You may have heard people talking about court proceedings at some point, but you might not have a clear idea of what it involves in reality. When it comes to the commercial litigation process, it’s broadly the same whether you’re in the County Court for a smaller claim or in the High Court for larger and more complex disputes.
In this article, our business dispute solicitors have put together this guide to serve as a high-level overview of what each stage involves, so that you come away equipped with a grasp of the key components of the court process for business disputes.
Jump to:
- What happens before court proceedings begin?
- What are the first steps if pre-action discussions fail?
- What court should I issue a claim in?
- What if the defendant refers to a counterclaim?
- What happens when the court receives the claimant’s and defendant’s documents?
- What is disclosure?
- When are witness statements necessary?
- Where does expert evidence fit in?
- What happens when the case reaches trial?
- How long does the whole process usually take?
- Can I appeal a court’s decision?
- How much does it cost a company to take you to court?
- Summary
What happens before court proceedings begin?
Before prospective litigants (‘litigants’ being the term used for the parties involved in legal action) can start court proceedings, the Civil Procedure Rules (CPR) require a claimant – the person bringing a claim – to set out its case in what’s known as a letter before claim.
The defendant – the party responding to the claim – then has a reasonable period in which to respond, which is usually somewhere in the time frame of 14 to 28 days, depending on the nature of the dispute. This is part of what’s referred to as ‘the pre-action process’.
It’s important to highlight that the court expects both sides to explore if it is possible to settle the dispute out of court at the pre-action stage, with court proceedings being a last resort. The CPR sets out a comprehensive range of Pre-Action Protocols to help potential litigants– these contain valuable guidance and mandatory processes in all kinds of different types of disputes, including ones which involve businesses.
What are the first steps if pre-action discussions fail?
If the parties cannot come to an agreement commercial litigation is started through the 'issue' and 'service' of a formal Claim Form by the claimant, which is routinely accompanied by a separate written document known as the Particulars of Claim. These documents serve the purpose of summarising the claimant’s factual and legal case.
After receiving the claim documents, the defendant then has at least 28 days in which to serve their Defence – in other words, the document should set out the response to the Claim Form & Particulars of Claim. Once the claimant has received copies of the Defence, they have at least 14 days to serve a Reply, dealing with any new points that the defendant has raised in their Defence.
What court should I issue a claim in?
The main things that will determine which court you should issue a claim in is the value of the claim, the complexity of it and what type of case it is, i.e. which area of law the dispute is centred on. Some of the main courts are set out below, along with details of the kinds of disputes that they deal with – but it’s advisable to take legal advice on the most appropriate court to issue a claim in.
The County Court
County Courts are spread across the country, and they deal with most civil matters, including some business disputes – mostly debt-related matters, insolvency and the return of goods. There are a few different ‘tracks’ that claims are split into: these are the small claims track (usually for claims of less than £10,000 in value), the fast track (generally for claims worth more than £10,000 but less than £25,000), the newly-introduced intermediate track (for claims worth more than £25,000 but less than £100,000) and the multi-track (the primary track for cases valued in excess of £100,000).
The High Court
The High Court deals with more complex or higher value disputes – normally claims valued at more than £100,000 are issued in the High Court. It’s split into different ‘divisions’, some of which manage certain kinds of business disputes. These include:
- The King’s Bench Division (KBD): This division commonly handles breach of contract claims, negligence claims and breach of statutory duty disputes.
- The Commercial Court: This ‘sits’ within the KBD and manages complicated commercial disputes (both national and international) which tend to be of high financial value.
- The Chancery Division: This division is ordinarily the destination for intellectual property claims and some insolvency related matters.
What if the defendant refers to a counterclaim?
It may also be that the defendant has served a Counterclaim along with their Defence, which would be the case if the defendant believes that the claimant owes them money, either as 'cancelling out' the full amount claimed or at least part of it. In these circumstances, the claimant would also address the Counterclaim when replying to the Defence.
What happens when the court receives the claimant’s and defendant’s documents?
When the court has received the documents referred to above, it sets out the timetable (commonly referred to as ‘directions’) for the rest of the steps to trial. This timetable is designed to ensure that all the evidence is exchanged between the parties in advance of the trial date so that all parties and the judge have plenty of time to consider everything involved. It’s worth pointing out that the courts adopt a strict ‘cards on the table’ approach, with a view to there being no surprises in terms of the evidence when the case finally reaches trial: transparency is key. Depending on which court the litigation is proceeding in and the value/complexity of the claim, the level of detail contained in the directions can vary widely.
What is disclosure?
The first evidential stage is called disclosure. This involves the exchange of all relevant documents between the claimant and defendant, with there being a duty on each party to perform extensive searches and preserve any evidence that may or may not be helpful to its case. In today’s digital age, this can be a lengthy task involving the review of potentially thousands of emails and other documents.
When are witness statements necessary?
Once the parties are armed with all the relevant documentation following the completion of the disclosure exercise, each witness then provides a written witness statement. The rules state that a witness can’t give evidence at trial without first providing a written witness statement to the other side and to the court. These statements are exchanged simultaneously between the parties on a date ordered by the court, which will be well in advance of the trial.
Where does expert evidence fit in?
If a dispute involves technical issues (for example, where the valuation of a company is necessary or an evaluation of a defective building is required), the court may see fit to make provision for expert evidence in the directions. Expert reports are drawn up after the exchange of witness statements has taken place, so that the expert(s) have all the relevant factual evidence on which to provide their opinion – again, any expert reports are exchanged by the parties in advance of the trial.
What happens when the case reaches trial?
When the trial date arrives, the judge will have in front of them the relevant documentary evidence that has been provided throughout the disclosure process, along with the written witness statements and expert reports. Each witness will be cross-examined on the evidence in their witness statement by the other side’s barrister. The sequence of events is that all of the claimant’s witnesses go first, followed by those speaking on behalf of the defendant. The judge will then hear from any expert and, finally, each barrister will sum up the case of the party they’re representing. Finally, the judge will retire to consider their judgment, which may be delivered orally on the final day of the trial or in written form approximately four to six weeks later.
How long does the whole process usually take?
This is a difficult question to answer accurately because time frames are dependent upon many factors: the complexity of the case, the availability of judges, courtrooms, solicitors, barristers, the parties themselves and any witnesses and experts. Directions are also commonly delayed if either party makes an application throughout the course of the timetable (for example, to request extra time to comply with a direction), so flexibility and patience are crucial attributes to have when it comes to the litigation process. As an extremely broad ballpark estimation, taking into account the size and nature of the claim is twelve months from start to finish is a rough time frame to have in mind.
Can I appeal a court’s decision?
Court decisions can be appealed, but there are procedural steps which have to be followed and there must be legal grounds to do so. These grounds might include being able to show that the judge didn’t follow the procedure properly or another important mistake took place, so unfortunately this means that you can’t appeal if you simply think that the judge’s decision was incorrect. A solicitor will be able to help you work out whether you’ve got grounds to appeal and if it’s worth doing so because it can be an expensive and lengthy process without any guarantees of success.
If you do decide to appeal a court’s decision, it’s likely that you’ll need a judge’s permission to do so – and they’ll only give this if they believe the appeal has a strong chance of succeeding. Permission can be requested at the court hearing where the original decision was made or if not then (or if permission was refused in the hearing), you’ll need to file a document called an appellant’s notice at court quickly – usually within 21 days of the date of the original decision. This notice must also be completed if you were given permission in the hearing so that you can provide the court with all of the information in support of your appeal.
Ultimately, if you’re granted permission, the court that you’ll need to lodge your appeal with depends on the level of judge who made the original decision and the kind of order they made. A judge will then consider your application without a hearing and the court will let you know the outcome. In some circumstances, if permission is refused, you can ask for a reconsideration at an oral hearing.
How much does it cost a company to take you to court?
How much it costs a company to take you to court can vary considerably: this is because it depends on lots of different factors, but in most cases, the overall expense can be significant when it’s all added up. The initial court fees can range from £35 right up to £10,000 according to the value of the claim, then there are fees for solicitors, barristers, alternative dispute resolution attempts (for example, mediation or arbitration), expert witnesses and insurance premiums, to name but a few potential costs.
Summary
Being involved in court action can be a long-drawn-out process, whether you’re the party making a claim or if you’re defending your business against one. It can be tricky to navigate all of the procedural hoops and technicalities, and matters can quickly escalate, so it’s absolutely vital to take advice from a business disputes solicitor who’s able to guide you through each of the stages involved and help you to be prepared every step of the way, including the possibility of settlement before the case goes all the way to trial.
