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Litigation Q and A

When faced with a potential dispute, it can be hard to decide what the best course of action is for your business. Whilst every case is different, we have set out below some frequently asked questions.

1. What is litigation?

Litigation is the process of settling a dispute in a court.

2. Is litigation the only way to resolve a dispute?

No, there are a number of ‘Alternative Dispute Resolution’ mechanisms parties to a dispute can use to resolve a dispute, including, negotiation, mediation, adjudication and arbitration. Deciding on the most appropriate type of dispute resolution will depend on a number of factors including the subject matter and complexity of the dispute, the financial value of the case and the parties’ intentions. It is also possible to utilise more than one type of dispute resolution, for example, negotiations and mediations can take place while proceedings are ongoing at Court.

Even before commencing formal litigation at Court, parties to disputes are required to comply with a ‘pre-action protocol’. Again, the type of protocol depends on the nature of the dispute, but will generally involve the parties exchanging information in an attempt to narrow the issues in dispute and settle.

3. How much is it going to cost me?

The costs of any sort of dispute resolution will inevitably vary from case to case. Usually, the more complex, document heavy disputes where, for example, there are a number of parties involved etc will be more expensive to run but that is not always the case. Ultimately the amount of costs depends on the other side’s conduct, the client’s conduct, what steps the Court requires the parties to take, whether an expert is needed etc.

Your lawyer should provide you with a fee estimate for the litigation at an early stage.

4. What if I can’t afford litigating?

Investigate whether you hold any legal expenses insurance. Legal expenses insurance is often a ‘bolt on’ to household or other policies, so it is important to double check any insurance policies you hold. If you do not have any such policy then you have be able to obtain After the Event insurance cover. Speak to your lawyer about any cost concerns and what your options are.

5. What happens if I lose?

The usual rule is that the successful party is entitled to recover their costs from the losing party. However, the successful party is unlikely to recover all of its costs (as a general rule of thumb if your claim is successful then you can expect to recover 70-80% of your legal fees from the other party). If you are not successful therefore, you could be faced with paying whatever damages are award by the Court, your own legal costs and a proportion of the other side’s legal costs. Your lawyer will discuss the potential costs consequences with you and the costs/ benefit of litigation.

The rules on costs recovery in the small claims track (where the value of the claim is less than £10,000) are different to the normal rules on costs recovery. For small claims, except in exceptional circumstances, each party bears its own costs. The benefit is that your risk to adverse costs if you lose is significantly reduced. The downside is that if you win, you will have to pay your legal fees.
Costs are a big (if not the biggest) consideration for parties to a dispute. Your lawyer will talk to you about costs in detail and consider ways to make dispute resolution as cost effective as possible. This will include consideration of proportionality, how costs are managed by the court, settlement options and alternative dispute resolution.

6. How long will this take?

In our experience, disputes usually take around 12 – 18 months to reach a conclusion (for small claims you are probably looking at closer to 6 – 8 months). Again, this depends on a number of factors including the parties’ conduct, complexity (e.g., if you need to get an expert involved) and the Court timetable.

7. Do I have to act now or can I wait?

The law sets out deadlines (limitation periods) for bringing claims so that a claim cannot be brought too long after the cause of action accrued. The length of a limitation period varies with different types of claim. Your lawyer can advise you on the relevant limitation period for your potential claim.
It may not therefore be necessary to take immediate action if you are well within the relevant limitation period.
Actions for equitable remedies, which are awarded at the discretion of the court, and founded on fairness and justice, must be brought without delay. Delay in pursuing an equitable claim or remedy may prevent you from obtaining relief. Examples of equitable remedies include specific performance, injunctions, orders to account, account of profits, declarations etc.
It is important to raise any potential claim you might have with your lawyer as soon as possible. Your lawyer will be able to advice on the potential cause(s) of action, remedies and whether or not you need to consider taking action now.

8. I have a CCJ – now what?

You have a CCJ, but what happens if the judgment debtor does not pay? There are a number of enforcement options you can look at using to try and recover what is owed to you. Those enforcement mechanisms include taking control of goods, third party debt order, charging order, attachment of earnings and insolvency proceedings. The most appropriate methods of enforcement depends on what assets the judgment debtor has. There are also ways to obtain information about a judgment debtor’s assets such as instructing and enquiry agent and applying for an Order to obtain information from a judgment debtor.

9. Why do I need a barrister?

Barristers are specialist lawyers and court room advocates. Solicitors will instruct barristers to advise on complex points to law, draft substantive letters and court documents and represent clients during court hearings.

10. Where can I get more advice?

Contact us! If you have any queries about dispute resolution and litigation or want to discuss ways to protect your business from disputes, please give us a call on 01228 549560 or 01524 548494

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