to the conduct of the parties and settlement offers which are brought to the Court s attention. 36 Typically, a Court will order that the successful party s recovery is limited to those costs which were reasonably incurred and proportionate to the matters in dispute. 37 As a very rough guide, this would typically result in a 60-70% recovery. Note that, from April 2013, parties to substantial commercial claims (outside the Commercial Court) will each be required to file a costs budget with the court and, where the budget is approved by the court, it will not allow recovery of costs in excess of such budget unless there is a good reason to do so. 38 Costs orders include the fees of solicitors, barristers, Court fees and some third party costs, such as expert fees. 33 34 35 36 37 Practice Direction 3 to the Supreme Court Rules Applications for Permission to Appeal, paragraph 3.3.3. CPR 44.3(2). CPR 44.3(1). CPR 44.3(4). See also CPR Part 36. CPR 44.4(2). 38 See further section 5 of the Civil Procedure (Amendment) Rules 2013 (SI 2013 No. 262) inserting CPR 3.12-3.18