The litigation process - an overview and an explanation

Advice sought

A party facing a dispute may ask lawyers for advice.  The lawyers will need to know the key details of the dispute and see the most relevant documents. For contractual claims, for example, they will need to know how and why the contract came into existence, who was involved in making it, what was said or written about it, how it operated in practice, how the contract was breached and what losses were caused by the breach.

The lawyers will also advise on the best way to resolve the dispute and the steps to be taken if it cannot be resolved.  This will include advice on the potential costs of litigation and what costs could be recovered from the losing party.

Preserve documents

As soon a party knows that it is or may become a party to court proceedings that have either started or may be started, it is under a duty to the court to take reasonable steps to preserve documents in its control that may be relevant to an issue in the proceedings.

The definition of ‘document’ here is extremely wide – it “includes any record of any description containing information”. It therefore includes every type of data, including hard copy documents, handwritten notes, text messages, instant messages, social media, recordings and photographs, even the metadata of electronic documents. All electronic data sources will need to be considered, including network servers, email servers, databases, document management systems, back-up systems, local storage on desktops or laptops, webmail accounts, cloud-based storage, mobile phones and social media accounts.

For disputes that may end up in the Business and Property Courts, a party may need to confirm that they have taken specific steps to preserve documents, such as suspending relevant document deletion or destruction processes for the duration of the proceedings, writing to instruct relevant employees (including former employees) who may have documents it does not also have to preserve them, and requiring agents or third parties holding documents on its behalf to preserve those.  

Interim injunction

It may be necessary to apply to the court for injunctive (i.e. emergency) relief before taking any other steps in the litigation. For example, there may be real concerns that if the opponent learns about the litigation it might dissipate its assets to avoid satisfying any judgment against it. In this case, it may be possible to apply for a freezing order restraining it from dealing with its assets. Alternatively, if the fear is the opponent may destroy key documents, it may be possible to apply for a search and seizure order.

Claim letter

Before issuing proceedings, the claimant should send a claim letter setting out information about the dispute and inviting the opponent to provide its response. The court will penalise in costs parties who do not engage in pre-action conduct to exchange information about the case. Some types of cases such as construction and engineering disputes have specific “pre-action protocols” setting out what information must be exchanged and by when. 

Response

The defendant should provide a full response to the claim letter so that the claimant is aware of what is in issue and what (if anything) is not, before it decides its next steps.

Reply

The claimant should reply to the response letter so that the defendant is aware of whether the claimant has changed its position at all as a result of its response letter.

Explore settlement (e.g. Meeting/Mediation)

Once the parties’ positions have been set out in correspondence, there may be scope for settlement. Settlement should also be considered throughout the dispute. Negotiations should be made “without prejudice save as to costs”, so neither party can refer the court to those negotiations until the court has made its judgment and is considering what costs order to make. The court may order costs penalties against a party who takes an unreasonable position on settlement.

Parties could agree to have a mediation, a confidential process where an independent third party liaises between the parties to see if the dispute can be settled. If a party unreasonably refuses to mediate then the court may penalise it in terms of costs.

Both claimants and defendants can make a settlement offer under Part 36 of the Civil Procedure Rules, before as well as after proceedings have been issued. The advantage of Part 36 offers are the costs consequences. If a claimant’s offer is rejected but it gets judgment at least as advantageous as its offer, then unless the court considers it unjust, it will get interest on the damages awarded, enhanced costs recovery with interest on those costs, and an additional percentage payment of the damages awarded. If a defendant’s offer is rejected but the claimant fails to do better at trial, then unless the court considers it unjust, the claimant will be liable for the defendant’s costs from the period when it should have accepted the offer.

Issue proceedings

Proceedings are issued by the claimant sending a claim form to the court together with the court fee. The claim form contains very brief details of the nature of the claim and the remedy sought. The full details of the claim are set out in the “particulars of claim”, which can be included in the claim form, or be in a separate document which can be sent after issue of the claim form. The court will issue the claim form by dating it and adding the court seal.

Serve claim form and particulars of claim (Initial disclosure)

The court or the claimant can serve the claim form on the defendant. The defendant must be served with a “response pack” at the same time, consisting of an acknowledgement of service form, an admission form, a defence form and a “notes for the defendant” form explaining what the defendant needs to do.

The particulars of claim must also be served on the defendant – if this is not done at the same time as the claim form, it must be done within 14 days (but no later than four months from the issue of the claim form).  (Note that the rules are slightly different in the Commercial Court and the Circuit Commercial Court, where the particulars of claim only needs to be served if the defendant files an acknowledgment of service which indicates an intention to defend the claim).

If the case is proceeding in the Business and Property Courts, then the claimant must provide initial disclosure when serving the particulars of claim (unless the parties agree to dispense with it or an exception applies). A claimant’s initial disclosure is the key documents on which it relies (expressly or otherwise) in support of its claims, and the key documents that are necessary to enable the defendant to understand the claim it has to meet.

Acknowledge service

The defendant has 14 days from the date of service of the particulars of claim (calculated according to court rules) in order to file the acknowledgement of service, indicating either its intention to admit or defend the claim, or its intention to challenge the court’s jurisdiction to hear the claim. The defendant does not have to file the acknowledgement of service if it files its defence within this timeframe instead. (In the Commercial Court and the Circuit Commercial Court, the defendant must always file an acknowledgment of service, within 14 days from the date of service of the claim form).

If the defendant does not file an acknowledgement of service (or defence) in time, the claimant can apply for judgment in default. If the defendant wants that default judgment set aside, it will have to apply to the court, which will only set it aside (assuming the claim form and response pack were properly served) if the defendant has a real prospect of successfully defending the claim, or it appears to the court that there is some other good reason why the judgment should be set aside or the defendant should be allowed to defend the claim.

Stay of proceedings/challenge to jurisdiction

The defendant may apply to stay the proceedings, if for example the claimant has not complied with a pre-action protocol, or if it wishes to challenge jurisdiction on the basis that the litigation should have been brought in a different country, or been referred to arbitration.

Request for extension of time

If the defendant intends to defend the claim, it must file its defence within 14 days of serving the acknowledgment of service (or from receiving the particulars of claim in the Commercial Court and the Circuit Commercial Court).   

The parties can agree between themselves an extension of time for the defendant to file its defence for a period up to 28 days. If the defendant requires longer, it will need to make a court application.

If the defendant does not file a defence in time, the claimant can apply for judgment in default. If the defendant wants that default judgment set aside, it will have to apply to the court, which will only set it aside (assuming the claim form and response pack were properly served) if the defendant has a real prospect of successfully defending the claim, or it appears to the court that there is some other good reason why the judgment should be set aside or the defendant should be allowed to defend the claim.

Defence/Counterclaim (Initial disclosure)

The defence should set out its response to every point raised in the particulars of claim. If the defendant wishes to make its own counterclaim against the claimant then it can do so with its defence, but it must pay the court issue fee for the counterclaim.

If the case is proceeding in the Business and Property Courts, then the defendant must provide initial disclosure when serving the defence (unless the parties agree to dispense with it or an exception applies). Initial disclosure for a defendant is the key documents on which it relies (expressly or otherwise) in support of its defence, and the key documents that are necessary to enable the claimant to understand its defence.

Part 18 request

If a party feels that the particulars of claim or the defence provides insufficient information about the nature of the claim or defence, it can make a Part 18 request asking for that information. If the information is reasonably required and the opponent fails to provide it, the court can be asked to make an order requiring compliance.

Reply/Defence to counterclaim

The defence may raise issues that are not addressed in the particulars of claim and the claimant may therefore wish to address them by way of a reply. If the defendant has made a counterclaim, the claimant must file a defence to counterclaim within 14 days.

Summary judgements/strike out application

If a party considers that its opponent’s statement of case (the particulars of claim or defence) discloses no reasonable grounds for bringing or defending a claim, it can apply to the court for an order for that statement of case (or part of it) be struck out.

Alternatively, if a defendant considers that the claimant has no real prospect of succeeding on the claim or an issue, it could apply to the court for summary judgment against the claimant. Similarly, if the claimant considers that the defendant has no real prospect of successfully defending the claim or an issue, it could apply for summary judgment against the defendant. The court must also consider that there is no other compelling reason why the case or issue should be disposed of at a trial.

If any such interim court applications are made, the unsuccessful party will usually be ordered to pay the successful party’s costs of that hearing. The amount of the costs are normally assessed by the court at the hearing and are payable within 14 days.

Directions questionnaire, costs budget and disclosure report or disclosure review document

The next stage is for the court to fix a timetable (or “directions”) for the remaining steps up to trial. In order to do so, the parties are required to provide various information about the case to the court.

The information is normally contained in a directions questionnaire, in which parties provide information such as how many witnesses it wants to call at trial, whether it wants to rely on expert evidence, how long it anticipates the trial will last and and what directions it thinks the court should make.  The court will also want to know whether the parties have tried or wish to try mediation. The claimant must pay a further court fee at this stage.

Parties will also normally be required to give information about what relevant documents they have in their control. This will be either in a Disclosure Report or, in the Business and Property Courts, a Disclosure Review Document. The information provided will describe where the documents are, who has them, how electronic documents are stored, and the proposals for searching and disclosing documents. If the  parties are completing the Disclosure Review Document, they will also need to try to agree a list of issues for disclosure, as the court will look to order what disclosure model should apply (and therefore the type of search that needs to be made) for each issue. 

For most cases, parties will also have to file and serve a costs budget, which will set out the actual costs incurred to date and give an estimate of their costs to trial. 

Case and costs management conference/directions

The court may decide to issue directions on paper, but for most substantial cases it will do so at a court hearing called a case management conference.

The directions given normally provide a timetable for disclosure of documents, exchange of witness statements, exchange of expert reports if required, and arrangements for the trial. The directions will include either a specific trial date or give a ‘trial window’ of a few months within which the trial must be held. 

When considering directions, the court will bear in mind the overriding objective of the CPR, which is that it must deal with cases justly and at proportionate cost. It will therefore consider the parties’ costs budgets when making the order for directions.

If costs budgets were filed, the court is likely to make a costs management order. This records the extent to which the parties agreed the budgets. To the extent they are not agreed, the court will consider the appropriate figures and put those on the order. In general terms, the budgets will act as a restriction on the amount of costs that the winning party can recover from their opponent.

Trial of a preliminary issue

If a party considers that there is a preliminary issue that would potentially be decisive of a case, it can ask the court to direct that there be a trial of that preliminary issue. Once the issue has been determined, if it is not decisive of the case, the case will then proceed to trial on the remaining issues.

Disclosure and inspection, or extended disclosure

Disclosure is where parties disclose relevant documents which are or have been in their control.

In many cases, the court will have ordered standard disclosure. In general terms this means that a party has to disclose those documents upon which it relies, which adversely affect its case, which adversely affect the other party’s case, or support the other party’s case. Parties must make a reasonable search for documents, this will depend on the number of documents involved, the nature and complexity of the proceedings, the ease and expense of retrieval of any particular document and the significance of any document likely to be located during the search.

In the Business and Property Courts, the court is likely to have ordered extended disclosure, where the type of search involved depends on which disclosure model (A, B, C, D or E) applies to which issue for disclosure.

Giving disclosure generally involves listing the documents to be disclosed and providing copies to the opponent. Each party signs a statement of truth confirming that the disclosure process has been properly carried out. 

Specified/3rd party disclosure application 

If a party feels that its opponent has not disclosed documents that it ought to have done, it can apply to the court for an order for specific disclosure.

In some cases it may be possible to obtain disclosure from a third party who is not a party to the proceedings, although this is not something that will be routinely ordered. The document sought must be likely to support or adversely affect the case of one party or another, and be necessary in order to dispose fairly of the claim or to save costs.

Witness statements exchanged

Parties exchange witness statements of the oral evidence they intend to rely on in relation to any issues of fact to be decided at trial. There may be court restrictions on the length of witness statements, or the issues which a witness can address in their statement. The witness must sign a statement of truth confirming the truth of their statement.  

In the Business and Property Courts, there are rules on how trial witness statements must be prepared, and the witness (and any lawyer involved in the preparation of the statement) must certify in the statement that those rules have been complied with.

Expert reports exchanged

Depending on the nature of the dispute, it may be necessary to provide expert evidence to the court, for example a qualified engineer might be needed to comment on the manufacture of an allegedly faulty engine component. An expert witness is anyone with knowledge or experience of a particular field or discipline beyond that to be expected of a lay person, so that the court may rely on that witness’s opinion in that field of expertise.

A party must have the court’s permission to put in expert evidence, and this will usually be in the order for directions. The order will specify the field of expertise allowed and may specify the issues to be addressed by the expert. The court may require parties to jointly instruct a single expert, but if parties are allowed to have their own experts, the order will specify a date by which their reports must be exchanged.

Experts meet/produce joint report

If the parties do have their own experts, they will normally be required to meet in order to narrow down any issues and produce a joint report detailing areas of agreement and disagreement.

Pre-trial review

Parties file a listing questionnaire (together with a further court fee from the claimant) confirming either that the case is ready for trial, or stating what steps are still outstanding and why. In substantial cases the court may order a court hearing called a pre-trial review to decide the trial arrangements.

Trial preparation

The claimant prepares the trial bundles, which will include the statements of case, the disclosure documents the parties want the judge to see, the witness statements and any expert evidence.

Parties normally instruct a barrister to be their advocate at trial. The barrister will liaise with the solicitors to prepare for the trial. In some cases it may be sensible to have a pre-trial conference with the barrister, solicitors and the client. 

Witnesses and any experts required to attend the trial will be given information about when and where they need to be. Witnesses unfamiliar with litigation should have the trial process explained to them.

Trial

At the trial, the claimant’s advocate will make opening submissions to the judge, explaining what the case is about and what the issues are that need to be determined. The defendant’s advocate may also make opening submissions.

The claimant’s witnesses will then be cross-examined by the defendant’s advocate on their statements. The claimant’s advocate can re-examine those witnesses to ask them questions on matters that arose during cross-examination. Then it will be the turn of the defendant’s witnesses. If the court rises while a witness is still giving evidence, such as for lunch or overnight, then that witness cannot discuss the case with anyone until they have finished giving evidence.

Any expert required to attend trial will be cross-examined on their report.

The advocates will then give closing submissions, putting to the judge how the evidence has supported their client’s case.

Judgements + costs award (Application for permission to appeal)

The judge may give judgment immediately after closing submissions, but in most substantial cases the judgment will be reserved and given at a later date.

Once judgment has been handed down, the judge will need to decide what order to make as to the costs of the proceedings. If the claimant has done better than a Part 36 offer it has made, or has not done better than a Part 36 offer made by the defendant, then the costs consequences set out in Part 36 will apply instead. Otherwise the starting point is that the unsuccessful party will be liable for all the successful party’s costs, to be assessed on the standard basis. The court may however make a different order, depending on all the circumstances of the case. For example, the successful party may have lost on some issues, or a party behaved unreasonably during the litigation such as by exaggerating a claim or refusing to attend a mediation.

If the trial only lasted one day, or the receiving party’s costs were all within its costs budget, the trial judge could also assess the amount of costs payable. Normally however the judge only decides the liability for costs. The parties then try to agree the amount payable and if that is not possible the dispute goes to a costs judge to decide.

If a party wishes to appeal any part of the judgment, including the order for costs, it will need permission to do so. It can ask the trial judge for permission to appeal, and it can file an appeal notice within 21 days of the judgment. The basic test for granting permission is whether the appeal has a real prospect of success. Appeals will only be allowed where the decision of the lower court was wrong, or unjust because of a serious procedural or other irregularity in the proceedings in the lower court.