litigation

Litigation is a court based dispute resolution process to resolve disputes.  The Civil Procedure Rules govern the conduct of legal proceedings in the United Kingdom. It does so by setting out the procedural and some substantive matters that must be complied with by litigants – that is, the procedural regime by which litigants must interact with UK courts and what must be done by litigants to achieve the ends that they wish to obtain whether they participate in the proceedings as claimants, defendants, counter-claimants or joined as third parties for contribution or an indemnity.

What makes litigation different?

Legal proceedings differ from other methods of dispute resolution for two primary reasons. The role of the courts in the judiciary is to finally and conclusively determine the legal rights of litigants. There is no recourse against a decision on the merits of a case other than by way of appeal to a higher court in the judicial hierarchy: the decision is res judicata.  The other is that courts have the ability to enforce its judgments and orders.

Forms of Litigation England

Legal proceedings (also legal action, or civil lawsuits) are commenced in legal proceedings by issuing a Part 7 Claim Form, Part 8 Claim Form or a petition. The references to "Part" is a reference to the Civil Procedure Rules which set out the rules of practice and procedure in English Courts.

The most common form of proceedings are those issued under CPR 7. CPR 8 proceedings are used on occasions when there is no substantive dispute of fact between the parties. Petitions are used in the context of winding up insolvent companies, bankruptcies and divorces.

CPR 7 Proceedings

Litigation is a court based dispute resolution process, characterised by

1. preparation of formal statements of case (aka pleadings) by the parties to the litigation. Specific instances of pleadings include 'particulars of claim', 'defence', 'reply to defence' and 'counterclaim';
2. exchanging documents with the other parties to the litigation;
3. production of evidence, and
4. the trial before a judge.

Potential Complexity

In a straightforward CPR 7 Claim, a claimant sues the defendant. That claim may include assertions of legal liability based on the facts alleged on a number of different grounds.

Many cases are more complicated than this. The defendant may not only wish to defend all of the claims brought by the claimant, but may also:

1. make a counterclaim against the claimant for liability which is connected in some way with one of the claims made by the claimant;
2. join other parties to the proceedings to make claims against them, which might include a claim for contribution, claim an indemnity or some other claim which, if successful, would establish legal liability against a third party or a series of third parties.

When a defendant alleges that a third party is liable on the claim, they must be added as a party, so that all of the relevant party to the proceedings, that is, joinder of an additional defendant.

Defendants are routinely added to UK legal proceedings where it would serve to avoid or reduce multiple sets of legal proceedings being commenced by the different parties.

Litigation Basics

Litigation is a process to resolve disputes. Assuming the relevant parties to the proceedings are named as claimant(s) and defendant(s), the basic steps in the process of resolving disputes under CPR 7 are:

Statements of Case

• The claimant files a claim form (ie the “issues”) at court.
• The claim form is served with particulars of claim (which may be in the claim form, usually as in a separate document), which sets out allegations of fact which lead to the assertion that a legal right has been breached by the defendant.
• The defendant files an acknowledgement of services within 14 days of service of the claim form and particulars of claim.
• The defendant files and serves a defence within a further 14 days.
• The defence sets out the defendant’s own version of the facts which the defendant says (as the case may be):
  • do not render the defendant liable for the claims of the claimant
  • limits its liability of the defendant to the claimant, or
  • admits all or part of the claim.
• The claimant files and serves a reply to defence, which responds to the allegations of fact set out in the defence. The claimant is not entitled to introduce new causes of action in the reply – the place for setting out causes of action is the particulars of claim. The reply to defence assists to narrow the disputes between the parties and focus on the issues that are in dispute.
• After a reply has been filed or a claimant declines to file a reply the pleadings are said to be closed. The litigation then moves on to procedures relating to evidence.

Directions Questionnaire/Case Management

• After the pleadings have closed, each of the parties to litigation is required to file an directions questionnaire.
• Directions questionnaires allow the court to assess the resources required by the court to determine the dispute. These matters include:
  • nature of the claim and counterclaim
  • value of the claim
  • relief sought by each party, and
  • the number and location of witness.
• There are three tracks in English Courts: the small claims track, the fast track and multi-track. Commercial litigation is usually allocated to the multi-track, and for claims under £25,000 but not less than £10,000, the fast track.
• In case management conferences, the court will assess the appropriate track that the litigation will proceed on and make case management directions which set out the procedural steps that the parties must comply to move towards trial.
• Ideally, the parties will agree case management directions with a draft order to be approved by the Court. If a draft order is not proposed or not agreed, the court will convene a case management conference and fix directions.

Disclosure

• Usually, the first procedural step in the case management directions is for the parties to give disclosure.
• Disclosure is a process designed to ensure that the parties have access to the same documents which are relevant to the issues in dispute in the litigation. The issues in dispute are those defined by the statements of case which have not been admitted by the other party.
• The courts maintain the policy that parties should not be entitled to surprise one another at the trial. Moreover, parties are not entitled to suppress evidence which would interfere with the prospects of success of another party to the litigation. 
• Each of the parties to legal proceedings are required to disclose, to other parties in the litigation, documents in their custody or control that:
  • it relies upon to support their case
  • adversely affects its own case, or
  • supports the case of any other party involved in the case.
• There are very limited but important exceptions to the duty of litigants to disclose documents, such as documents protected by legal professional privilege.
• Simply because a document is considered confidential by one of the parties is no basis to refuse to disclose it.
• Standard disclosure is given by list (that is, a list of all documents which must be disclosed) and supported by a disclosure statement.
• After exchange of these lists, the documents appearing in the list are made available for inspection to the other litigants.

Evidence: Lay Evidence and Expert Evidence

• Courts require parties to prove the facts that they allege in the statements of case which they file.  The allegations in those documents are simply that a particular event or fact existed at one time or another. 
• Filing of evidence on the other hand is a process to positively prove allegations made in the statements of case and/or to show by evidence that allegations made in the other party’s statements of case are denied.
• Parties wishing to adduce evidence to the court must do so by filing and serving witness statements. This is the evidence in chief for each of the parties.
• Lay evidence is simply evidence in support of a party’s case which is not that of an expert.
• In cases where it is appropriate to have expert evidence considered by the court, that evidence that is prepared by a person specialised in a particular field relevant to the disputes (for instance, questions of foreign law, the value of a property, a surveyor’s report). If the dispute involves detailed analysis of a company’s accounts, a forensic accountant may be required to assist the court in making its determination on the quantum of damages to be awarded; if the dispute relates to defective software, an expert may be required to analyse the software and come to conclusions in respect to the software.
• Although experts are briefed by the parties, they owe a duty to the court to be independent of the party instructing them to prepare their reports.
• Witnesses must present themselves at the trial for cross-examination.

Final Hearing/The Trial

• Once the parties have pleaded their cases, given disclosure, prepared witness statements upon which they intend to rely, and the other pre-trial processes which have been ordered to take place in the case management directions, the court will set a date for the parties to appear in court to present their arguments and evidence in support of their case.
• At the trial, the parties will have the opportunity to (1) make an opening statement, (2) cross-examine the other party’s witnesses, and (3) make a closing statement.
• Each of the parties are given a fair hearing whereby they have the opportunity to contest the other party’s case and the correctness of the allegations and evidence presented by them to the court.

Judgment

• After the trial, the court may decide to give judgment immediately.
• More often judgment is reserved so that the court has an opportunity to examine the arguments and evidence presented after the hearing, to enhance the opportunity to reach the correct decision on the submissions and evidence presented to it during the course of the hearing.
• When the court gives judgment, the defendant will be found wholly or partly liable, the claim will be wholly or partly dismissed, or a combination of both.
• In the event that the defendant is found liable, the court will have considered whether the relief sought by the claimant ought to be granted. The common forms of relief in commercial litigation are:
  • Damages or an account of profits;
  • Final Injunction;
  • An order for delivery up and destruction.
• At this stage, the court may order the quantum of damages or account of profits to be paid. After determining liability, it is open to the court, to order that an inquiry as to damages or account of profits take place. If an inquiry or an account is ordered, quantification of the sum to be paid by the successful party will take place on another occasion before the court.

Assessment of Quantum of Liability

• In the event that the claimant is successful and is awarded damages and the calculation of damages envisaged requires detailed examination, or there is some other good reason to do so, the court will order that an enquiry as to damages or account of profits (at the option of the claimant) takes place.
• An enquiry involves filing of evidence which will be assessed at the damages hearing.

Costs

• Costs are said to follow the event. The successful party is usually entitled to a costs order in its favour, unless the successful party has engaged in some form of disentitling conduct.
• This general rule may also be displaced by offers (including Part 36 Offers) put to the other party prior to and during the litigation.

The foregoing sets out the basic steps in litigation with a brief explanation of each step. Rarely is litigation this straightforward. This indicative process does not account for a variety of procedures that may take place after litigation has been commenced.

Permutations and Variations in Litigation

In addition to this, contingencies in different sorts of commercial litigation which may differ depending upon the track to which the proceedings are allocated or the size of the claim, whether there is a specialist list for the type of legal proceedings and other factors.  Some of the factors that affect how litigation may progress are as follows:

1. Interim relief and interim Injunctions
   There may be circumstances prior to the proceedings which justify the parties applying for preliminary relief, either without notice or on notice to the intended defendants.
   Freezing Orders: It may be that the defendant has a history of sharp conduct or dishonesty which would warrant the court making an order to freeze the assets the defendant. It stops defeat of a judgment by moving assets outside the jurisdiction of the court or disposing of them within the jurisdiction. In cases such as these, freezing orders prevent the defendant from dealing with their assets in a way which would in effect defeat the jurisdiction of the court.
   Search Orders: There may be good grounds to suspect that if the defendant was served with legal proceedings in the usual way, the defendant may dispose of evidence which would deprive the claimant of a fair trial. In these circumstances, the court may be inclined to make a search order, which in effect requires the defendant to grant the claimant access to the premises where evidence is kept for the purpose of collecting and preserving evidence pending the trial.
   Norwich Pharmacal Orders: The claimant may have a claim against a person, but is not able to identify the relevant defendant(s) in order to commence proceedings. A Court may be inclined to order innocent third parties who have information which may lead to the identification of such persons to produce that documentation to the intending claimant, so that the claimant can issue proceedings against the appropriate defendants.

2. Stays of the Proceedings
   English courts encourage the parties to engage in mediation at an early stage, so as to maximize the prospects that the parties are able to compromise their claims without proceeding to the trial.
   Stays of the proceedings may be granted for a limited amount of time to facilitate the process of doing so.

3. Default Judgment
   Where a defendant has been served with the originating process (claim form and Particulars of Claim), it is required to file an Acknowledgement of Service within 14 days of service of the claim form (if a defence is not filed by that time).
   Should the defendant fail to do so, the claimant will be entitled to apply for Default Judgment in order to bring the proceedings to an end and obtain a judgment.

4. Summary Judgment
   In the event that the particulars of claim, defence, counterclaim or defence to counterclaim does not have a real prospect of success, a litigant may apply for Summary Judgment to avoid an otherwise wasteful process of allowing the dispute to proceed to the trial.
   If an application for summary judgment is successful, the claimant/defendant has a judgment that is able to be enforced far earlier than what would otherwise be the case.

6. Other Interim Applications
   Other applications may be made by litigants where the opposing party does not comply with the timetables fixed by the court or by the Civil Procedure Rules. This includes failure to:

5. 1. respond to requests for further information and clarification;
   2. file an allocation questionnaire;
   3. comply with case management directions, such as being ready to give disclosure or exchange evidence in accordance case management directions;
   4. file and service documents, such as pre-trial questionnaire.
6. Expert Evidence
   In addition to the evidence given by the parties to support their claims, expert evidence may also be required to be filed and served, for the purpose of assisting the court determine issues of liability between the parties.
   The need for expert evidence is usually dealt with at the first case management conference, or in the directions made in lieu of the conference.

7. Foreign Defendants
   Complexities arise from foreign defendants not being domiciled within the jurisdiction. In order to sue a foreign defendant who is not based in the European Union, English Courts require that claimants apply to serve the claim form and particulars of claim outside the jurisdiction of English Courts.
   Applications for service out of the jurisdiction are usually made to Masters of the High Court or judges sitting in the relevant County Court. Applications may be decided on the  the documents presented to the court or after an oral hearing. It is for the claimant to prove to the satisfaction of the court that the case is suitable  for the court to exercise its extraterritorial jurisdiction over the defendant. There are well-established grounds for doing so.

8. Disclosure
   The disclosure given by a party may be inadequate or incomplete or somehow defective. In instances such as these, the party may wish to correct the position by applying for court orders for specific disclosure. In this way, the party would be required to correct the defect, and in the event of continued failure to disclose, potentially have the claim or defence (as may be the case) made the subject of a strike out application.

9. Amendments to Statements of Case and Joinder
   Other contingencies may arise such as:

9. 1. A party wishing to amend its statement of case, either by adding or removing claims against the claimant or a defendant;
   2. Where a defendant wishes to join a third party on the basis that they may be jointly and severally liable or liable on a claim for contribution or indemnity for the claim made against the defendant;
   3. Adding a defendant to claim for contribution, arising from liability established against an existing party (if it is established).
10. Counterclaims
    The defendant may itself have a cause of action against the claimant. When a defendant files its defence, the defendant may have a counterclaim and elect to file and serve a counterclaim against the claimant, rather than simply defend the claim by filing and serving a defence. Counterclaims must be filed with the defence; to do so any later requires the permission of the court. The counterclaim may also be brought against a person who is not already a claimant to the proceedings.
    A counterclaim is a claim by a defendant that may or may not be related to the claim. For instance, the claim (by the claimant) may be for a debt said to be due and payable arising from the supply of goods; the counterclaim made by the defendant may be a claim for damages arising from the supply of those same goods supplied by the claimant.

11. Additional Claims
    A defendant may also bring an additional claim; counterclaims are technically additional claims. An additional claim is a claim for contribution or indemnity against a person who is already a party to the proceedings and/or another person who is not already a party to the proceedings.
    Both counterclaims and additional claims are treated in the procedural sense in the same way as the original claim of the claimant. Additional claims are dealt with procedurally in the same way as claims.

12. Multiple Claimants and Defendants
    Several individuals may have a claim based on similar facts against a single defendant, or a claimant or several of them may have a claim against a number of defendants. In these cases, a number of claimants or defendants may be listed on the particulars of claim.
    Multiple defendants are joined to proceedings on the basis that the legal entities are somehow related to the claim. They may be jointly or severally liable for the claim, or a defendant may look to join another legal entity on the basis that  for example the new defendant is liable for contribution or share responsibility for the alleged claim by way of an additional claim.
    Litigation is at its most basic a simple process of fairly resolving disagreements between disputing parties. The process is able to be adapted to cater for vast complexity to deal with multi-million pound disputes and many parties. Courts regularly do so.

Specifics: Details on the major Events in Litigation

Case Management

Courts have extensive case management powers to regulate legal proceedings. After the pleadings have closed (that is, the reply is filed, or if none is filed, the Defence), the Court will allocate the proceedings to a "track", that is the small claims track, fast track or multi-track. The allocation questionnaires are used to inform the court of the likely resources required to be allocated to the conduct of the proceedings.

If the proceedings are of a particular type, the proceedings may be required to be directed to a specialist court or list, such as the intellectual property claims. Claims in a specialist list should be commenced in the list designated to handle cases of that sort. For instance intellectual property claims are heard in either the Intellectual Property Enterrise Court or the Intellectual Property list in the Chancery Division of the High Court. 

Cases allocated to the fast track or multi track invariably require greater resources of the court and the parties to advance to trial, and these step to trial are reflected in the case management directions.  The case management directions set the timetable for the litigation, most often up to after disclosure has taken place or a few weeks before the trial.

Disclosure

In the process of preparing its list of documents, parties to proceedings must conduct a reasonable search for documents that may be relevant to the proceedings. In the modern law, a document means anything in which information of any description is recorded, and so includes electronic media of any sort no matter where it is stored.

The extent of the search depends on the number of documents that may be located in a place; the nature and complexity of the proceedings; the ease of retrieval (including cost factors), and the significance of the documents that may be located during the search. Where a party does not search for a class or category of document on the basis that it would be unreasonable, they must include a statement to that effect in the disclosure statement.

The types of documents which  may be disclosed include diaries and diary notes; communications by letter, email and instant messaging; maintenance records; notes; databases, back-up systems, meta-data, where applicable where that evidence meets the requirements of disclosure for the particular case.

The seriousness of the task of disclosure should not be underestimated. Where the party to the proceedings is a company, a responsible officer of the party must sign a disclosure statement, which is a sworn statement affirming that a proper and reasonable search has been conducted and all documents located as a result of that search have been disclosed.

Evidence

The pleadings set out at the outset merely allege the facts that the claimant intends to rely upon at the hearing. As there are mere allegations of fact, it is left for the person alleging those facts to prove them. In the absence of an admission of the facts alleged by the claimant in the particulars of claim, the claimant must prove each and every one of the alleged facts that make out the cause of action in order to succeed at the trial.

For many years, parties would call witnesses at the trial and those witness would give evidence orally to the court for the party that called them as a witness.  This was known as giving evidence in chief. The witness would then be made available for the opposing parties for cross-examination; after cross-examination, the claimant would then be available for reexamination by the party that called them.

The modern court process dispenses with the first part of this process, the giving of evidence in chief orally.  Evidence in chief is now given by witness statement supported by statement of truth. At the trial, the witness must be made available for cross-examination.   This process therefore requires preparation of evidence in a documentary form – namely, witness statements.

The allegations of fact that are to be proved must be proved by evidence.  In the absence of an admission by the defendant in respect to any particular factual allegation, none of facts alleged in the particulars of claim – therefore the claim will fail and the defendant will successfully defend the claim.

The case management directions will fix dates for the exchange of witness statements.

Courts maintain the power to regulate the evidence used in legal proceedings.  The court may take steps to ensure:

1. only relevant evidence is heard;
2. the best evidence of a particular fact is used to prove each allegation made by the party, with an emphasis on the relevance, weight of the evidence and probity of the evidence;
3. evidence that may be manufactured is excluded.

Lay Evidence

Lay evidence is the evidence of persons who are not experts in a field of expertise and therefore are the individuals called to give evidence for the parties calling them.  Witnesses are restricted to giving evidence on matters which are in their own personal knowledge, that is what they themselves have seen or heard, or have been informed by another person whom they believe (the latter is referred to as evidence of information and belief).

The weight of the evidence given by a witness will depend upon the circumstances of the case, and often involves an assessment of their physical capacity to perceive and recall the facts given in evidence (for instance, poor eye sight, poor memory), motivation to give a biased or otherwise slanted account of the facts; whether the person is of bad character and that character is relevant to the facts of the case.

Confidentiality of matters of fact relevant to the proceedings is no reason for withholding such evidence in court.  Also, opinions of lay witnesses are not admissible unless the opinion is within their general knowledge or competence, such as the speed a car was travelling. For instance, an opinion that an act was not an infringement of copyright is not admissible as evidence that an infringement took place. These are matters for the court to decide.

Expert Evidence

In legal proceedings in English Courts, foreign law must be proved in English litigation as a fact, in the same way as any other allegation of fact. English Courts are not competent to construe or interpret foreign law. The force and effect of foreign law in English litigation is presented to courts by way of expert evidence. It is for the judge to determine the effect of the foreign law on the facts of the case.

An expert in the foreign law is required to produce the contents of the foreign law, such as legislation and unwritten law; explain how a court in the foreign jurisdiction would interpret and apply the provision on the facts before the judge in English litigation; and where available, produce relevant authorities and their status within the overseas jurisdiction.  There is no necessity that the expert is a lawyer in the relevant jurisdiction, provided that they are otherwise appropriately qualified to the satisfaction of an English court.

Expert evidence is subject to strict formal requirements to ensure that the expert is well aware of his duties to the court, which supersede his obligations to the party that has engaged him. 

The Trial

The way the trial is conducted is affected by a number of factors which may include in any given case, whether the law is clearly defined, disputes in respect to evidence (whether an expert report or lay evidence), limited evidence; the nature and extent of admissions made by the parties; of issues that have been raised.

A trial presumes that the interim processes of the trial are complete.  So, the pleadings will be closed, parties have given disclosure and evidence in the form of lay witness statements and expert evidence have been exchanged. In addition, settlement negotiations may have progressed and offers exchanged.

A pre-trial review may be convened by the court in complex cases about 8 weeks before the trial to ascertain the state of readiness of the parties. The court may wish to hear the legal representatives for the parties on matters such as (1) statements of case, (2) the issues to be dealt with at trial, (3) identify whether a trial of any preliminary issues may save costs or time, (4) the evidence to be used at the trial.

In the time leading up to the trial, legal representatives will  ensure that notices of admissibility have been served; complete pre-trial checklists; serve witness statements ; prepare lists of authorities; ensure relevant recent events are incorporated into evidence (such as events contributing to financial loss); prepare, file and serve  trial bundles and make other final preparations for the trial as the particular case requires; ensure that gaps and weaknesses in evidence are minimized; prepare skeleton arguments; prepare to cross-examine opposing witnesses.