Litigation and enforcement in the UK (England and Wales): overview
by Oliver Cain, Danielle Carr and William Russell, SCA ONTIER LLP
A Q&A guide to dispute resolution law in the UK (England and Wales).
The country-specific Q&A gives a structured overview of the key practical issues concerning dispute resolution in this jurisdiction, including court procedures; fees and funding; interim remedies (including attachment orders); disclosure; expert evidence; appeals; class actions; enforcement; cross-border issues; the use of ADR; and any reform proposals.
To compare answers across multiple jurisdictions visit the dispute resolution Country Q&A tool.
This Q&A is part of the global guide to dispute resolution. For a full list of jurisdictional Q&As visit www.practicallaw.com/dispute-guide.
Main dispute resolution methods
1. What are the main dispute resolution methods used in your jurisdiction to resolve large commercial disputes?
The default method of resolving large commercial disputes in England and Wales is by way of High Court litigation, often in specialist divisions such as the Commercial Court.
The system is adversarial in nature. Parties must prove their case on the balance of probabilities. Therefore, for a court to be satisfied that an event occurred, it must find on the evidence presented before it that the occurrence of the event was more likely than not.
The litigation process is governed by the Civil Procedure Rules and various specific guides that apply to specialist courts (such as the Admiralty and Commercial Courts Guide and the Chancery Court Guide).
The courts require parties to:
When entering into an agreement, the parties can choose to submit any disputes that may arise to arbitration. Arbitration differs from litigation in the following ways:
All parties must agree to submit the dispute in question to arbitration.
The procedural rules that apply are chosen by the parties.
The proceedings are usually confidential in nature.
Decisions on the merits are final and are not subject to appeal (although in certain limited circumstances the court of the seat of the arbitration can set aside the award).
Arbitration awards are enforceable under the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.
2. What limitation periods apply to bringing a claim and what triggers a limitation period?
The Limitation Act 1980 (as amended) specifies the time within which proceedings must be commenced to prevent the claim becoming time barred. If the limitation period has expired, the defendant will have a complete defence to the claim.
The limitation period varies according to the nature of the cause of action. The limitation periods for some common claims are:
Simple claims in contract: six years from the date of the breach of contract.
Claims brought in respect of deeds: 12 years from the breach of the obligation contained in the deed.
Tort (excluding personal injury and latent damage): six years from the date the damage is suffered.
Personal injury: three years from the later of the date the damage occurred or the date of knowledge of the person injured.
Negligence (in respect of latent damage): the later of six years from the date the damage occurred or three years from the date on which the claimant had the requisite knowledge and the right to bring such an action. This is subject to an overriding time limit of 15 years from the date of the negligent act or omission, regardless of when the damage was discovered.
Fraud: six years, but time only starts to run when the claimant discovered the fraud, or when he or she could, with reasonable diligence, have discovered it.
Defamation: one year from the date of publication of the defamatory act.
These dates should only be treated as a general guideline as the expiry of the limitation period can vary according to the precise circumstances of the case.
3. What is the structure of the court where large commercial disputes are usually brought? Are certain types of dispute allocated to particular divisions of this court?
Large commercial claims are currently heard in one of the divisions of the High Court. The two divisions of the High Court that deal with large commercial claims are the Queen’s Bench Division (QBD) and the Chancery Division.
The QBD deals with a wide range of claims including contract, negligence, breach of statutory duty and defamation. It has various specialist divisions that deal with commercial claims, namely:
The Commercial Court, which hears any claims arising out of the transaction of trade and commerce, including claims:
relating to business documents or contracts;
relating to the export or import of goods;
relating to insurance and reinsurance;
relating to banking and financial services;
relating to the operation of markets and exchanges;
relating to the purchase and sale of commodities;
relating to the construction of ships;
relating to business agency; and
arising from arbitration proceedings.
The Admiralty Court, which hears certain types of maritime claims including salvage, ownership of ships and damage done by or to ships.
The Technology and Construction Court (TCC), which hears construction and technology-related cases.
The Chancery Division deals with disputes relating to business, property, companies, insolvency, trusts, competition, patents and IP. It includes four specialist courts, namely the Companies Court, the Bankruptcy Court, the Patents Court and the Intellectual Property Enterprise Court.
The Financial List sits across the Commercial Court and the Chancery Division. The scope of the Financial List covers:
Claims for more than GB£50 million that principally relate to loans, project finance, banking transactions, derivatives and complex financial projects, financial benchmark, capital or currency controls, bank guarantees, bonds, debt securities, private equity deals, hedge fund disputes, sovereign debt or clearing settlement.
Claims that require particular expertise in the financial markets.
Claims that raise issues of general importance to the financial markets.
From July 2017, the specialist divisions of the High Court are to be known as the “Business and Property Courts of England and Wales”.
The Business and Property Courts will act as a single umbrella for the Commercial and Admiralty Courts, the TCC, the Financial List, and the Courts of the Chancery Division (which will be renamed according to the particular practice area, including the Business Courts, the Company & Insolvency List, and the Intellectual Property List).
The new arrangement will preserve the familiar practices and procedures of these courts, while allowing for more flexible cross-deployment of judges.
Rights of audience
4. Which types of lawyers have rights of audience to conduct cases in courts where large commercial disputes are usually brought? What requirements must they meet? Can foreign lawyers conduct cases in these courts?
Rights of audience/requirements
Solicitors who have obtained higher rights of audience under the Solicitors Regulation Authority Higher Rights of Audience Regulations 2011 have full rights of audience in the High Court, Court of Appeal and Supreme Court.
Barristers automatically have full rights of audience in these courts.
In general, a party can represent itself in court proceedings. A company can only be represented at trial by an employee who is authorised by the company to do so if the court gives permission. In addition, a foreign company that is not represented by English lawyers must give a local address for service of documents (which is usually the address of the company’s solicitors).
Registered European lawyers are granted rights of audience when they are admitted or registered in England and Wales. However, they cannot appear in the High Court, Court of Appeal or Supreme Court unless they have obtained higher rights of audience. The position in this regard may change when the UK leaves the EU.
Non-EU lawyers have no rights of audience in English courts.
Fees and funding
5. What legal fee structures can be used? Are fees fixed by law?
The traditional method of charging is to charge for the amount of time spent according to an hourly rate for each fee earner involved. Fixed fees are sometimes agreed for particular stages of litigation, but the course of litigation and the issues that arise are inherently unpredictable. Therefore, fixed fees are rarely practical for all or significant parts of large commercial cases.
Fees are not fixed by law in large commercial claims.
Lawyers can enter into arrangements with their clients under which their remuneration is related to the outcome of the case. The two types of contingency arrangements are conditional fee agreements (CFAs) and damages based agreements (DBAs).
A CFA is a funding arrangement under which some or all of the lawyer’s fees are paid in certain specified circumstances. Generally, if the client loses the case, it will not be liable to pay the fees and any expenses that are subject to the CFA (the conditional fees). If the client wins the case, it will be liable to pay all fees and expenses, including the conditional fees, and a success fee (capped at 100% of the conditional fees). Success fees are no longer recoverable from losing opponents, except in certain very limited circumstances. Therefore, the number of CFAs being entered into in large commercial claims has fallen considerably.
DBAs are agreements between a representative and a client under which the legal representative’s agreed fee is determined as a percentage of the compensation received by the client. The agreed percentage of damages is limited to 50% in commercial claims. If the claim fails, the solicitors will not be paid anything. DBAs are rarely used due to limitations and uncertainty as to the regulations that govern them. Reform to encourage the greater use of DBAs is anticipated in the future following recommendations published by the Civil Justice Council in September 2015.
6. How is litigation usually funded? Can third parties fund it? Is insurance available for litigation costs?
Traditionally, parties fund commercial litigation with a view to seeking to recover a proportion of their legal fees from the opposing party.
However, third parties can also fund the costs involved in litigation. This is generally known as litigation funding and it is now an important potential method of funding litigation. A third party who has no prior connection to the litigation agrees to finance all or part of the legal costs of the litigation in return for a fee payable from the proceeds recovered. In assessing a case for litigation funding, the funder will carefully consider:
The prospect of success. Funders will generally look for a prospect of success of more than 70%.
Whether the amount likely to be awarded is substantial and certainly at least four times the amount of costs likely to be incurred.
Whether the prospect of recovery from the unsuccessful party is high.
Third-party funding is not regulated but many funders follow a Code of Conduct for Litigation Funders and/or are members of the Association of Litigation Funders.
In some cases, clients may already have a general insurance policy that covers general legal expenses. Alternatively, parties can apply for ”after the event” (ATE) insurance in respect of the costs of litigation. ATE insurance can be purchased by solicitors on behalf of their clients and usually covers the client’s liability for disbursements incurred by its own lawyers and some or all of the opposing party’s legal fees and expenses which a claimant is likely to have to pay to a defendant if its claim is unsuccessful. The cost of purchasing ATE cover is no longer recoverable from an unsuccessful party as a result of reforms which took effect in 2013.
7. Are court proceedings confidential or public? If public, are the proceedings or any information kept confidential in certain circumstances?
Court hearings are heard in public, unless there is a good reason for them to be heard in private (such as where publicity would defeat the object of the hearing or if the hearing involves matters relating to national security).
Judgments and orders made at public hearings are available to non-parties to the proceedings. In addition, statements of case such as claim forms, particulars of claim, defences and replies can be obtained by non-parties without the court’s permission.
All other documents that are on the court file (whether or not they were referred to in court) can be obtained with the court’s permission. However, there is no presumption that disclosure will be permitted. Whether permission is granted will depend on various factors, including the applicant’s interest in obtaining the documents and whether the documents have formed part of the court’s decision-making process.
8. Does the court impose any rules on the parties in relation to pre-action conduct? If yes, are there penalties for failing to comply?
The rules relating to pre-action conduct are contained in the Practice Direction on Pre-Action Conduct and in 13 specific Pre-Action Protocols (which will increase to 14 on 1 October 2017). The Pre-Action Protocols set out specific procedures for certain types of claim. However, the pre-action procedure applicable to most large commercial claims will be the general provisions of the Practice Direction on Pre-Action Conduct, which states that before commencing proceedings the court expects the parties to have exchanged sufficient information to:
Understand each other’s position.
Make decisions about how to proceed.
Attempt to settle the issues without issuing proceedings.
Consider a form of alternative dispute resolution to assist with settlement.
Support the efficient management of those proceedings.
Reduce the costs of resolving the dispute.
The Practice Direction specifies the following required stages of the pre-action process:
The intended claimant should write to the defendant with concise details of the claim, including the basis on which the claim is made, a summary of the facts, the remedy sought, and if monetary, how the amount is calculated.
The recipient of the letter should respond within a reasonable time, being 14 days in a straightforward case and no more than three months in a highly complex case. The reply should confirm whether the claim is accepted and, if it is not accepted, the reasons why, together with an explanation as to which facts and parts of the claim are disputed and whether the defendant is making a counterclaim as well as providing details of any counterclaim.
The parties should disclose key documents which are relevant to the issues in dispute.
The courts expect compliance with the Practice Direction and the Pre-Action Protocols and they will take non-compliance into account when giving directions for the management of proceedings and when making costs orders.
9. What are the main stages of typical court proceedings?
Claims are commenced by issuing a claim form, which contains the names of the parties, details of the claim and its value. A court fee must be paid depending on the value of the claim. Once the claim form has been issued the claimant must serve it on the defendant within four months if the defendant is within the jurisdiction or within six months if the defendant is outside the jurisdiction.
The claimant must also prepare particulars of claim, which set out the case and the facts relied on. Generally, particulars of claim must either be:
Contained in, or served with, the claim form.
Served on the defendant by the claimant within 14 days of service of the claim form. However, if this date is more than four months since the issue of the claim form by the court, the particulars of claim must be served within the four-month period and the 14-day rule will not apply.
In the Commercial Court, if particulars of claim are not served with the claim form they must be served within 28 days after the defendant has filed an acknowledgement of service (of the claim form) indicating an intention to defend the claim.
The particulars of claim must include:
A statement of the facts on which the claimant relies.
Details of any claim for interest.
Details of the remedy sought.
Any other information relevant to the claim.
The contents of the particulars of claim must be confirmed by a statement of truth by which the signatory confirms his or her belief in the contents of the document.
Notice to the defendant and defence
The claim form can be served within the jurisdiction by various methods including post and personal service.
Once the defendant has been served with the particulars of claim, it has 14 days to file an acknowledgement of service form (if it has not done so already) or a defence. If the defendant files an acknowledgment of service form, it has 28 days from the date of service of the particulars of claim to file a defence. If the defendant does not file an acknowledgment of service form, it must serve a defence within 14 days of receipt of the particulars of claim.
In the Commercial Court, the defendant must file an acknowledgment of service form 14 days after service of the claim form and a defence within 28 days after service of the particulars of claim.
The claimant can serve a reply in response to the defence within 28 days of receipt of a directions questionnaire from the court or 21 days after service of the defence in the Commercial Court.
If the defence contains a counterclaim, the claimant must serve a defence to counterclaim, which is often served with a reply, within 14 days of service of the defence and counterclaim (including in the Commercial Court).
The following subsequent stages of the litigation will be determined at a hearing known as a case management conference:
Disclosure of documents.
Exchange of witness statements.
Exchange of experts’ reports.
A meeting of the experts and preparation of a joint report of the experts.
A pre-trial review.
10. What actions can a party bring for a case to be dismissed before a full trial? On what grounds must such a claim be brought? What is the applicable procedure?
There are three types of applications that can be made to dismiss a case before trial, namely summary judgment, default judgment and strike-out.
Summary judgment (CPR Part 24)
The court can give summary judgment against a claimant or a defendant on the whole or part of a claim, if it considers that both:
The party has no real prospect of successfully bringing/defending the claim or issue.
There is no other compelling reason why the case or issue should be disposed of at a trial.
If the application for summary judgment is successful, the claim or part of the claim will be disposed of without the need for a trial.
To apply for summary judgment, the applicant must issue an application notice supported by witness evidence verified by a statement of truth. A hearing will be fixed at which the application will be considered by a judge and the respondent can adduce evidence in response to the application.
Default judgment (CPR Part 12)
A claimant can apply for default judgment when a defendant has not filed an acknowledgment of service or a defence within the time limits set out in CPR Parts 10 and 15. However, a default judgment cannot be obtained in the following circumstances (CPR Rule 12.2):
On a claim for delivery of goods subject to an agreement regulated by the Consumer Credit Act 1974.
Where the claim is brought under CPR Part 8 (alternative procedure for claims).
Where a practice direction provides that the claimant cannot obtain default judgment.
The procedure for obtaining default judgment can be found under CPR Rule 12.4. In certain types of cases (such as a claim for a specified amount of money or an amount of money to be decided by the court), a claimant can obtain a default judgment by filing a request in the correct form. In other cases, permission of the court is required or judgment in default is not available at all (CPR Rules 12.2 and 12.4(2)).
Strike-out (CPR Rule 3.4)
A court can strike out the whole or part of a statement of case if one of the following applies (CPR Rule 3.4):
The statement of case gives no reasonable grounds for bringing or defending a claim.
The statement of case is an abuse of the court’s process or otherwise likely to obstruct the just disposal of the proceedings.
One of the parties has failed to comply with a rule, practice direction or court order.
The applicable procedure is to issue an application notice under CPR Part 23, which will usually be supported by a witness statement.
11. Can a defendant apply for an order for the claimant to provide security for its costs? If yes, on what grounds?
On application by a defendant, the court can make an order for security for costs if it is satisfied (with regard to all the circumstances of the case) that it is just to make such an order and providing that one or more of the following conditions apply:
The claimant is resident out of the jurisdiction (but not resident in a state bound by the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters 1968, a state bound by the EFTA Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters 1988, a state bound by the HCCH Convention on Choice of Court Agreements 2005 or a Regulation state (under either the Recast Brussels Regulation or the Brussels Regulation, see Question 29)).
The claimant is a company or other body and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so.
The claimant has changed his or her address since the claim was commenced with a view to evading the consequences of the litigation.
The claimant failed to give his or her address in the claim form, or gave an incorrect address in that form.
The claimant is acting as a nominal claimant (other than as a representative claimant under CPR Part 19) and there is reason to believe that he or she will be unable to pay the defendant’s costs if ordered to do so.
The claimant has taken steps in relation to his or her assets that would make it difficult to enforce an order for costs against him or her.
12. What are the rules concerning interim injunctions granted before a full trial?
Availability and grounds
An interim injunction can be made at any time during the proceedings and even before proceedings are commenced. In determining whether to grant an interim injunction, the court will apply the following two-stage test (known as the ”American Cyanamid test”):
The court must consider whether there is a serious question to be tried. In practice, this requires a case that would survive the test for summary judgment under CPR Part 24 (see Summary judgment (CPR Part 24)).
The court must consider the balance of convenience, which is done in the following three stages:
will damages be an adequate remedy for the applicant if he or she succeeds at trial? If so, then an interim injunction will not normally be granted;
if damages would not be an adequate remedy for the claimant, will a cross-undertaking in damages given by the applicant provide adequate protection for the respondent if the court were to grant interim injunctive relief which, following trial, proves to have been wrongly granted? If not, that points against the grant of interim relief; and
if there is doubt as to the adequacy of damages in applying the above tests, the court will consider the balance of convenience more generally. It will consider the particular factual circumstances in which the injunction is sought. These are sometimes referred to in case law as “special factors”. Where these factors remain evenly balanced, it is prudent to preserve the status quo.
An injunction can be requested without notice and granted by the court if there are good reasons for not giving notice (such as if the application is for a freezing or search order). The reason why notice has not been given must be stated within the evidence in support of the application.
If injunctions are urgent they can be made without notice and on the same day. Sometimes urgent applications for injunctions are made by telephone.
Mandatory injunctions (which require a person to do a positive act) are available, but it is likely to be more difficult to satisfy the American Cyanamid test than where a prohibitory injunction is sought.
Right to vary or discharge order and appeals
A respondent has a right of appeal against an interim injunction. If the injunction was made without notice to the respondent, the court will fix an on notice hearing date (a return date) at which the respondent can apply to vary or discharge the order.
13. What are the rules relating to interim attachment orders to preserve assets pending judgment or a final order (or equivalent)?
Availability and grounds
Orders to preserve assets pending judgment or final order are known as freezing orders. Applications can be made at any stage of proceedings, following the process under CPR Part 25.
The primary purpose of a freezing order is to preserve a defendant’s assets pending judgment. The court will only exercise this power where it considers it just and convenient to do so. An application will be refused if the injustice that would be caused to the respondent outweighs the benefit that would be gained by the applicant.
There are six key requirements for a freezing order:
The applicant must have a cause of action, that is, an underlying legal or equitable right.
The English court must have jurisdiction.
The applicant must have a good arguable case.
There must be assets in existence.
There must be a risk of dissipation of those assets.
The applicant must provide an undertaking in damages.
Where an applicant seeks a proprietary injunction (that is, an injunction in relation to the subject matter of a claim where the applicant has a proprietary or tracing claim), the court will not require him or her to establish a risk of dissipation. Instead, the court will apply the American Cyanamid principles (see Question 12).
An application for a freezing order is usually made without notice to avoid the risk of the respondent taking steps to dissipate its assets prior to the order being made. An order can be made on the same day in urgent cases.
A freezing order can be granted in support of proceedings in a foreign jurisdiction if it is to protect assets in the English jurisdiction.
Preferential right or lien
Other than in the case of a proprietary freezing order, the order does not give the claimant any preferential right or lien over the seized assets.
Damages as a result
The claimant usually must provide an undertaking in damages to the respondent (in case the order was later found to have been incorrectly made and the respondent has suffered loss and damage as a result).
If the court has doubt as to the applicant’s ability to comply with the undertaking in damages, the court can require the applicant to provide security to support the undertaking or an undertaking from a financially secure person.
14. Are any other interim remedies commonly available and obtained?
A list of the other interim remedies that are available is set out at CPR Rule 25.1 and includes orders for the delivery up of goods, disclosure of documents and search orders.
15. What remedies are available at the full trial stage? Are damages just compensatory or can they also be punitive?
The remedies available to a successful party following judgment will depend on the particular claim that is before the court. In general, however, the types of remedies available include:
Damages. To compensate the claimant for losses suffered, including financial and non-financial losses.
Restitution. To require the defendant to restore to the claimant the benefit or enrichment that was obtained at the claimant’s expense.
Declarations. To confirm the legal rights of the parties, the existence of facts or principles of law.
Injunctions. To require a party to do or refrain from doing something.
Orders for specific performance. To compel a party to perform its contractual obligations.
Order for rectification. To correct a document to reflect the parties’ intentions. This will usually be to correct a mistake made in a contract.
Order for rescission. To set aside a contract that has been concluded as a result of misrepresentation, mistake, duress or undue influence.
Damages awarded by English courts are generally compensatory and reflect the losses suffered by the claimant. Punitive damages, which aim to punish the defendant, are not available for breach of contract but may be awarded in very limited circumstances, such as:
Where the defendant is guilty of oppressive or unconstitutional action or has calculated that the money to be made from his or her wrong will probably exceed the damages payable.
In cases involving deliberate torts, such as deceit or defamation.
16. What documents must the parties disclose to the other parties and/or the court? Are there any detailed rules governing this procedure?
The rules governing disclosure are set out in CPR Part 31 and in the associated Practice Directions.
The parties’ disclosure obligations should be considered at an early stage. Parties to most large commercial disputes must file disclosure reports and seek to agree a proposal for disclosure within set time frames before the first case management conference. The court will determine the appropriate order to make from a ”menu” of disclosure options, bearing in mind the overriding objective and the need to limit disclosure to that necessary to dispose of the case justly.
In large commercial cases a common order is for standard disclosure, which requires that each party disclose the documents:
On which it relies.
That adversely affect its own or another party’s case.
That support another party’s case.
That it must disclose under an applicable rule.
Parties must undertake a reasonable search for documents (including electronic documents) which are, or have been, in their control. The definition of documents is very wide and includes anything in which information of any description is recorded. Additional provisions dealing with electronic disclosure are contained in Practice Direction 31B. A party’s disclosable documents must usually be set out in a list of documents, which is accompanied by a disclosure statement detailing the scope of the search carried out and certifying that the maker of the statement understands, and has carried out, the duty to disclose documents.
The timetable for disclosure, and other directions, will usually be determined at the case management conference.
The duty to disclose is an ongoing obligation until the proceedings are concluded. Failure to comply with disclosure obligations can result in court sanctions. A person who makes a false disclosure statement without an honest belief in its truth risks facing proceedings for contempt of court.
17. Are any documents privileged? If privilege is not recognised, are there any other rules allowing a party not to disclose a document?
The main types of privilege in English litigation are:
Legal advice privilege. This protects confidential communications between a client and his or her lawyer (including in-house lawyers where they are providing legal (as opposed to business or administrative) advice and duly accredited foreign lawyers) made for the purposes of seeking and receiving legal advice.
Litigation privilege. This arises once litigation or other adversarial proceedings are reasonably in contemplation or have commenced. It covers confidential communications between a client, lawyer (including in-house lawyers where they are providing legal (as opposed to business or administrative) advice and duly accredited foreign lawyers) and a third party, the dominant purpose of which is the dispute.
Common interest privilege. Where two parties have a sufficient common interest, they can share communications and not lose privilege (for example, co-defendants, parent companies and subsidiaries or insurer and insured).
Without prejudice privilege. This will generally prevent communications made in a genuine attempt to settle an existing dispute from being put before the court as evidence of admissions against the interest of the party making them.
Privilege against self-incrimination. This exempts a person from being compelled to produce documents or provide information that might incriminate him or her in criminal proceedings or expose him or her to a penalty.
If a document is privileged, a party can withhold it from inspection. Privilege may be waived by one of the following:
Placing privileged material before the court.
Loss of confidentiality in the material (as confidentiality is an essential element of privilege).
Express or implied waiver (which must be made by or on the authority of the holder of the privilege).
Other non-disclosure situations
Disclosable documents must be disclosed whether or not they are confidential or commercially sensitive. However, a party required to disclose commercially sensitive material could seek an order from the court limiting access to it (for example, so that it can only be disclosed to lawyers). Other safeguards that the court can put in place in special circumstances include conducting private hearings, restricting the use of disclosed documents or sealing the court file.
Examination of witnesses
18. Do witnesses of fact give oral evidence or do they just submit written evidence? Is there a right to cross-examine witnesses of fact?
The parties must exchange witness statements following disclosure, in accordance with CPR Part 32 and the corresponding Practice Direction. A witness statement sets out the witness’s evidence on issues of fact, which must be verified by a statement of truth. Witness statements must be exchanged between the parties well in advance of trial. If a witness statement has not been served, the court must grant permission before the witness can be called to give oral evidence.
Witnesses who provide statements must generally appear at court to give oral evidence at trial. The witness can amplify their statement or give evidence on new matters that have since arisen, if permitted by the court, but usually the contents of the statement will be taken to be the evidence of the witness as if they had given it orally in court.
Right to cross-examine
After examination in chief by the lawyer who called the witness, which is likely to be short, a witness can be cross-examined on behalf of any other party. If a witness who has provided a witness statement is not called, the other side can request permission to cross-examine them. If there are no questions in cross-examination, the account of the witness is generally taken as unchallenged. Typically, however, the witness should expect questions to test their evidence.
Following cross-examination, the party that called the witness can ask further questions by way of re-examination, but must limit questions to clarifying matters covered during cross-examination. The judge can ask questions at any stage but will not usually play a major role in the questioning of the witness.
In interim hearings, witness evidence is generally provided by way of a witness statement, although the other parties can apply to the court for permission to cross-examine witnesses.
It is rare for witnesses to be cross-examined before trial.
Third party experts
19. What are the rules in relation to third party experts?
A party seeking to rely on expert evidence must obtain the court’s permission, usually at the case management conference. The party must provide an estimate of the costs of the proposed expert evidence. The court will restrict expert evidence to what is reasonably required to resolve the proceedings. No expert report can be served without the court’s permission. A single joint expert can be appointed rather than party-appointed experts, but this is not common in large commercial cases.
Role of experts
The role of the expert is to provide independent evidence to the court in relation to their area of expertise. The expert’s duty is to the court and overrides any obligation to the person who instructs or pays them. The expert must consider all material facts and provide objective, unbiased evidence. The expert must make it clear when:
A question falls outside their expertise.
They are unable to reach a definite opinion.
Their view changes.
Expert evidence is given in a written report verified by a statement of truth, unless the court directs otherwise. The report must state:
The substance of all material instructions that the expert has received, whether written or oral, on the basis of which the report was written.
That the expert understands and has complied with their duty to the court and is aware of the requirements of CPR Part 35, Practice Direction 35 and the Civil Justice Council’s Guidance for the Instruction of Experts in Civil Claims 2014.
The court can order that some or all of the experts from similar disciplines give their evidence at the same time (known as ”hot-tubbing”). The judge can question an expert and then ask the other expert to comment on his or her answer or ask his or her own question of the first expert.
Right of reply
Expert reports are usually exchanged simultaneously, unless the court considers sequential exchange to be more appropriate. Within 28 days of service of the expert’s report, the other side can submit written questions to the expert for the purpose of clarifying the report. Answers to the questions are treated as part of the expert’s evidence.
It is common for the directions given by the court to include a meeting of the experts to attempt to narrow the issues of expert evidence and subsequently prepare a joint statement setting out the issues on which they agree and disagree along with reasons for the disagreement.a630735
The expert’s fees are paid by the party that appoints them and must not be dependent on the outcome of the case. A successful party is likely to be able to recover the expert’s fees as part of the overall costs recovery.
20. What are the rules concerning appeals of first instance judgments in large commercial disputes?
CPR Part 52 and the associated Practice Directions set out the procedure for appeals, including to the Court of Appeal. Any appeal must be made to the next relevant level of the judicial or court hierarchy.
An appeal of a decision of a High Court judge can be made to the Court of Appeal if permission to appeal is granted by either the High Court itself or the Court of Appeal. Permission to appeal will only be granted if either:
The appeal has a real prospect of success.
There is some other compelling reason why the appeal must be heard, for example if the case raises issues of general public importance.
A decision of the Court of Appeal can (with permission) be appealed to the Supreme Court but only where the appeal raises an arguable point of law of general importance, which ought to be considered by the Supreme Court.
Grounds for appeal
Grounds of appeal may include the following:
The court has made an error:
of fact; or
in the exercise of its discretion.
The judgment is unjust because of a serious procedural or other irregularity (such as a failure to provide adequate reasons).
Permission to appeal is less likely to be granted in appeals involving only errors of fact.
An application for permission to appeal can be made:
To the lower court, at the hearing at which the decision to be appealed was made.
To the appellate court, if the application to the lower court for permission was refused or no application was made to it.
Unless the court orders otherwise, the appellant’s notice must generally be filed within 21 days of the original decision and served on the respondent(s) within seven days after it is filed. Any respondent’s notice must be filed within specified time frames.
21. Are there any mechanisms available for collective redress or class actions?
The main mechanisms for collective redress in England and Wales are:
Group litigation orders (GLOs). The court can make these where a number of claims ”give rise to common or related issues of fact or law” (GLO issues). Persons wishing to join the claim must apply to be entered on the group register (opt-in). The court has broad powers, and can, for example, order that one or more of the claims proceed as test claims. Judgments on a GLO issue will bind all claimants on the group register.
Representative actions. This is where a representative(s) brings or defends a claim on behalf of themselves and other persons (who are not joined as parties), who have the same interest in a claim. Judgments will be binding on all those represented, but can only be enforced by or against a person who is not a party with the court’s permission.
Collective claims in the Competition Appeal Tribunal (CAT). These can be brought on behalf of a class seeking redress for breaches of competition law, where the claims raise the same, similar or related issues of fact or law. Claims can proceed on an opt-in or opt-out basis, subject to approval by the CAT. Under the opt-out regime, relevant UK domiciled claimants will be included in the class, unless they specifically opt-out. This regime (in particular the opt-out mechanism introduced by the Consumer Rights Act 2015) represents a substantial development in the English class actions landscape.
Class actions can be funded by the class itself, or by third parties such as litigation funders. Parties’ legal representatives can act under a conditional fee agreement or a damages based agreement (DBA) (see Question 5). However, DBAs relating to opt-out proceedings in the CAT will be unenforceable.
22. Does the unsuccessful party have to pay the successful party’s costs and how does the court usually calculate any costs award? What factors does the court consider when awarding costs?
The usual position in large commercial claims is that the unsuccessful party in litigation will be ordered to pay the legal costs of the successful party. However, any award that is made is always at the court’s discretion. In exercising this discretion, the court will have regard to:
The conduct of the parties.
Whether a party was only partly successful.
Any admissible offer to settle, which is drawn to the court’s attention and is not an offer to which costs consequences under CPR Part 36 apply.
CPR Part 36 enables a claimant or a defendant to make an offer which may give rise to significant costs implications. For example, if a claimant fails to obtain a better result than an offer to settle made by the defendant, the defendant will be entitled to his or her costs of the proceedings from the date on which the period for acceptance of the offer expired. There are strict requirements in CPR Part 36 regarding such offers.
The court has the power to manage the costs of the parties in all claims worth less than GB£10 million. The court manages both the steps to be taken and the costs incurred by the parties to achieve the objective of dealing with cases justly and at proportionate cost. A key component of these management powers requires the parties to file and exchange costs budgets before the case management conference.
Parties can recover solicitors’ fees and disbursements (such as barrister’s fees and court fees). Costs are most commonly assessed on the standard basis (that is, only costs that are proportionate, reasonably incurred and reasonable in amount will be awarded).
In exceptional cases, such as where a party has acted unreasonably, the court can award costs on an indemnity basis. In these cases, while there is still a requirement for costs to have been incurred reasonably and to be reasonable in amount, proportionality is not a consideration. The amount of costs payable is usually determined by way of the following two methods:
Summary assessment, where the judge carries out an assessment at the end of the hearing of the amount of costs payable.
Detailed assessment, which is effectively a new set of proceedings whereby the successful party’s costs are assessed by a costs judge.
As a general rule, a successful party expects (subject to any issues concerning proportionality) to recover between 60% and 80% of the total amount of costs it has incurred. The actual percentage will depend on the extent to which the court finds that the costs were reasonably incurred.
23. Is interest awarded on costs? If yes, how is it calculated?
The rate of interest on costs in the High Court is governed by the Judgment Debts (Rate of Interest) Order 1993 (SI 1993/564). The current rate, which applies from the date of the order for costs, is 8%. This rate is not open to variation by the courts. In addition, the court can order that interest be paid in respect of the period prior to the order for costs. In such cases the rate of interest will also be at the discretion of the court, but is typically around 1% to 2% above the base rate of the Bank of England.
Enforcement of a local judgment
24. What are the procedures to enforce a local judgment in the local courts?
Once a judgment has been obtained for the payment of a sum of money, the judgment creditor can enforce the judgment in the following ways:
Taking control of goods using writs and warrants of control. This is appropriate where the debtor has assets that can be easily obtained and sold. It requires the issue of a court document, which commands an enforcement officer to take control of and sell the judgment debtor’s goods.
A third party debt order. The court can order a third party who owes money to the debtor to pay the judgment creditor instead.
A charging order. This secures a judgment debt by imposing a charge over the judgment debtor’s beneficial interest in land. This usually prevents the judgment debtor from selling the land without satisfying the judgment creditor. A charging order is most effective when there is substantial equity in a property and the judgment debtor is the sole owner.
Attachment of earnings. The court can order that a proportion of the income of the judgment debtor be deducted by the employer and paid to the judgment creditor until the judgment debt is satisfied.
There are also insolvency procedures available to a judgment creditor, who can apply to make the individual judgment debtor bankrupt, or in the case of a company, file a petition to wind up the company. After a bankruptcy or winding-up order is made, the assets of the judgment debtor are collected by a trustee in bankruptcy or liquidator and then distributed among all the creditors in accordance with the insolvency rules.
25. Do local courts respect the choice of governing law in a contract? If yes, are there any areas of law in your jurisdiction that apply to the contract despite the choice of law?
Local courts will respect the choice of governing law in a contract. However, there are certain situations where the choice of law can be displaced or modified under the Rome Convention on the law applicable to contractual obligations (1980/934/EEC) (which relates to contracts pre-dating 17 December 2009) and its replacement Regulation (EC) 593/2008 on the law applicable to contractual obligations (Rome I). Under Rome I, the choice of law can be displaced or modified in the following circumstances:
Where all other elements relevant to the situation at the time of the parties’ choice are located in a country other than the country whose law has been chosen, the parties’ choice will not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement (Article 3(3)).
Where the choice of law overrides mandatory provisions of the law of the forum (Article 9(2)).
Where the overriding mandatory provisions of the law of the place of performance renders performance unlawful (Article 9(3)).
In relation to manner of performance, there will be regard to the law of the country where performance is to take place (Article 12(2)).
Where the public policy of the forum is manifestly incompatible with the application of the applicable law (Article 21).
26. Do local courts respect the choice of jurisdiction in a contract? Do local courts claim jurisdiction over a dispute in some circumstances, despite the choice of jurisdiction?
There are two main sets of rules that determine whether the English courts have jurisdiction over a commercial dispute:
Common law rules.
European regime (which in its current form is known as Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast Brussels Regulation)).
If the parties have agreed to confer jurisdiction on the English courts, the European regime will apply, regardless of the parties’ domicile (that is, even if none of the parties are domiciled in an EU member state). The common law rules will only apply if the European regime does not apply.
The English courts generally respect the choice of jurisdiction specified in a contract. This is particularly so where the parties have expressly agreed that the courts of a particular country will have exclusive jurisdiction.
There are certain circumstances when an English court can claim jurisdiction, even though the parties have agreed that claims should be heard in a foreign jurisdiction. These include:
Where the jurisdiction clause is non-exclusive.
Where there are related contracts which provide for differing courts or forums to have jurisdiction, it may be more convenient to have the litigation in a different forum from that provided in some of the contracts. In this regard, the court is likely to take into account the commercial centre of the transaction.
Where rules of jurisdiction provide that certain disputes must be decided by certain courts, by way of example under the Recast Brussels Regulation:
proceedings relating to immovable property, which must be heard where the property is situated; and
disputes relating to the validity of the decisions of a company, which must be heard where the company has its seat.
Where it is not clear as to the terms on which the parties have contracted.
27. If a foreign party obtains permission from its local courts to serve proceedings on a party in your jurisdiction, what is the procedure to effect service in your jurisdiction? Is your jurisdiction party to any international agreements affecting this process?
Where the documents to be served are from courts of an EU member state, Regulation (EC) 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters applies (and will prevail over any other bilateral or multilateral agreements concluded by member states). To effect service, the applicant must lodge the documents with the transmitting agency of their country of origin, which will then send the documents to the receiving agency in the UK (that is, the foreign process section of the Royal Courts of Justice) together with a request for service form. The documentation required will depend on the country of origin but is likely to include the documents to be served and the English translations.
Where the documents to be served are from the courts of a country other than an EU member state, service will be effected according to CPR Rules 6.48 to 6.52. This is regardless of whether the HCCH Convention on Choice of Court Agreements 2005 or other bilateral service conventions apply. The Senior Master of the Royal Courts of Justice will arrange service of the documents on receipt of the following:
A written request for service from the relevant authority of the originating country.
A translation of the request into English.
Copies of the documents to be served.
Copies of a translation of the documents into English (unless the person being served understands the language of the documents).
In either case, the English court will send the documents to be served to the bailiff of the county court in the locality of the address for service of the defendant. The bailiff will serve the documents on the defendant and provide proof of service.
28. What is the procedure to take evidence from a witness in your jurisdiction for use in proceedings in another jurisdiction? Is your jurisdiction party to an international convention on this issue?
To take evidence from a witness resident in England and Wales who is unwilling to give evidence voluntarily, the foreign court must send a letter of request to the English court.
Letters of request between courts within the EU (other than Denmark) are governed by Regulation (EC) 1206/2001 on co-operation between the courts of the member states in the taking of evidence in civil or commercial matters. The letter of request must follow the prescribed pro-forma and contain, among other things:
A description of the case.
The questions to be put to the witness or a statement of the facts about which the witness is to be questioned.
Where applicable, a notice of any right the witness may have to refuse to give evidence under the law of the requesting court.
Any documents or objects to be inspected.
For non-EU countries, Scotland and Northern Ireland, the Evidence (Proceedings in Other Jurisdictions) Act 1975 applies, together with CPR Rules 34.16 to 34.21. In summary, an application is made to the Senior Master of the Queen’s Bench Division of the High Court to give effect to the request. The application must be:
Supported by evidence.
Accompanied by an original copy.
Signed by the judge who issued the letter of request.
The application is generally made without notice and an order is usually made by the Senior Master without the need for a hearing.
The UK is also a signatory to the HCCH Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970, which applies in cases where the country of the requesting court is also a signatory to the convention.
Enforcement of a foreign judgment
29. What are the procedures to enforce a foreign judgment in the local courts?
There are various different regimes regarding the enforcement of foreign judgments in the English courts.
The European regime
The following conventions apply:
Regulation (EU) 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Recast Brussels Regulation), which applies to all EU states other than Denmark in respect of proceedings commenced on or after 10 January 2015.
Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, which applies to Denmark and to proceedings commenced before 10 January 2015.
Brussels Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 1968, which applies to judgments from various dependent territories of EU member states (including Gibraltar).
Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters 2007, which applies to the European Free Trade Association states (namely Iceland, Norway and Switzerland, but not Liechtenstein).
The precise requirements vary, but by way of example, the procedure for enforcement under the Recast Brussels Regulation requires a certificate from the court of origin, which must be served together with the judgment on the judgment debtor. The creditor can then enforce the judgment as if it were an English judgment.
In addition, an uncontested judgment from a court of an EU member state can also be enforced in the English courts under Regulation (EC) 805/2004 creating a European Enforcement Order for uncontested claims, which provides a simpler method of enforcement to the Recast Brussels Regulation in that it is not necessary to serve the judgment and certificate on the debtor. In addition, the defences that can be used to contest enforcement are more limited.
Commonwealth countries (and Israel)
The Administration of Justice Act 1920 covers various countries including Singapore, Nigeria, Kenya, the Cayman Islands, the British Virgin Islands, Malaysia and New Zealand.
The Foreign Judgments (Reciprocal Enforcement) Act 1933 covers other Commonwealth countries including Australia, Canada, India, Pakistan, Guernsey, Jersey and the Isle of Man. The former statute also covers some other states, most notably Israel, and judgments from some European jurisdictions where the subject matter is outside the scope of the normal EU regime.
HCCH Convention on Choice of Court Agreements 2005
This applies to Mexico and the members of the EU, although judgments from the courts of members of the EU will be dealt with under the Recast Brussels Convention. The US and Singapore have signed the Convention indicating their intention to become parties, but they have yet to become bound by the Convention.
The intra-UK regime
The procedure for enforcing Scottish and Northern Irish judgments in the courts of England and Wales is set out in the Civil Jurisdiction and Judgments Act 1982. An application is made to the High Court, which must be supported by a certificate issued by the original court. The application is made without notice to the debtor.
The common law regime
This applies to all other countries including most notably the US. Under this regime, judgments must be enforced by bringing fresh proceedings in the courts of England and Wales, whereby the foreign judgment is sued upon as a debt. The judgment creditor can obtain summary judgment if there is no defence to the claim. For a foreign judgment to be enforceable at common law it must be both:
Final and conclusive in the court that pronounced it.
For a sum of money, but not for taxes, a fine or other penalty (which usually means fines and penalties payable to a state).
A foreign judgment will only be enforceable under the common law regime if the foreign court had jurisdiction, according to the rules which English law applies in such cases. In addition, various defences are available to a debtor (such as where the foreign court’s procedures breached the rules of natural justice and the judgment was obtained by fraud, enforcement would be contrary to public policy or the European Convention on Human Rights, or the judgment is inconsistent with a prior judgment on the same subject matter between the same parties).
Other regimes may apply in specialist areas such as insolvency or international transport.
Alternative dispute resolution
30. What are the main alternative dispute resolution (ADR) methods used in your jurisdiction to settle large commercial disputes? Is ADR used more in certain industries? What proportion of large commercial disputes is settled through ADR?
The main ADR procedures used to settle large commercial disputes in England and Wales are as follows:
Mediation. This is a confidential process whereby parties, with the assistance of a neutral third party (mediator), identify the issues in dispute, explore the options for resolution and attempt to reach a consensual agreement. Typically, mediation in England and Wales is facilitative in that, unlike a judge or arbitrator, the mediator will not decide the case on its merits but will work to facilitate an agreement between the parties. Occasionally, mediators can be asked to evaluate the claim or issue or identify the strengths and weaknesses of a particular case. This is known as evaluative mediation.
Executive tribunal or mini-trial. This is a confidential process whereby a representative of each party makes a formal presentation of their best case to a panel comprised of senior executives for the disputing parties and an independent chairperson. The panel then retires to discuss the dispute and the chairperson normally acts as a mediator between the senior executives, but does not make a binding determination unless the parties agree to this.
Expert determination. This is an informal process that produces a binding decision. It is usually used to determine issues of a technical nature and will usually arise where there is a clause that provides for expert determination in the underlying contract.
Adjudication. This is a process that is very common in the construction industry. It can arise by virtue of a statutory right or where the parties agree to adjudication either in the underlying agreement or subsequently. The decision of the adjudicator has interim binding effect (that is, the decision is binding, pending agreement of the parties altering its effect or a reference of a dispute to arbitration or litigation for final determination).
Commercial arbitration. This is a very common form of dispute resolution but it normally only arises where the underlying contract provides that disputes be subject to arbitration. It is therefore more of an alternative to litigation rather than a form of ADR.
Med-arb. This is a hybrid process whereby mediation is combined with arbitration to resolve a dispute so that if mediation fails in whole or on any issue, the parties agree that the mediator becomes an arbitrator and issues a final and binding award on the outstanding matters.
Mediation is by far the most common form of ADR in England and Wales. It also has a good success rate in resolving dispute. For example, a survey carried out by a leading mediation organisation has shown that 86% of cases referred to mediation settle at or shortly after the mediation.
31. Does ADR form part of court procedures or does it only apply if the parties agree? Can courts compel the use of ADR?
ADR is not a formal stage in the court procedure and it is very rare for the courts to compel the parties to take part in ADR. Therefore, it is predominantly a consensual process. However, the Civil Procedural Rules require the parties to actively consider ADR as a method of resolving the dispute and the attitude of the courts is very much to actively encourage the parties to use ADR to try to reach a settlement.
If a party refuses to take part in ADR without good reason, they run a serious risk of being penalised in terms of costs, even if they are entirely successful in the proceedings.
32. How is evidence given in ADR? Can documents produced or admissions made during (or for the purposes of) the ADR later be protected from disclosure by privilege? Is ADR confidential?
In mediation, both parties will typically submit and rely on a mediation statement setting out their position, which is supported by the documents on which they wish to rely.
In other forms of ADR (such as expert determination or adjudication), the way in which evidence will be given is likely to be set out in the underlying contract or agreed between the parties at the outset.
The documents disclosed and the discussions that take place at mediation or early neutral evaluation are almost invariably confidential and privileged so they cannot be relied on in subsequent proceedings. This is not necessarily the case for expert determination or adjudication, but will depend on the provisions of the underlying agreement.
33. How are costs dealt with in ADR?
In the case of mediation, the parties usually agree to bear their own legal costs and share the other costs (such as the mediator’s fees, venue hire and so on). The position in relation to expert determination and adjudication will depend on the terms of the underlying contract.
34. What are the main bodies that offer ADR services in your jurisdiction?
The main bodies in England and Wales that offer ADR services are:
Various barristers’ chambers, which have highly experienced mediators as members.
Proposals for reform
35. Are there any proposals for dispute resolution reform? If yes, when are they likely to come into force?
Following the Jackson Reforms, which came into force in 2013, there are currently few significant proposals for reform which are likely to affect large commercial disputes.
A review of the structure of the civil courts was carried out by Lord Justice Briggs, which considered various proposals, including the greater use of technology and a review of the routes of appeal. The main outcome of the review was the proposed introduction of a Courts Bill that is designed to reform the courts and tribunals systems, make better use of technology and modernise working practices (for example, the introduction of an Online Court). However, this is unlikely to affect large commercial disputes.
In September 2015, the Civil Justice Council published a report on reforming damages based agreements (DBAs) (seeQuestion 5), as the use of these agreements has been very limited. The report set out a number of recommendations designed to make the rules regulating DBAs simpler and clearer. The government has not prepared a response and therefore reform of the DBA regime in the near future appears unlikely.
The decision of the UK to leave the European Union, known as Brexit, is unlikely to affect the majority of the rules regarding dispute resolution in England and Wales. In particular, the reasons why parties choose the English courts, such as the quality and certainty of English law, the reputation of the English courts for consistency, transparency and expertise in dealing with large-scale commercial disputes, are unrelated to the UK’s membership of the EU. Certain areas that are covered by EU legislation (such as jurisdiction, service of proceedings and enforcement) may be subject to reform when the UK leaves the EU. However, it appears highly likely that the UK will seek to agree similar provisions to minimise the impact of Brexit on cross-border trade and the use of the English courts to resolve international disputes.