Explaining the UK litigation process for international clients
The English courts are used in many international contracts even though the subject matter of the dispute or the parties involved may be outside of the UK.
If you are from outside of the UK and you wish to bring a claim in the courts of England or Wales, you need to understand the process involved. We take a look at the litigation procedure and key points to be aware of.
Our litigation team have wide experience in successfully bringing and defending complex cross-border and high-value cases. As well as legal expertise, we offer outstanding service, ensuring you have the support and guidance you need.
If you would like to talk to one of our civil litigation experts, ring us on 020 3968 6030, email us at firstname.lastname@example.org or fill in our contact form and we’ll be happy to help.
Before a claim is issued in the courts, you need to ensure that you have complied with the pre-action protocol. This is a process set out in the Civil Procedure Rules or CPR, a set of rules governing the way in which litigation is conducted in England and Wales.
Failure to comply with the CPR can result in penalties, for example, in respect of costs, so it is important to follow the directions closely.
The pre-action stage of the process is designed to try and resolve matters without the need for a hearing. You will be required to set out your claim in a letter to the defendant, including:
- Details of what has happened
- The law that has been breached
- The remedy you are seeking
The defendant should respond to this with their own version of events and point of view. During this process, it is expected that relevant documents will be disclosed.
It is also recommended that where the dispute cannot be settled, alternative dispute resolution is considered, for example, mediation. Mediation involves working with a neutral third party who will help both sides to negotiate and consider the options open to them. A resolution can only be reached if both parties agree to it.
If options such as alternative dispute resolution are not properly considered prior to a trial and the parties do not make adequate attempts to resolve the matter, the court could impose penalties when considering the issue of costs.
The claim form
If the matter cannot be dealt with during the pre-action stage, the next step is normally to issue a claim form. You will need to identify the correct court in which to issue proceedings and the relevant court fee will need to accompany the claim.
Particulars of claim should also be sent with the claim for or within a certain period thereafter. This is a document setting out details of the claim together with the remedies that you are asking for.
The court will seal the claim form and return it to you to be served on the defendant.
The court fee will depend on the amount of money being claimed.
For claims in the sum of £5,000 to £10,000, the fee is £205.
For claims of £10,000.01 to £200,000, the fee is 5% of the amount claimed.
For claims over £200,000, the fee is £10,000.
Service of the claim form
Once the court has issued the claim form, it needs to be served on the defendant or their solicitors within four calendar months of the date of issue. If the defendant is outside of the UK jurisdiction, this is extended to six months. It may be possible to ask for an extension as the Foreign Process Office advises that some countries may take several months to formally process a claim form for service. An application for an extension must be made within the six-month period.
It is crucial not to miss the deadline or the claim is likely to be struck out.
The claim form must be served on the defendant in accordance with the CPR. There are strict rules about acceptable methods of service and it is important to ensure that service complies with these. Personal service or handing the claim form to the defendant or senior company personnel or first class post are all usually acceptable. If the defendant has instructed solicitors, then the claim may be served on them if they agree to accept service.
Initial disclosure can be made at the same time that the claim form is served and may be compulsory in many types of cases.
Each party in litigation needs to advise the other of the relevant documents that they hold. These should be available for inspection or copies provided to the other side.
Before you start litigation, you should look carefully at all of the relevant documents in your possession. Relevant documents are all likely to be given to the other side, including documents which adversely affect your case. You are advised to take advice before commencing a claim to ensure that it is in your best interests to do so and that the strength of your case will be supported and not damaged by the disclosure of all of the documents in your possession.
Some documents may be classed as privileged, meaning they do not have to be disclosed. The rules in respect of privilege are strict and you need to be absolutely clear on what you can protect from the outset.
Privilege can arise in respect of legal advice and in respect of litigation.
Legal advice privilege seeks to protect communications between a lawyer and their client where the purpose is to give or receive legal advice. This does not mean that all communications including a lawyer will be privileged, however. However, and by way of example, communications between a company and its in-house lawyers may not always be privileged, even if marked ‘legally privileged and confidential’ and it is important to take care when creating documents.
Communications between a lawyer and a company employee may not be privileged if the employee is not authorised to give instructions to the lawyer. Where a third party, such as an accountant, is included in the communication, legal advice privilege is generally lost.
Litigation privilege protects communications between a party to litigation and their lawyer and a third party which have taken place either while litigation is being contemplated or after it has commenced. The communication must be mainly for the purpose of litigation, referred to as its ‘dominant purpose’. These communications should be marked ‘legally privileged and confidential’.
Privilege can be complex and you are advised to speak to an expert if you have concerns over what documents you may be able to protect in this way.
Evidence in civil litigation is generally presented in the form of witness statements. These should be in the witness’s own words and can only include information of which the witness has personal knowledge and which are relevant to the case.
The witness will also be called to court to give oral evidence and asked to confirm that the information included in the statement is true as well as for questioning.
The courts have the power to make an interim order while proceedings are ongoing. This could be:
- An asset freezing order
- An injunction
- A search order
- An order for specific disclosure
- An order for payment into court
Several of these orders are intended to prevent assets from being moved out of reach. In some circumstances, the court will issue a worldwide freezing injunction in respect of assets outside of the UK.
If this type of interim remedy is sought, it is crucial to provide full and frank disclosure to the court in advance. Failure to do so is likely to be penalised.
Security for costs
If the claim is an international claim or a defendant is making a counterclaim, the court may be asked to order security for costs. This is an order requiring one party to pay money into court so that, should they lose, the court can be sure there will be funds available to cover the other side’s costs.
Considerations for parties based outside of the UK
For international claimants seeking to bring a claim in England or Wales, care needs to be taken that the relevant English law applies as not all law may apply even though the contract states that English law will apply. For example, the Unfair Contract Terms Act 1977 provides at section 26 that, ‘The limits imposed by this Act on the extent to which a person may exclude or restrict liability by reference to a contract term do not apply to liability arising under [an international contract]’.
The trial process
Once the parties have produced a trial bundle of all of the documents which will be referred to in the trial and lodged skeleton arguments with the court setting out the points they intend to make, the trial can begin.
There is often a pre-trial review where the court will deal with case management issues. In the hearing itself, each side will have the opportunity to make an opening statement and then allowed to call witnesses of fact and expert witnesses. Each side will have the opportunity to question the other side’s witnesses.
Once all evidence has been heard, closing statements are made and the court will consider its decision. It could take several weeks or months for the decision to be made, depending on the complexity of the case.
As well as making an order in respect of the issue in contention, the court will also make a costs order. It is common for the losing party to be ordered to pay the winning party’s reasonable costs.
However, if costs are disproportionate to the amount recovered, the court may subsequently reduce the amount allowed. Similarly, if the winning party has not followed the CPR or failed to properly consider alternative dispute resolution, they could be penalised when it comes to costs.
If the losing party has made an offer to settle prior to the trial, known as a Part 36 offer, and this offer is rejected, the winning party is likely to be liable for costs from the date of the Part 36 offer onwards if they fail to beat the amount offered.
If the Part 36 offer is equalled or exceeded, the winning party is entitled to their costs on an enhanced basis, including interest at up to 10% above the base rate on both the damages award and the costs. The court also has the discretion to impose a substantial financial penalty on the defendant.
A bill of costs is generally drafted and dealt with in separate legal proceedings.
It may be necessary to enforce a judgment if the defendant fails to pay. Options include:
- A third-party debt order enabling the claimant to recover money from another organisation or individual who owes money to the defendant
- A charging order over property
- Seizure of goods which will subsequently be sold at auction
Where assets are not within the UK jurisdiction, options will depend on any arrangements with the other country in question.
A range of funding arrangements may be available depending on circumstances. These may include:
- Conditional fee agreement or CFA
- After the event or ATE insurance
- Damages Based Agreement or DBA
Conditional fee agreements CFAs
A conditional fee agreement, sometimes referred to as ‘no win, no fee’ can be offered in appropriate cases. Only high value cases with a good chance of success and enforcement usually qualify for a
CFA. If the claimant is successful, there is an uplift in the legal fees paid to compensate for the risk. This success fee is not usually recoverable from the paying party.
After The Event – ATE – insurance
An insurance policy can be purchased which would pay out in the event that the litigation was unsuccessful. This will generally cover expenses such as counsel’s fees, expert’s fees and the other side’s costs.
It may be possible to arrange an insurance policy to pay the insured’s own costs in some circumstances. The cost of an ATE policy is not usually recoverable against the paying party.
Damages Based Agreements – DBA
The DBA is another form of ‘no win, no fee’ which can be offered in appropriate cases. Only high value cases with a good chance of success and enforcement usually qualify for a DBA. If the claimant is successful, the claimant will pay an agreed percentage of the damages awarded. Costs should still be recoverable from the other side and be assessed in the usual way.
At Lincoln & Rowe we represent clients involved in a full range of litigation in the English courts. We have a high level of experience, to include in respect of complex and high-value cases.
If you are considering bringing a claim in the UK, we can put together a strong case on your behalf and provide you with expert representation. We are pleased to announce that we have won the Global Awards by ACQ5 award for Best Firm for Commercial Disputes London 2023. We were named as the ‘Commercial Disputes Specialists of the Year’ in the Corporate Livewire Innovation & Excellent Awards 2020 as well as ‘Boutique Litigation Law Firm of the Year’ in both the 2019 and 2020 Global Awards by ACQ5. Partner Dipesh Dosani was named Commercial Litigation Lawyer of the Year in 2019 and 2020 in the ACQ5 Law Awards.
If you would like to talk to one of our expert civil litigation team, ring us on 020 3968 6030, email us at email@example.com or fill in our contact form and we’ll be happy to help.
The above information is for general guidance on your rights and responsibilities and is not legal advice. If you need more details on your rights or legal advice about what action to take, please contact an adviser or solicitor.