#10462 - Unit 1 – Initial Steps In Resolving A Commercial Dispute - Commercial Dispute Resolution

Unit 1 – Initial steps in resolving a commercial dispute consolidation

r = CPR rule

Commercial litigation:

(More than one court may be appropriate given the claim)

• Carried out in the country courts and QBD of High court but there are specialist courts:

• QBD

1. Commercial court – commercial and mercantile disputes

   • business doc or contract

   • export/import of goods

   • carriage of goods by land, air or pipeline

   • exploitation of oil and gas reserves or other natural resources

   • insurance/re-insurance

   • banking and financial services

   • operation of markets and exchanges

   • purchase and sale of commodities

   • construction of ships

   • business agency

   • arbitration

2. Mercantile court in London – disputes which are less complex or of smaller value that the commercial court

3. Regional Equivalents of a) and b) – Birmingham, Bristol, Cardiff, Mold, Leeds, Liverpool, Manchester and Newcastle

4. TCC – construction and engineering disputes as well as those of a technical nature. Sits in London but District registries in which a TCC judge sit are available in Birmingham, Bristol, Cardiff, Chester, Exeter, Leeds, Liverpool, Newcastle, Nottingham and Salford. TCC claims may also be issued in country courts of above locations as well as Central London Country Court

   • building/construction disputes

   • engineering disputes

   • claims by/against architects, surveyors, accountants, specialist advisors, local authority regarding stat duties over development of land or construction of buildings

   • Claims related to design, supply and installation of computers, software and networks

   • Claims relating to quality of goods sold/hired, word done, materials supplied, services rendered

   • Claim between L and T for breach of repair cov

   • Claim between neighbours, owners/occupiers of land for trespass/nuisance

   • Claims related to environment (pollution)

   • Claims arising out of fires

   • Claims involving taking of account where complex

   • Decisions of arbitrator in construction and engineering deposited including app for permission to appeal

• Chancery Division, general list– bankruptcy, dissolution of partnerships, matters affecting affairs of co, commercial property/unregistered IP rights (passing off, UDR, , implied confidential info)

• Chancery Division, companies court – Constitution of a company/ insolvency of co’s

• Chancery Division, bankruptcy court – Bankruptcy of individuals

• Chancery Division, Patents court – Registered IP rights (TM, RDR, Patents)

ADR:

• CPR 1.4(2)(e) one of courts case management powers as “encouraging the parties to use an alternative dispute procedure if the court considers that appropriate and facilitating the use of such procedure”

• Sol who fails to advise on availability of ADR may be negligent

• Could almost amount to breach of P4 (not acting in best interests of client)

Arbitration:

• Arbitration clause requires arbitration

• Dispute decided by one or more arbitrators who are usually experts chosen from a particular field/professional body

• The decision (arbitration award) is binding on the parties and enforceable through the courts

Adv. of arbitration over litigation:

• Parties choose own arbitrator(s) who have professional experience

• Less need for parties to call their own expert evidence

• Saving of time and therefore of costs

• No fixed procedure (parties have preliminary meeting with arbitrator where they work out timetable for arbitration and procedure)

• Formal hearing

• Informal site meeting

• Documents only

• Can take place at a time and place which suits parties

• Total privacy is possible (trade secrets)

• Greater finality because there is no appeal on question of fact

Dis. of arbitration

• If dispute is over a point of law then arbitration isn’t suitable

• Dispute may require remedies that only the court can give (enforcement of an injunction)

• S.44 Arbitration act 1996 enables the court to supplement arbitrators powers but they are still usually best dealt with by litigation

• Not cheap – lawyers charge same prices as litigation, parties have to hire a room for the hearing and pay the arbitrator (experienced professional) his fee

Funding the action:

CFA - can be used by clients who would be able to fund the litigation themselves

ATE – premiums will be high

TP funding – both own and opponents costs in return for a share of any money recovered by C 25-50% (last resort)

Jackson Report:

1. Abolition of recovery of success fees and ATE insurance premiums - s.44/46 LASPO 2012

2. Banning of referral fees in personal injury cases

3. Allowing the use of contingency fees in contentious work – s.45 LASPO 2012 (DBA’s – see below)

4. Fixed pre-trial costs in fast track cases

5. Unsuccessful C would not be required to pay the successful D costs – s.55 LASPO 2012

6. A voluntary code of conduct for TP litigation funders

7. Greater case management powers for courts (costs management). Allocating judges who have relevant experience. Limit the length of WS and expert reports. Hot tubbing experts (expert evidence of both sides heard concurrently on issue by issue basis)

8. Greater incentives to accept settlement (automatic 10 increase in damages where D fails to beat C Part 36 offer)

9. Encouraged but not mandatory ADR

DBA’s:

• S.45 LASPO 2012

• DBA must comply with s.58AA Courts and Legal Services Act 1990 and the Damages Based Agreements Regs 2013 (SI 2013/609):

• Must in writing

• Must specify claim/proceedings (parts of them) which agreement relates

• Circs which representatives payment, expenses and costs (or part) are payable

• Reason for setting amount of payment at level agreed

• In non-personal injury cases maximum % permitted is 50% of the sums recovered (including VAT and counsel fee BUT NOT other disbursements)

• Sol costs under DBA can only be taken from monies recovered

• Costs recovered under DBA are taken away from the % of the damages so the solicitor doesn’t get them twice

• If case lost sol receives nothing and C must pay D costs

• Can only be used when acting for a party who may recover money – C

Limitation Issues:

• LA 1980 – 6 years from when the cause of action arises in contract and tort

• Contingent liability is not as such damage until the contingency occurs

Initial considerations:

• Ensure that time limits are not missed

• Any doubt/time period left is short then sol should issue proceedings to protect clients position

• D sol should pay equal attention as limitation is a very effective defence

Exceptions:

• For negligence claims in tort the initial time limit can be extended under s.14A of the LA 1980 to the date 3 years after C first had knowledge of the facts relevant to the court of action (ultimate longstop date of 15 years from alleged breach)

• Does not apply to claims which can only be framed in contract

1. Fraud – s.32, limitation period is postponed until 6 years from C discovering the fraud

2. Consumer – statutory 10 year longstop

3. Contribution – Civil Liability Contribution Act 1978, limitation period is 2 years from date of judgement/agreement between parties

• Court has the power to apportion liability between 2 or more persons who are liable for same damage (tort or contract)

4. Pending actions s.35, party cannot defeat rules on limitation by adding a new claim to existing proceedings when it would be too late to start a separate action

5. Contracts may have express terms as to limitation and these will take precedence over statute

6. Parties may agree to stay the limitation period (stop time)

7. If English courts apply foreign law then Foreign Limitation Periods Act 1984 means limitation period will be governed by foreign law (seek foreign legal advice)

Capacity

• Sol must satisfy himself that client has legal capacity and that intended D can be sued

• When acting for/against children and patients consider specialist rules

• If client or intended other party is dead will the claim will survive (defamation will not)

• Necessary approvals from representatives of deceased must be obtained

• If dealing with a partnership then make sure all relevant partners are named

• If not a co or partnership does the body constitute an unincorporated body (trade union) if so cannot sue or be sued

• Approvals of TP’s before litigation (insolvency – liquidator or administrator)

Disclosure obligations:

• CPR 31 – warn client at outset of obligations and requirements to preserve any docs which may be relevant (electronic form also PD31B)

Pre-action disclosure:

• Norwich Pharamacal orders may be awarded by the court – party must show:

1. No other relevant CPR 1998 provisions

2. Respondent likely to have relevant docs or info

3. Respondent is not a mere witness who could be called to give evidence or produce docs

4. Order is necessary in interests of justice

5. Court may also require a cross-undertaking in damages

• Apps should be made by issuing claim form in accordance with CPR r with respondent as D

• Supported by evidence in form of WS

• When app made on notice sensible to contact respondent asking for voluntary disclosure or info requested to save costs of app to the court

Complex Actions:

• CPR 20

• D may bring a claim against:

  • C (counterclaim)

  • Another D (contribution or indemnity)

  • TP (Not already a party)

• Courts aim is to have as few actions as possible with as few parties as possible

Causes of actions:

• CPR 7.3, C may use a single claim form to start all claims which can be disposed of in same proceedings

• If C has also served POC and wishes to introduce a new cause of action he cannot amend POC without permission of court or written consent of all other parties BUT court has discretion to allow amendment if new claim arises out of substantially the same facts

• CPR 19, once claim form served, courts permission required to:

• Add – if desirable for...