Member Article

Court Claims - Look Before You Jump

With Watson Burton LLP Law Firm

In the current economic climate, businesses and individuals may find themselves involved in disputes with other parties and facing the prospect of Court proceedings, whether as claimant or defendant to an action. Parties should be aware of the obligations placed upon them by the Court before formal proceedings are begun, and understand that the extent of the parties’ compliance with those obligations will be subject to scrutiny should the matter come before the Court.

Since the introduction of the Civil Procedure Rules (CPR) in 1999 to govern the litigation process, the Court has by way of rules, practice directions and pre-action protocols pursued an increasingly pro-active agenda in encouraging parties to attempt to resolve their disputes early and by means other than court trial (methods known collectively as alternative dispute resolution or ADR, for example mediation, arbitration and negotiation). This approach has been coupled with a more thorough examination by the Court of the conduct of the parties before and during the litigation process. As from 6 April 2009, a new practice direction is in force in relation to general pre-action conduct. The new practice direction not only provides supplemental provisions for claims where a specific pre-action protocol already exists, but also sets out the conduct required in all other cases together with detailed guidance on what will normally satisfy the Court.

For claims where no other protocol or statutory procedure applies, and before proceedings are commenced, the Court will normally expect:

• a claimant to send a letter to the defendant giving details of the claim.
• a defendant to provide a full letter of response within a ‘reasonable period of time’ which is normally 14 days in straightforward cases (although a longer period may be reasonable in more complex matters). If more time is required, a defendant should acknowledge the letter of claim in writing within 14 days.
• the parties to have considered ADR. The detailed guidance is that the letter before claim should identify the form of ADR (if any) that a claimant considers most suitable and invite the defendant to agree to this.
• where a defendant does not provide a full letter of response or acknowledgement within 14 days, the Claimant is likely to be taken to have complied with his pre-action obligations (and justified in commencing proceedings).

The detailed guidance is not intended to apply to debt claims where it is not disputed that monies are owed. However, claimants who are businesses should note that certain specific information is now required to be provided in a debt claim against a defendant who is an individual.

It is important that parties consult and adhere to the new practice direction including the detailed guidance (and any relevant protocol) before commencing proceedings because failure to do so may result in the Court imposing sanctions for non-compliance. This may include suspending any proceedings in order that pre-action conduct may be properly complied with; ordering a party at fault to pay part or all of the other party’s costs; and/or disallowing or enhancing interest on a claim dependent upon where fault for non-compliance lies.

If you have any comments or questions about this article, please contact Gareth Booth of Watson Burton LLP at gareth.booth@watsonburton.com.

This was posted in Bdaily's Members' News section by Ruth Mitchell .