Owning a business in the UK carries substantial responsibility. Not only do you have to ensure that your financial obligations, e.g., tax and payroll, are met, but you also have to consider contracts and business relationships, which can unfortunately encounter complications.
In business, disputes arise, and sometimes these disputes are irreparable without the support of commercial litigation.
At Brown Turner Ross, we understand that commercial litigation claims can be complicated. In this guide, we will provide you with deeper insight into the process, the right course of action, and what to expect.
What is Commercial Litigation?
Commercial litigation applies to disputes that arise within a corporate context, be that internally or with third-party contracts.
Commercial litigation aims to provide a fair and just resolution for business disputes, while ensuring legal and commercial order is maintained. If commercial disputes cannot be resolved with Alternative Dispute Resolution and are taken to court, the details of the dispute and the court proceedings typically become public, ensuring public transparency.
The main purpose of most businesses that pursue commercial litigation is to seek monetary compensation for losses or damages incurred due to breach of contract or other wrongful acts.
How Much Does Commercial Litigation Cost in the UK?
There is no set price for commercial litigation in the UK; costs depend on case complexity and value. Other factors dictate the cost of litigation, including location, the firm’s individual pricing, and the proposed compensation.
For small claims, you are looking at up to £10,000 in costs, but for high-value and complex High Court Cases, there is potential for the case to cost hundreds of thousands.
Before taking a case to court, you must decide whether or not you can afford the cost of litigation and consider key costs such as solicitor fees, court fees and potential payout costs, as the losing party is expected to pay a considerable portion of the winner’s costs.
What Falls Under Commercial Litigation?
Not sure whether or not your case would be suited to commercial litigation? Here are 6 of the most common cases we have witnessed as commercial litigation solicitors.
Breach of Contract
One of the most common types of commercial disputes is breach of contract. Breach of contract may occur for a number of reasons, including non-payment for goods or services, failure to meet the terms of the agreed contract, and failure to meet the agreed-upon quality standards.
Breach of contract can have a significant impact on businesses, leading to substantial financial loss and damaged relationships. Those who have fallen victim to a breach of contract often seek monetary compensation, contract termination or fulfilment of contractual obligations as initially agreed.
Employment Disputes
Typically, employment disputes between employers and employees arise for a range of reasons. Employment disputes cover;
- Discrimination
- Harassment
- Wrongful termination
- Wage disputes
- Breach of employment contract
- Unfair dismissal claims
Employment disputes can be incredibly complex and often involve sensitive issues, which is why Alternative Dispute Resolution is often encouraged in such cases.
Shareholder Disputes
Being or having shareholders in your company can be complex, and it is not uncommon for shareholder disputes to arise. There are plenty of reasons why tensions may arise between shareholders, such as disagreements concerning the direction of a business, the distribution of profits and even breaches of shareholder agreements.
Shareholder disputes can be incredibly complicated, especially if a company has multiple shareholders and has significant financial stakes. Often, these cases can be complex and require a solicitor with substantial experience in shareholder disputes.
Cross-border Disputes
In today’s globalised economy, cross-border disputes are becoming increasingly common, with plenty of growing businesses having foreign investors or international trade agreements. Cross-border disputes may arise from disputes between investors, jurisdictional issues, or breaches of contract between parties.
Cross-border disputes can be particularly complicated due to differences in the legal systems followed by the parties involved, as well as logistical challenges.
Property Disputes
Within business, commercial property disputes are not uncommon. These disputes usually cover internal disagreements over ownership, use or lease of the real estate.
When dealing with property disputes, it is essential to work with a solicitor who has a deep understanding of property law and local regulations, as this can make a huge difference to any renovations and monetary compensation aimed at achieving.
At Brown Turner Ross, we often recommend to our clients that they only work with solicitors with local expertise, but this is even more important in property disputes, where your commercial property solicitor is instrumental in helping you secure the best result.
Commercial Debt Recovery
As any business owner will confirm, it is often not easy to recover the money you are owed when dealing with other businesses or individuals. For the most part, the other party will eventually pay their bill, but when that doesn’t happen, commercial debt recovery is necessary.
Commercial debt recovery is used to deal with unpaid invoices, defaulted loans, and breaches of credit agreements. If the other party refuses to pay, legal action is required to enforce payment.
The Commercial Litigation Process in the UK
Now that you have a better understanding of the instances in which commercial litigation may be necessary, let’s break down the commercial litigation process in the UK.
The Pre-Action Stage
Before a claim can be issued at court, claimants are advised to take pre-action steps. These steps would typically include writing a letter to the defendant that details your claim and the remedy you are seeking, waiting for a response and cooperating in an exchange of information and necessary case documentation.
At this point, parties will be encouraged to attempt ADR to avoid going to court. If ADR is not successful and the parties aren’t receptive to out-of-court resolution, a claim must be issued in court, along with a ‘Particulars of Claim’, which outlines all of the details of the claim.
Statements of Case
Before litigation can commence, claimants must file formal court documents outlining their case. The core statements of the case that should be submitted include: the Claim Form, Particulars of Claim, Defence, Reply to Defence and any Counterclaims that have been made.
It is important that all statements in the case are accurate and verified with a statement of truth, so the parameters of the case can be accurately outlined.
Case Management Conference
All parties will be expected to agree on a timetable for the trial, including specific completion dates for each stage. During a Case Management Conference, the court will outline a strict timetable, define the issues in the case, and take all necessary steps to ensure the case is prepared for trial.
This is a crucial step in the process, ensuring the case remains on track and all evidence and documents are ready for trial.
Disclosure
Disclosure is the mandatory pre-trial process in which parties identify, preserve, and exchange all documents relevant to the issues outlined in the dispute. All documentation must be submitted, even if it damages the party’s case.
Disclosure is an essential step in the litigation process, preventing ambushes during trial and ensuring all parties have access to relevant information.
Witness Evidence and Statements
Some of the most important evidence in a commercial litigation case is witness testimony. Witnesses will be given an opportunity to provide their evidence in a written witness statement, prepared with the support of a solicitor who will conduct a detailed interview with each witness.
If the case makes it to court, witnesses who have provided statements will be cross-examined on the evidence they have given, so that all technical points of the statements can be verified and ensure that all witness statements are objective.
Expert Evidence
In commercial litigation, expert evidence plays a crucial role by providing specialised knowledge and insights that clarify complex technical or financial issues. Experts assess, analyse, and interpret relevant data, offering opinions that can substantiate or challenge each party’s claims.
Their involvement frequently assists the court in understanding complex subject matter, enabling informed decisions and ensuring technical details are properly represented in the legal process.
Trial and Preparation
Though most cases are resolved before trial, those that are not, proceed to a commercial litigation trial, which involves extensive preparation, including document discovery, witness depositions, and pre-trial motions.
Defendants and claimants are also required to lodge written ‘skeleton arguments’ which summarise the arguments they plan to make at trial and will be cross referenced throughout the trial.
A trial will then commence and may vary in duration depending on the complexity of the case and the factual and expert witnesses required to give evidence.
The trial involves several stages. Typically, there is a pre-trial review hearing where the court verifies that trial preparations are complete and addresses any remaining case management issues. The initial phase of the trial usually begins with each party’s barrister delivering an opening speech outlining their client’s position, arguments, and supporting evidence.
Subsequently, fact witnesses and, if applicable, expert witnesses, will be cross-examined by the barristers. The trial concludes with each barrister delivering closing speeches that summarise the key evidence and legal arguments presented during the proceedings.
Judgment
Following the trial, the judge will consider all the evidence presented and deliver a judgment. The losing party is then required to pay any damages awarded under the judgment and may be subject to enforcement if they do not do so willingly. An appeal can be made, but it is subject to strict rules and must be approved by the courts.
Commercial Dispute Resolution: Work With Brown Turner Ross
This guide has hopefully given you a clearer understanding of the commercial litigation process, including why it may be necessary and how litigation proceeds if settling outside court isn’t possible.
We will always emphasise the importance of working with a solicitor who understands the process and can provide you with the best representation, which just might be us. As solicitors with a wide range of experience in corporate and commercial law, we are ready to help.
Contact our commercial litigation team to find out how we can assist you today.