Obtaining the right legal representation can help make enacting or responding to a commercial dispute quick and straightforward. However, with so many variables involved, they can be difficult to navigate – especially if you’ve become part of one.
What Is a Commercial Dispute?
Arising as part of a defined deal or transaction, a commercial dispute is a process that allows aggrieved parties to solve their differences. Viewed by the courts as ‘a last resort’ when communication between the parties involved has broken down, commercial disputes involve the resolution of any commercial transaction or deal. A highly formalised process, this can be between companies, individuals, or a mix of both.
While commercial disputes cover a wide field, some of the most common types of dispute include:
– Contractual disputes, including breaches and lack of delivery
– Competition disputes
– Business disputes, commonly between shareholders, directors, and other ranking individuals
– Professional insolvency
– Professional and commercial negligence
– Fraud
– Outsourcing disputes
– Construction disputes, including contractual, building, and regulatory issues
– Partnership disputes
– Reputation management, including countersuits, defamation, NDA breach
– Patent and Intellectual Property disputes
These can come from a wealth of professional sectors including finance, aviation, construction, information technology, and a range of other fields. While there are a number of variables and regulations, it is essential that you seek professional guidance before enacting a dispute or becoming the subject of one.
While the process is relatively straightforward once underway, there are many differences between the legal systems in the UK – with Scotland and Northern Ireland following different processes and offering different options.
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What Criteria Must Be Met?
Before a commercial dispute can be formalised, there must first be an established basis for a claim.
A major part of the commercial dispute process is providing evidence that you took every action possible to resolve the issue without resorting to the courts or using it as a cudgel to impel or threaten. In many English courts a ‘pre action protocol’ may be required that you need to meet in full. However, if this does not apply to your case, it does not need to be enacted.
If a case has good standing and the client has contacted the relevant professionals, they can complete a claim form and send it to a relevant court.
If the claim is weightier, the UK deploys a three-track system to resolve the issue. On meeting with a client, you will work together to tender the claim to one of the following options:
– Small Claims: Any claims that have a value below £10k and will last for less than a day.
– Fast Track: Any claims with a value between £10k – £25k and will last for a day or less.
– Multi Track: Any complex claims with a value of £25k or more and will last for more than a day.
Once tendered, the chosen court will deliver what is known as an ‘order for directions’ that will stipulate the process for carrying out how the case will be conducted. This gives guidance on what documents need to be disclosed, due process, timetable for the trial, and other variables that are specific to your case. Once complete, the case is formally listed for a judge to reach a decision over.
How Are They Enacted?
Commercial litigation follows a highly rigorous process that can be broken into three distinct steps – pre-litigation, case preparation, and enforcement.
These can be broken down as follows:
Pre-Litigation
Once the issue has reached a point where action needs to be taken, if the solicitor feels the case has weight, this is supported by an initial investigation and review along with the accumulation of supporting digital and physical evidence to support your case. While this is assembled, you advise pursuing all avenues of resolution with the other party to show that you have exhausted all reasonable options available to you.
If this is not resolved, you will help with any required pre-action tasks such as drafting letters to those you intend to pursue, or any formal responses required. Once these are delivered, you can move on to the process of completing the claim. Carrying out this process correctly is essential and failing to adhere to guidance can result in a valid claim being dismissed out of hand or delayed, producing a roadblock in the legal avenues available.
Case Preparation
Once the claim is ready to start, the solicitor works with their client to assemble the client’s form. This will capture the specifics of your case and – if required – address the defence or the potential position that the opposition could take. Once the response to your initial letter is provided, the solicitor will help with the drafting of a response and help carry out the vital task of correctly costing for the cases.
This will also be accompanied by the disclosure of requested documents to relevant authorities and the gathering of witness statements and additional evidence to help support your case. If required, they will also work to help source comment, reports, and testimony from experts – letting their contributions help guide the direction of your case and be added to your evidence. Once this has been fully assembled, the case will move to trial and a final ruling.
Enforcement
When the trial date is set, the solicitor will work with their client to prepare you for the trial if your testimony is required and ensure that their argument is in the best possible shape. This involves providing a skeleton argument and planning the time required to make your case, with complex arguments potentially requiring exhaustive support and coverage across many days.
When the date arrives, the case will likely be tried in public by a barrister – with some solicitors able to present their arguments in the High Court. Once the trial concludes, the judge will make a ruling on the case which is then provided in court. This will be public which can then potentially be appealed within 21 days of the ruling.
What Are the Results?
While each claim is unique, on average small claims will be heard between three to six months, with fast track claims taking up to nine months, and multi-track claims proving hard to dispute due to the level of complexity involved.
Once a judgement is delivered, it is effective immediately and the party affected by the ruling is required to immediately comply with the ruling. However, extenuating circumstances can result in the debtor being given an extended period of time to comply with the results of the ruling.
It is vital that you take the time to fully vet your case as there may be a chance that the defendant is unable to provide financial compensation – resulting in a legal victory but no capacity to mitigate legal fees.
If you win the case, the judgement can be enforced in a number of ways, including
– Insolvency actions
– Placing charge orders
– Property seizure
– Redirection of debt orders
Want to get into commercial law? Read our page on how to become a commercial lawyer.
Words: Wilson Browne solicitors
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