Litigation In England – Everything You Ever Wanted To Know But Were Too Afraid To Ask…

The court procedure for bringing a claim in England can be involved, so we have set out below a series of FAQ that will hopefully provide some clarity.

The Practice Direction on Pre-Action Conduct sets out the general manner in which parties are expected to behave before a claim is issued and the process for exchanging information before proceedings commence, in the hope that this can be avoided. There are also a number of specific pre-action protocols which apply to certain types of cases (e.g. professional negligence). Breaches can result in costs sanctions.

A claim is started when the court issues a Claim Form, which you must complete with details of the parties and brief details of the claim. The Court issues the claim by sealing the Claim Form with the court seal and marking it with the date of issue. Particulars of Claim setting out the full details of the claim must also be filed at Court and served on the Defendant with the Claim Form (as to which see paragraph 4 below).

2)  How do I know that the English Court is the correct place to bring the claim?

There are in essence two sets of complex rules that govern whether the English court has jurisdiction; the European regime under the Brussels Convention / Regulation and the common law rules. Specific fact-based advice must be sought in every instance.

In very general terms, for cases between EU members, jurisdiction under the Brussels Convention / Regulation will found on the basis of the domicile of the defendant individual or company of the member state, save in respect of special jurisdiction based upon, for example, any agreement as to jurisdiction, the place of performance of the contract or the place where a tort was committed.

For other cases, the common law rules are complex, and may take into account factors of personal and subject matter jurisdiction, such as the domicile of the parties, any agreement as to jurisdiction, the place of performance of a contract, where a tort was committed, the existence of related proceedings overseas or whether there is a more convenient forum elsewhere.

3)  How do I know whether English law applies to my dispute?

The law which applies to a dispute (the governing law) may be dealt with in the contract agreed between the parties. Commercial contracts will often contain a governing law clause, so you should check whether such a clause exists in any contract relevant to the dispute. In the absence of any such clause complex rules will apply, as set out below.

Within the EU, the Rome regime will apply. If the contract was entered into before 17 December 2009, the Rome Convention will apply and the governing law will be the law of the state with which the contract has the closest connection (applying the Convention rules). After 17 December 2009, Rome I will apply and the applicable law is usually the law of the state where the party with characteristic performance of the contract has its habitual residence. In respect of tort and other non-contractual claims, after 11 January 2009, Rome II provides that the applicable law is determined on the basis of where damage occurs or is likely to occur. Prior to this, the applicable law is that of the place where the harmful act was committed.

If a contractual or non-contractual claim falls outside of the Rome Regime, in the absence of any effective governing law clause, the English court will have to decide which law to apply in accordance with the complex common law rules. Again, specific fact-based advice must be sought in every instance.

4)  What are the rules on service in England and Wales and abroad?

The permitted methods of service within England and Wales are:

• Personal service (i.e. the Claimant or his agent handing the proceedings directly to the Defendant);
• First class post, document exchange (DX) or other service which provides for delivery on the next business day;
• Leaving the document at a specified place;
• Fax / other electronic means (providing the Defendant agrees).

Permission may be required for service out of the jurisdiction, generally where service is outside of an EU member state. In order for permission to be granted, the court must be satisfied that (a) one of the jurisdictional gateways applies; (b) the claim has reasonable prospects of success; (c) there is a real issue for the court to try; and (d) England and Wales is the proper place to bring the claim. The most usual methods of service are under the EU Service Regulation or the Hague Convention.

Where there is evidence that the Defendant is evading service, in specific circumstances the English court may be open to the use of social media for service (e.g. Facebook).

5)  Can urgent interim relief be obtained from the court before the full trial?

The English courts have the power to make interim orders on case management matters (for example, standard disclosure of documents, exchange of evidence, trial directions) and for specific remedies/relief such as;

• Specific disclosure of documents;
• Interim injunctions ordering a party to do or to refrain from doing something;
• Interim payments; and
• Strike out of a party's claim which is without merit. 

Applications for interim injunctions should be made urgently, and in other cases as soon as it becomes apparent that the relief is necessary.

6)  What about costs? Will I have to pay the other party's costs?

Claims in English Courts are allocated to one of three different tracks, depending on the value and complexity of the claim.

The Small Claims Track is for claims up to £5,000 and there is only very limited provision for parties to recover minimal costs from the losing party.

The Fast Track is for claims up between £5,000 and £25,000. The general current principle is that the loser pays the winning party's costs. However the recoverable trial costs are limited to scales, as an incentive for parties to settle these lower value disputes.

The Multi Track applies to claims valued over £25,000 and complex cases. The current principle that "the loser pays the winners costs" applies to Multi Track cases. The winning party would normally be able recover a proportion, around 60%-80%, of its legal costs from the loser.

7)  What are my funding options?

Currently Conditional Fee Agreements or "no win no fee" Agreements are permitted, which are often supported by "after the event" insurance. This arrangement means that unless otherwise agreed, the client wouldn't have to pay any fees if they lose the case, because the insurance policy shall pay the successful opponent's costs. If the client wins, the opponent currently pays the client's claimed legal costs, including a "Success Fee", which is an uplift on solicitors' fees to compensate them for having taken the risk of not getting paid. The insurance premium can also currently be claimed from the losing party. For more information, see our no win no fee litigation package, Quantum.

However, proposed reforms due to be implemented in April 2013 will abolish the recoverability of success fees and insurance premiums from the opponent and intend to permit contingency fee or damages based arrangements for contentious work (currently prohibited). Read our article on damages based agreements.

8)  How long does the average case take to get to trial and how much will it cost?

There is no specific timetable for arbitration in the Small Claims Track; however the Courts try to push these cases through informally and quickly, often without lawyers, and list hearings within a matter of months. The cost of a Small Claim is designed to be minimal and limited to the Court fees.

The Fast Track brings cases to a relatively swift conclusion and trial dates are usually listed with 30 weeks of directions being given (which takes place once the statements of case are closed). As a general rule, the Courts will expect the costs of Fast Track cases to be proportionate to the amount in dispute, particularly as the Court's power to award trial costs is very limited by reference to scale.

There is no specific timetable for Multi Track cases which can, due to their complexity, take up to 18 months (or more) to come to trial. The costs in the Multi Track are not limited and, as a general rule, these cases can cost not less than £25,000 (but can cost many multiples more, and in big ticket litigation very significantly more). Appeals will lengthen the process still further.

These figures are for guidance only and specific estimates should be sought in every instance.

9)  Will I have to take part in Alternative Dispute Resolution (ADR), such as mediation?

ADR / mediation is not mandatory in English litigation. However it is strongly advisable for the parties to consider ADR / mediation at the pre-action stage and to review the position throughout the course of the litigation. This is because the courts encourage the use of ADR / mediation and wish for parties to avoid litigation if at all possible. Whilst the Court does not have the power to order the parties to mediate, if you unreasonably refuse to do so then the court has discretion to impose costs sanctions on you, whether you are successful or not.

10)  What happens if I have successfully obtained judgment at trial?

There are a number of options for enforcing an English judgment including:

• Execution against  goods i.e. seizure and sale of goods belonging to the defendant to satisfy the judgment;
• Charging order over property owned by the defendant (which could be real estate or shares), followed by an order for sale of the property;
• Third party debt order i.e. sums owed to the defendant which in the hands of a third party (e.g. a bank) are frozen and seized;
• Attachment of earnings order i.e. deductions from earnings to be paid directly to you.

The procedure for enforcing an English judgment overseas will depend upon the country in which you wish to enforce the judgment. The European Enforcement Order Regulation provides that an uncontested UK judgment is automatically enforceable in another EU member state. If the EEO procedure does not apply, the procedure set out in the Brussels Regime should be followed in respect of enforcement in the EU. In respect of other countries, you should consider whether any bilateral enforcement treaty is in force.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.