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Technology and construction court (TTC)
Mercantile court Commercial court
Technically complex issues Building/construction Enforcement of decisions of adjudicators Engineering Architects Surveyors Accountants Construction of buildings Computers, computer softwares Landlord/tenant Neighbours Environment Fires Decisions of arbitrators General business matters in general if not specialist in the Chancery division Contract Export/import of goods Carriage of goods Exploitation of oil and gaz Insurance/reinsurance Banking/finance Sale of commodities Admiralty/construction of ships Business agency arbitration 1
TYPE OF CLAIM / COURSES OF ACTION– CONTRACT OR TORT OR OTHER? BREACH OF CONTRACT Requirements:
Element to Details Legal authority establish 1. Contract (the existence of the contract) Offer, acceptance, consideration, intention to create legal relations 2. Breach of contract (cause of action) Sale of goods Act 1979 Implies conditions into a contract for the sale of goods, where the seller sells in the course of a business Not satisfactory quality 14(2) Implied condition that the goods will be of satisfactory quality, i.e. as to appearance and finish, free from minor defects, safe, durable and fit for purposes for which goods of the kind in question are commonly supplied (14(2)) Where a buyer makes known to the seller a particular purpose for which the goods are being acquired, the goods are reasonably fit for that purpose (s14(3))
Not fit for purpose 14(3)
Quality or fitness for use s.4 Supply of goods and services Act 1982 Skill and care s.13 3. Causation Did the breach of contract cause the loss?
Implied condition re: quality or fitness for use: that where a transferor supplies goods in the course of a business, there is an implied condition that the goods supplied under the contract are of satisfactory quality (4(2) “Satisfactory quality” is where the goods meet the standard that a reasonable person would regard as satisfactory, taking into account of any description of the goods, the price (if relevant) and all other relevant circumstances (4(2A)). If dealing as consumer see 4(2B) Implied term re: skill and care: in a contract where the supplier is acting in the course of a business, there is an implied term that the supplier will carry out the service with reasonable care and skill (s13)
The damages must not be too remote from the breach: Consequential loss flowing from breach Hadley v Baxendale – reasonably foreseeable at the time of the contract: • everyone is taken to know what loss is liable to result in the ordinary course of things from a breach • in addition, the person breach in the contract may have actual knowledge of special circumstances which would give rise to additional loss
4. Loss (remedies available) Purpose of damages – to place the injured party in the position he would have been in if the contract had been properly performed. (a) rejecting the goods and claiming by way of damages a sum to enable him to buy goods equivalent to what should have been supplied under the contract (b) where not possible (because the goods have been accepted) claiming by way of damages a sum to compensate for the loss suffered (c) 5. Mitigation Has C mitigated his loss? Cf. no duty to mitigate in a debt action.
Under the precedent set in Hedley Byrne v Heller a duty of care shall exist in respect of negligent 2
misstatement if the following criteria exist: Depends upon proof of a special relationship existing between the parties. Such a duty can arise in a purely commercial relationship where the representor has (or purports to have) some special skill or knowledge and knows (or it is reasonable for him to assume) that the representee will rely on the representation Remedies: • The injured party may elect to claim damages for negligent misrepresentation at common law. The test of remoteness in the tort of negligence is that the injured party may recover for only reasonably foreseeable loss Rescission, ie setting aside the contract, is possible in all cases of misrepresentation. The aim of rescission is to put the parties back in their original position, as though the contract had not been made. The injured party may rescind the contract by giving notice to the representor, unless any of the bars apply: (i) AFFIRMATION OF THE CONTRACT (ii) LAPSE OF TIME (iii) RESTITUTION IN INTEGRUM IMPOSSIBLE (iv) THIRD PARTY ACQUIRES RIGHTS
NEGLIGENCE Elements to establish Duty of care Facts to establish D owed duty of reasonable care and skill Available evidence • Caparo v Dickman • Smith v Eric Bush (surveyors owe DofC; to that of a r'bly competent surveyor) Breach of duty Causation D failed to carry out duty • But for D’s breach would C have suffered loss? • Could type of damage been seen by rsb man? i.e. loss not too remote "reasonably foreseeable" Damage/loss Apply to facts • Apply to facts • Diminution in value = what was paid LESS what it was worth Witnesses, docs, experts Apply to facts
“a substantial and unreasonable interference with C’s use or enjoyment of land” 3
As a person of ordinary sensitivity living in that locality Factors: o Location o Extent of harm o Continuing? o Social value of D’s use o Motive For a matter to qualify and be actionable as a nuisance in law it must be a serious matter. One-off events are rarely sufficient. Also, specific sensitivities of those suffering cannot be taken account of in deciding whether a matter is a nuisance.
Damage: o Tort o Reasonably forseeability o remoteness Under the common law, the only remedy for a nuisance was the payment of damages. However, with the development of the courts of equity, the remedy of an injunction became available to prevent a defendant from repeating the activity that caused the nuisance, and specifying punishment for contempt if the defendant is in breach of such an injunction.
IF CONTRACT – CHECK TERMS OF CONTRACT LIMITATION CLAUSE ARBITRATION CLAUSE JURISDICTION CLAUSE PROVISIONS REGARDING PLACE OF PERFORMANCE I TUT AND WS 1 AND GA 1 ITUT AND WS 8 ITUT AND WS 2 I TUT AND WS 2
EVIDENCE TO SUPPORT CLAIM WS6 AND I TUT DISCLOSURE DOCUMENTARY Structure for Disclosure Question – r31.6 1. Is it a Document? Wide definition Anything information recorded on (r.31.6) Ie written documents, discs, photos, included deleted ones Electronic disclosure under PD 31 para 2A o If email think about (a) the original held by the recipient and (b) copy held by the sender
2. Was / Is it in the clients control? Must make a ‘reasonable search’ (r31.7) – for guidance see the nature/complexity of issues, ease / expense of retrieval / significance of document limited to documents which are, or which have been in his control under R.31.8(2): Would require SOL a) Is it / was it in his physical possession to check the b) Has / had right to possession of it contractual and c) Has / had right to inspect or take copies of it constitutional doc’s. parent/subsidiary: parent company considered as a 3rd party but subsidiary does not have control of parent company’s docs parent company would have control of subsidiary documents
Does the Subsid have rights over parent’s doc’s and vice versa
CHECK capacity person holding documents eg Director of client company and x company, is the director holding the document in capacity as director for client comp or x? if x then not in control.
3. Is it a R.31.6 document? Document client relying on (r.31.6(a)) Document adversely affects clients case (r.31.6(b)(i)) Adversely affects another party’s case (r.31.6(b)(ii)) Supports another party’s case (r.31.6(b)(iii)
IF YES = DOCUMENT MUST BE DISCLOSED 4. Is it privileged from inspection? (think about when it was created and why) NB – A copy cannot be privileged if the original is not privileged! LEGAL ADVICE PRIVILEGE: o Communications between party and solicitor o For sole or dominant purpose of obtaining legal advice LITIGATION PRIVILEGE: Important : identify when litigation was contemplated o o o o Communications between Solicitor and 3rd party, or 3rd party and client For sole or dominant purpose of obtaining evidence, or obtain or give legal advice When litigation in reasonable contemplation or pending LOOK FOR ‘strictly privileged & confidential ‘ on doc’s = not conclusive but evidence to suggest the intention of parties
COMMON INTEREST PRIVILEGE o Communications between parties with common interest in potential litigation o Dominant purpose – inform other party of legal situation, exchange, facts, issues advice received or for purpose of receiving legal advice o Is parent funding litigation? Will their reputation be affected? o Interests sufficiently close that could’ve used same solicitor o This applies to parties in the same group, because if one company within the group is found liable there will be financial consequences for all comp’s in the group
ALWAYS SAY WHICH PRIVILEGE AND WHY IT IS PRIVILEGED!!!! 5. Which part of list (N265(CC)) should document be disclosed in? - PART 1 – Has control of documents AND does not object to opponent inspecting them - PART 2 – Objects to opponent inspecting them - PART 3 – Documents you once had in your control (Not Priv / not in control) These are usually the original versions of non-privileged documents sent to a third party CHALLENGING DISCLOSURE BY OPPONENT CHALLENGE TO CLAIM THAT A DOC IS NOT PRIVILEGED: If you suspect that a document listed in Part 2 is not privileged, write to opponent If no satisfactory reply is received then: - apply to court under r.31.19(5) = the court will decide whether doc is privileged - court can require doc be produced to court to rule on issue of privilege INCOMPLETE DISCLOSURE: If you suspect that some doc’s haven’t been disclosed, write to the other side covering following points: refer to list of documents state that disclosure is inadequate for reasons given in attached schedule o limits placed on search aren’t reasonable or proportionate (scope of where / what searched for) o Part A: inadequately itemised (e.g. bundles) and missing items + why they should be there state action required – supplemental list of documents verified by affidavit within 21 days state action if not received: o application in accordance with Part 23, o R.23.12 – specific disclosure and inspection of omitted documents disclosable by an increase scope of search under r.31.17 o Application will be accompanied with a witness statement justifying why order sought and why it should be given PD 31 Para 3.2 – proper itemisation of doc’s disclosed R.31.19 – Challenge part 2 documents privilege claimed Conclude with summary of what we want: o Supplemental List of Doc’s verified by affidavit o Consequential direction o Costs for application
THEN – 6
If opponent doesn’t comply with specific disclosure apply for an ‘unless order’ under r.3, if they still don’t comply with that then their claim / defence will be struck out and case over. EXPERT PART 35 AND PARA H2 OF THE COMMERCIAL COURT GUIDE
Role of experts in commercial court Instruction to experts Opinion + facts In commercial court: more likely to be able to call more than 1 expert Not privileged Expert’s protocol: o Encourages exchange of early and full info about expert issues involved in a prospective claim (read w/CPR 35 + PD 35) If improper instructions were give, this may become clear at cross-examination and may lead to an application to disclose (part 35.10)his instructions on the basis that there are reasonable grounds for believing that the statement of instructions in the report are inaccurate/incomplete Duty is to the court, not to party instructing the expert (PD35 para 1.1) Must be independent and uninfluenced by the pressures of litigation PD 35 para 1.2 Must consider all material facts including those which might detract from his opinion PD35 para 1.4 PD 35(2).4 statement of truth- if breach: possibly liable for contempt of court PD 35 para 2.5 The Ikarian Reefer o Impartial/independent/objective o Must not ignore material facts o State facts which form their own opinion o State where a matter falls outside expertise o State if view is “provisional” Part 35.1.4(2) If expert feels improper pressure Must be given to other parties 4 days before he applies Must be given to own party 7 days before application Need to prove that truly independent and understands that his primary duty is to court, not employer Apply for report to be excluded and/or for the instructions to be disclosed in full Possible breaches: o PD 35 para 1.1: may not understand duty to the court o PD 35 para 1.2: could be influenced by his position as employee o PD 35 para 1.3: may not be objective/unbiased o PD 35 para 1.4: may not have considered all material facts Solicitor under duty not to mislead the court (Draft code of conduct 11.01)
Duty of the expert
Request for directions by expert
Expert employed by a party instructing him Biased/inadequacy of report
PROCEDURAL STEPS ON COMMENCEMENT OF PROCEEDINGS IN THE COMMERCIAL COURT C issue proceedings in Commercial Court
Serve claim form + response pack (may be with or without partics of claim) –Pt 58.5(b)
D file Acknowledgement of Service within 14 days of service of Claim Form –Pt 58.6(2)
If PoC NOT served with Claim Form then C must serve PoC within 28 days of AoS- Pt 58.5(c)
Subject to extensions of time D must file defence within 28 days of service of PoC- Pt 58.10(1)
If D want to joint third party as Part 20 Third Party then issue Part 20 Claim Form at same time as OR before filing defence –Pt 20.7(3)
C may file reply to defence within 21 days of service of defence Pt 58.10(1)
Serve Part 20 Claim Form on Third Party within 14 days of issue with Response Pack + copy of every statement of case already served- Pt 20.12(1) + Serve a copy of the Part 20 Claim Form on CPt 20.12(2)
CMC will deal with directions for trial for both the main action and the third party proceedings. Pt 20.13 and PD 58 para 12 (note no allocation questionnaire, instead C M info sheet –PD 58 para 10.7)
Service of AoS by Third Paty as per Part 58 procedure- Pt 58.6
Third Party serve defence to Third Party ClaimPt 58.10
PART 20 PROCEEDINGS Introduction Part 20 by which the court manages disputes involving a number of parties or causes of action. The aim of the court is to have as few actions as possible, with as few parties as possible. • this reduces duplication of work, • ensuring that the dispute is resolved as quickly as possible and • without incurring unnecessary costs; • it also avoids the risk of inconsistent judgments on related matters. Counterclaim Part 20.4(1): counterclaim is claim by the defendant against the claimant - File a defence + counterclaim Part 20.5 counterclaim against person other than the claimant Part 20.6 claim for contribution/indemnity from co-defendant (multiple defendants) Part 20.7 3rd party proceedings- treated as separate claim but takes place within existing case number
Join other parties to the litigation
PRE ACTION PROTOCOLSCHECKLIST – MEETING CLIENT FOR FIRST TIME 1 Check for any professional conduct issues What are clients objectives: 2 • • • • Maintain relationships – often very key Cost and speed of any action Adverse publicity – privacy often key Relationships with other customers that client works with
Identify all the parties that could be involved: A ------ sues ------- B --------- sues (using Part 20 Third Party Claim) ----- C 3 When considering who to serve Part 20 consider: • Current relationship and how this would be affected • Are they solvent • What B will want from C ? eg Indemnity for what B has to pay A plus damages Financial viability of parties involved Nature of the claim: • Breach of contract, if so what section of SGA / SGSA • Negligence 9
Jurisdiction and Applicable law: consider; • Foreign jurisdiction legal rules eg level of damages, claiming costs • Does firm have capability to work in case abroad • Enforceability of any judgements at home and abroad NB – a physical check of the contracts is essential to determine what law and which jurisdiction applies
Limitation period - 6 years or does the contract shorten this??? How will the case be funded?? • Run through the various options: o After event insurance – can expect to pay around 40% of claim for the insurance premium so this should be considered. o CFA – generally not used in commercial litigation due to the level of risk involved o Money on account – most common Further information / Evidence needed: • Essential to see all contractual documents that are involved in case in order to check the terms and conditions – check they match to what client believes. • Proof of breaches / negligence • Any reports – from both sides in the case and all expert opinions NB – some kind of duty to preserve documents applies to solicitors??? FIND OUT WHAT RULE Consider dispute resolution options: • Negotiation • ADR / mediation • Insol • Litigation • Expert determination • Do nothing Comply with PD protocols Agree next steps going forward
Limitation Issues Periods The principal statutory authority is the Limitation Act 1980 (LA 1980). In the majority of cases, the limitation period commences on the date the cause of action arises. The basic rule for actions founded on contract or tort is that the claimant has six years from the date of the cause of action to commence proceedings. Initial considerations • • Failure to issue proceedings or take other steps within the limitation period has always been a major source of negligence claims against solicitors. All necessary checks must be put in place to ensure that any time limits are not missed (eg a duplicate diary system), 10
• • • Exceptions
If there is any doubt as to whether the limitation period has expired, or if the time period left is short, a solicitor should issue proceedings to protect the client’s position. Even if the most obvious claim is time-barred, an alternative claim might be available. Solicitors acting for potential defendants should pay equal attention to this consideration when first approached by their client. If limitation can be pleaded as a defence, it is a very effective tool for a defendant.
Negligence claims in tort have a time limit that can be extended by s.14A LA 1980 to the date three years after the claimant first had knowledge of all the facts relevant to the cause of action with max of 15years. Some other points are worthy of a brief mention. (a) Fraud. Section 32 of the LA 1980 contains a similar exception to that contained in s 14A, namely that in the event of fraud, concealment or mistake, the limitation period is postponed until six years from the claimant discovering the fraud. (b) Consumer. Claims under the Consumer Protection Act 1987 are subject to a statutory 10year longstop date after which claims cannot be brought. (c) Contribution. Where a claim for contribution is brought by way of separate proceedings (ie not by way of an additional claim under Part 20), under the Civil Liability Contribution Act 1978 the limitation period is two years from the date of judgment or, if none, from the date of any agreement to settle reached between the parties. (d) Pending actions. S.35 of the LA 1980 and r 19.5 of CPR 1998 restrict the ability of a party to defeat the rules on limitation by adding a new claim to existing proceedings when it would be too late to start a separate action.
INJUNCTIONS – ARE ANY NECESSARY? ITUT AND WS 3 AND WS 4 General Points • • Who are you working for? Are you arguing for or against the injunction? Normally more than one in a question C must give cross undertaking (PD 25 para 5.1(1) Undertaking to court to serve on D o Application notice, evidence in support and order made ASAP (PD 25 para 5.1(2)) o Case law also required D be given full notes of hearing Order must state return date for hearing where D will have opportunity to argue injunction be set aside (PD 25 para 5.1 (3) If made before application notice filed – undertaking to file and pay fee on next or same day If made before claim form issued – undertaking to issue claim form on same or next day OR order contains directions for commencement of proceedings (PD 25 para 5.1(5)
ORDERS FOR INJUNC’S AND C’S UNDERTAKING S
Undertaking v’s Injunctions UNDERTAKING Saves costs – don’t needs interim hearing As effective as injunction with penal notice – non compliance punishable as contempt of court Can negotiate terms of undertaking so restraints on D more acceptable than what would be imposed by injunction Judge may be more favourable towards D when awarding costs because D’s acceptance of undertaking makes them appear reasonable and saved cost of interim hearing. INJUNCTION - Either party can apply to vary or set aside BUT o More difficult to vary or set aside undertaking because given voluntarily by D o Undertaking only varied if significant change in circumstances or have become aware or new facts - If injunction set aside, D may be entitled to damages because of C’s cross undertaking
COSTS OF INJUNCTION
Costs are usually reserved for trial judge to decide If injunction later set aside trial judge will order C to pay D’s costs of injunction hearing Judge may order costs then and there if one party clearly has stronger case OR either party acted unreasonably in pursuing application – ‘costs in any event within 14/21 days’.
OPPOSING INJUNCTION STRUCTURE
If you are opposing the injunction then you will be arguing that the test has not been satisfied and/or that the order should be varied: How to attack injunction: 1. attack the root test for that injunction 2. any arguments in equity? o Full diusclosure? o Malice 3. any procedural irregularities? 12
CPR? Served documents correctly? Search order: Any parts of order been breached? Any undertaking not been fulfilled? 4. how can it be varied so better for client? o Narrow order o Personal / business allowances o o o PROHIBITORY INJUNCTION
APPLYING FOR A PROHIB INJUNC – WITH NOTICE
PROCEDURE: 1. Apply for application notice – FORM N244(note: r 23.3(2) allows court to dispense with this requirement-urgent) Notice must state: o Order sought and why (r.23.6) o Date, time and place of hearing (PD 25, para 2.1) 2. Must be supported by evidence, unless court says otherwise (r.25.3(2) 3. Evidence can be set out in witness statement verified by statement of truth (PD 25, para 3.2) and state: o Cause of action o Facts applicant relying on and all material facts court should be made aware of (PD25 para 3.3) o Therefore should include information of C’s financial situation because of cross undertaking needed from them 4. Application notice and witness statement must be served ASAP after its been issued, AND o Not less than 3 days before hearing of application (r.23(7(1)), AND o It must be filed with court (r.23.7(2)), AND o Any draft order containing terms of injunction, penal notice and cross undertaking must also be served and filed 5. Undertaking of Claimant o Order for Prohib injunc must have undertaking from C: - To pay any damages suffered by D that court deems appropriate (PD 25 para 5.1(1)) ie cross undertaking – Court must be satisfied that C is financially viable. 6. Issue fee
APPLYING FOR A PROHIB INJUNC – WITHOUT NOTICE
WHEN IS IT ALLOWED? Court can grant interim remedy on without notice application if appears there are good reasons for no giving notice (r.25.3(1)) Usual reasons: o o Matter is too urgent to wait for notice to be given D would take steps to harm C if forewarned of application
Application may be made orally if insufficient time for writing, but court will require undertakings from applicant or his solicitor to file and serve written evidence to support application: 1. Evidence in support of the application must explain why notice not given- evidence. C must make FULL disclosure of all facts, including any that go against C’s case. Pt 25.3(1) 13
2. The application, supporting evidence and a draft order should be filed 2 hours before hearing, wherever possible (PD25 para 4.3(1) 3. Evidence in support of the application should state: (a) the material facts the court should be made aware of (PD 25 para 3.3); (b) the facts justifying an interim injunction; (c) the facts justifying an application without notice to the D (r.25.3(3) + PD25 para 3.4) (d) any answer which is likely to be raised by the D ie in support of D’s case; (e) any facts known to the applicant which might make a without notice - remedy inappropriate; and - the precise order being sought. APPLICATION MADE BEFORE CLAIM FORM ISSUED: Court can grant prohib injunc before proceedings commenced if: o Matters urgent o Or desirable in interests of justice o R.25.2(1) & (2)
1. Application notice, evidence and draft order filed with court 2hrs before hearing (PD25 para 4.3(1) 2. if application made before application notice issued: o draft order should be provided at hearing, AND o app. notice and evidence filed with court on same or next working day (PD 25 para 4.3(2) 3. C should informally notify D of application unless secrecy essential (PD 25 para 4.3(3)) 4. C must undertake to court to issue claim form immediately, or court will give directions for commencement of claim (PD 25 para 4.4(1)) 5. C should try and serve claim form with order for injunction on D (PD 25 para 4.4(2) APPLICATION MADE AFTER CLAIM FORM ISSUED: Same as first 3 steps as in procedure for application made before claim form issurd Simply DON’T have to undertake to issue claim form
AMERICXAN CYANAMID GUIDELINES:
Court has discretion to grant P.I even if guidelines are met 1. IS THERE A SERIOUS QUESTION TO BE TRIED? C must show that he has a real prospect of success o Use evidence to show that have a good arguable case - cause of action with substance. o Don’t have to prove that they will win D must show he has an arguable defence / ie real prospect of success o If DO then rest of guidelines are considered o If DON’T then injunction granted so long as damages would be inadequate remedy for C o (mention any possible ulterior motive of C for applying for injunction that makes it inequitable for injunction to be granted)
2. WOULD DAMAGES BE AN ADEQUATE REMEDY FOR C C must argue damages would be inadequate to compensate them in these circumstances because: 14
o o o
Loss unquantifiable Irreparable loss (eg damage to reputation or loss of business) D wouldn’t be able to pay damages
3. CAN C GIVE CROSS UNDERTAKING? AND WOULD IT BE ADEQAUTE REMEDY FOR D? IF C had to pay the D damages, would it be an adequate remedy to D for harm caused by injunction? Injunction usually will only be granted if C can give cross – undertaking o Ie injunction later set aside and D’s suffered loss, C will pay D damages o Therefore, can C afford to give such an undertaking? Can damages adequately compensate D for loss suffered because of injunction? o C would have to argue D’s losses would be quantifiable o D could argue that they’d suffer irreparable damage to reputation or loss of business o Therefore, damages would be inadequate D could also argue that C wouldn’t be able to afford damages
4. WHERE DOES THE BALANCE OF CONVENIENCE LIE? Which course of action will cause the GREATER harm? o What course of action will cause the least harm? o Consider whether either will suffer irreparable harm o D should mention any alternative malicious motive of C for bringing application – C not coming with ‘clean hands’. Status Quo o If balance of relative harm doesn’t clearly favour on party o Court usually upholds status quo: If C hasn’t delayed in applying for injunction = status quo = position parties in before cause of dispute arose If C has delayed in applying = status quo = position of parties just before application issued o Therefore C should mention haven’t delayed in application and what status quo is o Or if C has delayed, D should mention this and status quo IF COURT CANT MAKE DECISION AFTER CONSIDERING THE ABOVE: o Consider whether one party clearly has a stronger case – only able to do this if American Cyanamid guidelines don’t produce solution
5. EXCEPTIONS TO AMERICAN CYANAMID There is unlikely to be a trial Applications to prevent court proceedings Applications for injunctions preventing publication of confidential information where ---there are public interest issues. Applications for mandatory injunctions Applications for freezing injunctions or search orders
If injunction granted, early trial should be considered minimising the loss suffered by D as a result 15
Grounds for applying to set aside or vary: 1. The C has failed to satisfy requirements for obtaining injunction 2. Equitable grounds 3. Reach a conclusion
STEPS 1 TO 3 = THE ROOT TEST
1. Good arguable case AFTER full disclosure ie a real prospect of success (essentially same as American Cyanamide , IPI) 2. Does D have assets within England and Wales? 3. D has property in jurisdiction and intends to act so as to frustrate the enforcement of the C’s judgement: ‘Real likelihood’- C must persuade court that D will deliberately deal with assets in a way which will defeat C’s ability to recover damages. Usually needs to be clear evidence that the D is a ‘debt dodger’/previous conduct, incl dishonesty, disregard of court orders, evidence of taking steps to dispose of assets.
STEPS 4 TO 6 = SET ASIDE OR VARY ORDER
D will argue that the order should not have been made in the first place under one of following: 4. Does C have a good arguable case after FULL disclosure? Even after all of the weaknesses of C’s case and strengths of the D’s case considered? o C still has a real prospect of success o Low threshold Application always made without notice: o C has duty to disclose all points D would have raised? Did they? o Duty to make reasonable enquiries o Has C made full and frank disclosure?
5. Does D have property in Juris and does he intend to act so as to frustrate enforcement of C’s judgement if C wins? Need to show real likelihood not mere possibility that D will frustrate enforcement? Any evidence that they will / wont? Eg by moving property out if the Juris or disposing of it in other ways? Need evidence to show D is ‘debt dodger’ – type of person to try and frustrate C’s enforcement – D should argue that C has no such evidence – never tried to avoid debts D have any innocent reason for disposing of property to counter C’s argument? Yet if D is based outside UK court will take into account D’s ability to remove property from Juris AND difficulty of enforcing judgement in that country
6. Any equitable arguments? Can D argue C didt come to court with clean hands? Did C fail to make full and frank disclosure? Any ulterior malicious reasons for C applying for freezing order? Delay before application made? 16
IF CANT SET ASIDE THEN: 7. Any variations to order sought if court won’t set it aside? Need evidence to show variations necessary Increase business expense? Decrease amount frozen? Increase domestic expense?
GENERAL INFORMATION ABOUT FREEZING INJUNCTIONS
PURPOSE (r.25.1(1)(f): Prevent D disposing of property by removing assets from Juris Restrains D from dealing with assets wherever located
LIMITED TO: Value of freezing injunction limited to likely amount of judgement If D had assets worth more than amount specified in order – can deal with surplus freely Therefore, D will always hold assets C can enforce judgement against if succeed
EXCEPTIONS: D allowed to withdraw weekly specified sum for living and business expenses and legal costs Amount D allowed to withdraw must be reasonable – based on D’s usual lifestyle
3RD PARTY LIABILITY: 3rd party can be in contempt of court if informed of order and help D break the order eg bank Not liable in damages 3rd party can apply to have injunction set aside or varied if its causing them undue difficulty
APPLICATION PROCEDURE: By application notice FORM N244 Made without notice Application supported by evidence in affidavit (PD25 para 3.1)
ORDER SEARCH ORDER Obtaining and Set Aside Must include penal notice else D cant be held in contempt of court for non-compliance C gives cross undertaking Return date – hearing where D can try and get the injunction set aside or varied States particular assets frozen – lists ones C knows of BUT not limited to them Amount D frozen up to – can use surplus freely
STEPS 1 TO 3 = THE ROOT TEST
1. Does C have EXTREMELY strong prima facie case after FULL disclosure? o Higher standard – C will likely succeed not mere prospect, even after all weaknesses in their case considered o Has C made FULL disclosure? Including supporting affidavit All points D would have raised if had chance to be heard Because always without notice application for search order C has duty to disclose D’s case 17
Duty to make reasonable enquiries
2. Has C proved that he’ll suffer serious harm and injustice if order not made? o Evidence that D will destroy evidence or property belonging to C in D’s possession? o If were destroyed – is this irreplaceable? Would cause signif harm to C’s case? 3. C cant recover materials in D’s possession by any other means? o Taken steps to contact D and do everything reasonably could to get them to voluntarily hand them over? o Order for delivery up of goods not possible?
STEPS 4 TO 6 = SET ASIDE OR VARY ORDER
D will argue that the order should not have been made in the first place under one of following: 4. Any equitable arguments? o Because its an equitable remedy, shouldn’t be granted if C didn’t come to court with clean hands o Failure of C to give FULL and FRANK disclosure o Possible malicious / ulterior motive for applying for search order and bringing claim? o Did C use force as this is not permitted o Delay before application? Acquiescence through delay? Evidence that C wouldn’t really suffer serious harm if materials destroyed, or didn’t really think D would destroy them else wouldn’t delay 5. Any procedural irregularities? o Check search order and PD25 para 7.4 and 7.5 was complied with when search carried out o Any breach equals contempt of court 7.4 Service: (1) the order must be served personally by the Supervising Solicitor, (3) the Supervising Solicitor may be accompanied only by the persons mentioned in the order, (4) the Supervising Solicitor must explain the terms and effect of the order to the respondent in everyday language (5) where the Supervising Solicitor is a man and the respondent is likely to be an unaccompanied woman, at least one other person named in the order must be a woman and must accompany the Supervising Solicitor, and (6) the order may only be served between 9.30 a.m. and 5.30 p.m. Monday to Friday
7.5 Search and custody of materials: (1) no material shall be removed unless clearly covered by the terms of the order, (2) the premises must not be searched and no items shall be removed from them except in the presence of the respondent or a person who appears to be a responsible employee of the respondent, (3) where copies of documents are sought, the documents should be retained for no more than 2 days before return to the owner, (8) if any of the listed items exists only in computer readable form, the respondent must immediately give the applicant's solicitors effective access to the computers, with all necessary passwords, to enable them to be searched, (9) the applicant must take all reasonable steps to ensure that no damage is done to any computer or data, (10) the applicant and his representatives may not themselves search the respondent's computers unless they have sufficient expertise to do so without damaging the respondent's system, (13) where the Supervising Solicitor is satisfied that full compliance with paragraph 7.5(7) and (8) above is impracticable, he may permit the search to proceed and items to be removed without compliance with the impracticable requirements. IF CANT SET ASIDE THEN: 6. Apply to have the order varied: o Any documents that have been taken to be returned immediately to SOL or client
GENERAL INFORMATION ABOUT SEARCH ORDERS
Undertakings (schedule 3)
Supervising solicitor Dealing with items -
Undertaking as to damages from C (compensation if oppressive + confidentiality) Applicant’s solicitor o Safe-keeping of docs SS’s solicitor o Explain effects of order o Inform respondent of right to legal advice o Provide report If solicitors make mistakes: contempt of court Experienced in operation of search orders Independent To help D understand what is happening + nothing else happens Prepare report afterwards C’s solicitors should file affidavit o ID supervising solicitor’s experience Order must be served personally by supervising solicitor Order will specify items C cannot take away everything that may be relevant Evidence belonging to D o SS undertakes to return original within 2 working days o Can take copies Ownership disputed o Applicant’s solicitor can retain items until gets undertaking by D’s solicitor to keep them in safe custody and produce them on request of the court (cannot let anyone else use items) o Then applicant’s solicitor must give items to D’s solicitor within 2 working days Penal notice: warns of contempt of court Applicant can ask D’s cooperation but cannot compel it o Only remedy is contempt of court Permits search of premises mentioned in order + places discovered as result of the order + vehicles on/around premises Can include home (ATTENTION if woman only, SS needs to be woman) There can be a representative of application (must inform court) Required to cooperate Para 18 Required to show where items are Para 16 required to hand over items Para 18 required to reveal IDs + address of suppliers and customers + location of items Confirm info is accurate Entitled to have order explained to him Para 10+ 11 entitled to refuse disclosure of docs under privilege Para 20 can’t tell anyone except his lawyers about proceedings + search order Para 21 can’t destroy, tamper cancel or dispose of items If does not comply: CONTEMPT OF COURT
Terms of the order
ESTABLISING JURISDICTION (EU AND RoW)
IF BOTH PARTIES BRUSSELS REGULATIONS ARE DOMICILED EU jurisdiction checklist: IN THE EU
1. Is the dispute subject to arbitration (Art.1(2)(d)) ?? IF YES THE REG’S NOT APPLY
2. Is it a civil or commercial matter? (BR only applies to these)
3. Is there exclusive jurisdiction under Art.22? IF YES THE REGS WILL NOT APPLY Cant be contracted out of
1. Concerns regulation of IP rights State where the registration was applied for or has taken place. if the dispute is about whether they have been infringed, the normal rules apply Article 22(4)
2. Dispute concerning land rights Exclusive jurisdiction in the courts of the state where the property is situated any claim for any equitable remedy (eg specific performance) claimant free to sue in the defendant’s local court if he so chose. Article 22(1)
3. Concerns constitution or dissolution of Company State where the company has its seat Article 22(2)
4. Where judgement is being enforced Any dispute arising out of the enforcement of a judgement must be heard in the State where judgement is being enforced (Art.22(5))
4. Is it a consumer or insurance contract? IF YES THE REGS WILL NOT APPLY 1. Insurance (Article 8 – 14) insured can choose to sue in own home court or insurer’s home court insurer must sue in insured’s home court (Article 12(1) liability insurers and insurers of property can be sued in MS court where cause of action
2. Consumer Contracts (Article 15 – 17) consumer can choose to sue in own local court or other parties other party must sue consumer in consumer’s local court can only contract out of the above after dispute’s arisen – anything before agreed will be void.
5. Has the D submitted to the jurisdiction? Eg filed defence / failed to make app to
challenge jurisdiction in time… if not:
1. Has C issued and served a claim form? 2. has D filed a defence? 3. if yes then D’s submitted to jurisdiction of Court C issued claim form NB – applies even if there is an exclusive jurisdiction clause in contract. Not possible if rules of exclusive juris. apply (Article 22)
4. Also submit if D files acknowledgement of service saying they intend to challenge Juris. AND then fail to make application within time limit (28 days from acknowledgement of service if commercial or mercantile court, 14 days in all other cases) 6. Is there a binding exclusive jurisdiction clause (Art.23) The agreement must be; - in writing or - evidenced in writing or - capable of being inferred from an international trade or - commercial activity of which the parties were or should have been aware. If the parties agree to confer juris. to specific court then that specific court will have juris. Cant contract out of exclusive juris. rules (Art 22) (ie insurance and insurance etc)
IF NONE OF THE ABOVE APPLY: NB – step 7 and 8 carry equal weighting
7. Apply basic rule – Art 2 – sue where D is domiciled 1. D to be sued where they’re domiciled if all of above don’t apply (or no alternative stated below can be used) Three months’ residence will prima facie establish domicile (s.41) 2. S.41 of Civil Juris & Judgement Act 1982 - Individual domiciled in England and Wales if they’re resident there, and - Nature and circumstances of their residence indicate substantial connection with UK 3. Art 60 – Domicile of company registered office or p/s – where is has its statutory seat, central admin or principal place of business.
8. Any alternative applicable rules: a. Art 5(5) – branch or agency alternative
Can issue proceedings in MS branch / agency domiciled if: 1. Company domiciled in a MS and has branch in another MS, AND 2. The dispute has arisen out of operations of that branch / agency b. Art 5(1) – contract alternative (nb – what is the place of performance) Can issue proceeding in MS where place of performance of contract occurred or should have occurred Where more than one obligation is in dispute, the courts for the place of the principal obligation was to be performed have juris. (Shenavai v Kreischer) UNLESS agreed to contrary, place of performance will be: o sales of goods = where goods were / should have been delivered (Art 5(1)(b) o supply of services = where services were / should have been provided (Art 5(1)(b) 22
IF mixed goods and services – services prevail
c. Art 5(3) – Tort alternative
Can issue proceeding in MS where tort committed or where harm occurred or may occur A court can hear a case under this rule even though only part of the harm was caused within its jurisdiction (Shevill v Presse Alliance SA) the court for the State where the harm occurred can only award remedies for the harm which occurred in that State.
d. check are there any co-D’s / 3rd parties (Art 6) Only applies if C suing D in place D domiciled Must be a real defendant C suing D in MS where D domiciled can join other D’s domiciled in EU that are party to those proceedings provided: o Claims are so closely connected that its expedient (convenient) to determine them together (to avoid risk or irreconcilable judgements resulting from separate proceedings)
9. What if the other side win the race – has it been first seized? Where proceedings have been started first – that will mean case is seized. (Art.30) If claim form is issued in elsewhere before issued in England, then consider: Same parties AND same cause of action = English court cannot hear if proceedings started elsewhere (Art.27) Related cause of action = English court have a discretion to accept juris (Art.28)
IF ONE OF THE PARTIES IS DOMICILED IN THE REST OF THE WORLD
PART 6.20 AND 6.21 - PERMISSION TO SERVE OUT OF THE JURISDICTION SERVICE OUT CHECKLIST (REST OF THE WORLD)
1. Is D of EU domicile / seat? NO….
2. Can D be served within England and Wales? Either while they are in E&W or at
place of business in E&W?
If NO to 1 & 2 – permission to serve out is required
3. Do any of the Rule 6.20 grounds for service outside of juris apply? General grounds - Application by C: Claim made for remedy against someone domiciled in Juris (r.6.20(1)) Claim made for injunction against D to do, or stop doing an act within the juris (r.6.20(2)) When C wants 3rd party to join in action and 3rd party outside of juris: (r.6.20(3) Can serve outside juris if: o already, or about to, serve claim form on D (who’s in EU or UK), AND o C and D have real issue between them that’s reasonable for court to try, AND o 3rd party is necessary or proper party to that claim
Claims relating to contracts: Permission granted if the contract the claim relates to was: 23
o o o o o
Made within Juris (r.6.20(5)(a)), or Made by / through agent trading or residing in Juris (r.6.20(5)(b)), or Governed by English Law (r.6.20(5)(c)), or Has a term stating English court has Juris (r.6.20(5)(d)), or Breach committed within Juris (r.6.20(6)) – place of performance
Claims relating to tort: Permission granted where: o Damage sustained in Juris (r.6.20(8)(a)), or o Damage sustained resulted from act committed within Juris (r.6.20(8)(b)
General grounds – Application by D: Claim is Part 20 claim AND person to be served is necessary or proper party to claim (r.6.20(3A)
4. Does claim have a reasonable prospect of success? Rule 6.21(1)(b) – JUST
MENTION – low threshold
Question of fact – probably yes on most occasions
5. Is England and Wales the proper place to bring the claim? Rule 6.21(2A) NB – show connection with England – as many as possible reasons / rules For example:
Where is most convenient place? Where are the witnesses based? Where is the majority of the evidence located? Where was the contract negotiated / concluded? Where do each party have their offices? Where was place of performance?
If yes to 3 – 5 – permission may be granted – judge still has discretion
CHALLENGING JURISDICTION (EU AND RoW) DOCUMENTS REQUIRED TO CHALLENGE JURIS Acknowledgement of service Application notice Witness statement in support of application
BOTH PARTIES BASED IN EU (BRUSSELS REG’S)
USED WHEN ANOTHER MS COURT IS ALREADY SEIZED OF THE MATTER (ART 27) Which one of following circumstances apply on the facts: 1. Proceedings involving SAME parties and SAME cause of action Commenced already in another MS so English courts cannot hear case ART 30 = court deemed to be seized: o At time document instituting proceeding is lodged, provided its then served o UNLESS document has to be served before lodged with court then court seized when document is received by authority responsible for service.
2. Proceedings begun in another MS that involves RELATED cause of action (Art.28) 24
English court has the discretion to decide whether or not to decline jurisdiction Consider whether risk that its judgement will conflict with judgement of other EU court.
PROCEDURE: (WHEN WANT TO CHALLENGE THAT ENGLISH COURT ISNT JURIS) 1. Acknowledge service of Particular of Claim (or claim form if its in commercial (r58.6(3)) or mercantile court (r.59.5(3)) within 21 days (PD 6B, para 7.3) and state intention to challenge jurisdiction. 2. Apply to court to challenge juris. on grounds that English court doesn’t have calid juris (FORM N244). - Within 14 days of filing acknowledgement of service (28 days if commercial (r.58.7(2) or mercantile (r.59.6(2)) - Along with evidence (r11(4)) 3. If don’t apply within time limit then deemed as having submitted to English courts juris. (r11(5)) 4. DON’T file a defence as doing so will be deemed to have submitted to English Juris. 5. GROUNDS FOR CHALLENGING JURISDICTION: GO through Brussels reg’s checklist (above) and claim the court doesn’t have valid juris under the regs. o If D sued in English courts because C claims D domiciled there? Can D challenge this? Is D’s statutory seat outside the UK? Try to show that D has no real connection with UK. o Any exclusive juris apply under Art.22? o Anything in their contract that equates to a exclusive jurisdiction clause? o Any of the alternatives apply?
GENERAL TACTICS FOR THE DEFENDANT IN JURISDICTION MATTERS Aim to seize court of their choice in EU before C issues claim form D has counter claim: o Then should issue their claim form before C, in EU court they choose o And that their allowed to choose under Brussels Reg’s o Can choose court better suited to them D can apply for Declaration of non liability in court they want case to be heard – if allowed under the Brussel Regs
ONE OF THE PARTIES IS BASED OUTSIDE THE EU
PROCEDURE: (WHEN WANT TO CHALLENGE THAT ENGLISH COURT ISNT JURIS) 1. Acknowledge service of Particular of Claim and state intention to challenge jurisdiction. The time for doing so is set out in the PD 6B to Part 6 para 7.2 and 7.3. FIND the relevant amount of days in table below. NB – REMEMBER IN THE COMMERCIAL AND MERCANTILE COURTS TIME RUNS FROM SERVICE OF THE CLAIM FORM NOT THE PoC (where tey are not served together)
Place or country Abu Dhabi Afghanistan Albania Algeria Angola Anguilla Antigua Antilles (Netherlands) Argentina Armenia Ascension Australia Austria Azores Bahamas Bahrain Balearic Islands Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia-Hercegovina Botswana Brazil Brunei Bulgaria Burkina Faso Burma Burundi Cameroon Canada Canary Islands Cape Verde Islands Caroline Islands Cayman Islands Central African Chad Chile China Christmas Island
Days 22 23 25 22 22 31 23 31 22 21 31 25 21 23 22 22 21 23 23 21 21 23 25 31 28 23 21 23 22 25 23 23 23 22 22 22 22 25 31 31 25 25 22 24 27
Place or country Holland (Netherlands) Honduras Hong Kong Hungary Iceland India Indonesia Iran Iraq Ireland (Republic) Ireland (Northern) Isle of Man Israel Italy Ivory Coast Jamaica Japan Jersey Jordan Kampuchea Kazakhstan Kenya Kirgizstan Korea (North) Korea (South) Kuwait Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau Macedonia Madagascar Madeira Malawi Malaya Maldive Islands Mali Malta Mariana Islands
Days 21 24 31 22 22 23 22 22 22 21 21 18 22 21 22 22 23 18 23 38 21 22 21 28 24 22 30 21 22 23 22 21 21 21 21 31 21 23 31 23 24 26 25 21 26
Place or country Puerto Rico Qatar Reunion Romania Russia Rwanda Sabah St. Helena St. Kitts--Nevis St. Lucia St. Pierre St. Vincent Samoa Sarawak Saudi Arabia Scotland Senegal Seychelles Sharjah Sierra Leone Singapore Slovakia Slovenia Society Islands Solomon Islands Somali South Africa South Georgia South Orkneys South Shetlands Spain North Africa Sri Lanka Sudan Suriname Swaziland Sweden Switzerland Syria Taiwan Tajikistan Tanzania Thailand Tibet Tobago
Days 23 23 31 22 21 23 23 31 24 24 31 24 30 28 24 21 22 22 24 22 22 21 21 31 29 22 22 31 21 21 21 31 23 22 22 22 21 21 23 23 21 22 23 34 23
ARBITRATION – ITUT AND WS 8 Checklist: • Valid arbitration clause / agreement? (if no would they agree anyway?) o If binding then cant commence proceedings • Does it cover this dispute? • Has time limit for commencing Arbitration expired? o Ask Arbitrator thenb S.12 apply to court
Fair resolution of disputes Impartial tribunal Without unnecessary expense/delay Should have a phrase that covers disputes “with reference to the contract” Disputes “arising out of or under the contract” includes rectification of the contract but not where parties have actually formed a contract Doctrine of precedent should not be rigidly applied- see circumstances as a whole “in connection with the contract” includes disputes about pre-contract mistake and misrepresentation best clause to include for arbitration: “any dispute arising out of or in connection with this contract shall be referred to and finally resolved by arbitration under the Rules of the Chartered Institute of Arbitrators, which rules are deemed to be incorporated by reference to this clause”. Agreement in writing: wide meaning o Exchange of letters/other communications o Agreements evidenced in writing (by parties/3rd party) o Oral agreements to written terms If written submissions by a part during arbitration or proceedings + one party alleges that there is an arbitration agreement + other party does not deny = arbitration agreement will apply Mandatory provisions of the Act By referring to arbitration clause in another agreement in another agreement Even if main contract is invalid: arbitration clause still effective Parties free to decide number of arbitrators If no agreement, 1 arbitrator Parties can agree on procedure for choosing 1 arb If no procedure agreed either party can make written request to make joint appointment within 28 days Otherwise apply to the court If decide 3 arbitrators: each party appoints 1 within 14 days of request and 2 arb choose 3rd If 1 party doesn’t make appointment: A gives notice to B that he proposed X as sole arbitrator- B has 7 days to appoint other arb- otherwise A’s arb appointed Only remedy: application to court If can’t agree on chairman: apply to court If only 2 arbs: implied that there should be a 3rd one If no chairman: can choose an umpire (only comes if they get stuck) If parties haven’t chosen an umpire: 2 arbs will choose umpire as soon as unable to agree (b4 final hearing) Parties can agree on functions of umpire Parties can decide on rule on how tribunal should exercise powers- otherwise majority vote All decisions taken by majority unless agreed General definition Decide if he is competent + time + validly appointed Decide whether there is a valid arbitration agreement + whether tribunal validly constituted + what matters were submitted to arbitration Disclose circumstances which may affect impartiality o Business relationships with parties o Social relationships with parties o Prior knowledge of dispute o Commitment which may affect availability Dispute arb’s jurisdiction: party’s first step in dealing with merits of the application after the arbitrator’s appointment Challenge arb’s jurisdiction in court. Will be considered if o Decision will have substantial cost o No delay in making application o Good reasons for matter to be considered Party who continues in arbitration: cannot subsequently apply to the court make different awards on different issues at different times award security for costs decide on procedural/evidential matters o e.g. apply for permission to include expert’s report as evidence
Terms of arbitration agreement
Incorporating the arbitration clause
S. 5 AA
Incorporation of arbitration clause Appointing arbitrator -
S. 5(5) Sch 1 AA 1996
S. 6(2) S. 7 S. 15(1) S. 15(3) S. 16(1) S. 16(3) S. 18 S. 16(5) S. 17 S. 18 S. 18 S. 15(2) s. 15(1) s. 16(6) s.21 S. 22 S. 20 S. 33 s. 30
Arbitrator’s duties -
s. 31 s. 32
Arbitrator’s powers -
s. 47 s. 38(3) s. 34
LITIGATION – ITUT AND WS 1 WHICH COURT REMEMBER FINACIAL LIMITS FOR THE DIFFERENT COURTS AND THE TYPE OF CLAIM THEY DEAL WITH
COURT Small track (Part 27)
INFORMATION Up to £5K Small claims stuff, intended to provide a proportionate procedure for straightforward claims (PD 26, para 8.1()). Limited costs (generally) r27.14 Allocation to track will depend on a number of things (see p97) including value of claim, complexity of case, importance to the public etc (see rule 26.8(1))
Fast track (Part 28)
£5001 to £15000 Timetable Structure (Para 3.12 of PD28 – sets out typical timetable from date of allocation) STAGE Preliminary Directions (ADR – stay in proceedings) Disclosure o o o Scope? How long? Where? 1 week 6 weeks 8 weeks (if out of Juris) Usually 4 weeks (depending on complexity) DURATION (6 weeks) 6 - 10 weeks after ADR
Inspection Exchange of W/S
Exchange of experts’ reports o o o o Very expensive and time-consuming- usually restricted number (2 per party) 8 weeks because complicated issue experts should meet at least 2 weeks after. In this case 4 weeks because complicated area (consider single joint expert)
Court sends pre-trial checklist, listing questionnaires Parties file listing questionnaires Case Management Trial Costs
6 weeks 2 weeks 7 Days before trial 8 weeks Costs in the case 30
DIRECT IONS CMC’s
CASE MANAGEMENT CONFERENCE – Para 5.1 PD29 – the court will: (1) review the steps which the parties have taken in preparation of the case (2) decide and give directions about the steps which are to be taken to secure progress of the claim in accordance with the overriding objective (3) ensure (as far as possible) that all agreements that can be reached are reached and recorded
all cases have CMCs para D3.1 CCG date can’t be changed except for court order incl. progress monitoring info sheet pre-trial checklist PF 58 para 10.2: C’s responsibility within 14 days of date when all respondents filed defence o Otherwise any other party or court Witnesses of facts (how many) Experts Possible directions to be made Progress Monitoring date- para D12 CCG Progress monitoring information sheet D12.2 CCG (3 days before Progress monitoring date) Re-convene CMC Pre-trial checklist within 7 days of progress monitoring date- para D14 CCG Pre-trial review- para D18 CCG Case memorandum: short and uncontroversial description of case PD 58 para 10.8(1) and D5 CCG List of issues- what is agreed and what is in dispute- PD 58 para 18(2) and D6 CCG Case management information sheet- file and serve 7 days before CMC- PD 58 para 10.7 and D8.5 CCG Case management bunde- PD 58 para 10.8(3) and D7 CCG- in court at least 7 days before CMC C’s Solicitor obliged to update bundle and revise it. D7.5 when it needs revising Claim form All statements of case Case memorandum List of issues Case management information sheets Pre-trial timetable (if agreed) Principal orders of the court Any agreement in writing as to disclosure
Issues in CMC
Documents required for case management
Contents of Case Management Bundle
the Hearing of the Case Management Conference o CPR 29.5 - Date for CMC can only be altered by order of the court o CPR 29.3(2) and Commercial Court Guide para D8.2 - Must be attended by legal representative with knowledge of the issues and at least one of the advocates o CPR 58.13(4) - Court will give directions for trial Case Management Directions and Final Preparation for Trial • • • • • • Fix trial date Set Progress Monitoring Date Set date for filing Progress Monitoring Information Sheet Pre–trial Checklists – to be filed at least 3 weeks before trial Possible pre-trial review Lodge trial bundles – at least 7 days before trial 32
TACTICS – PRE COMMENCEMENT I TUT AND WS 5 STATUTORY DEMAND IS THERE ANY DISPUTE ON THE FACTS Issue statutory demand against the company (insolvency proceedings) Procedure s. 123(1)f IA 1986: unable to pay its debts s. 123 IA 1986 >750 undisputed debt/judgement order/unable to pay its debts as they fall due warn debtor that the company may be wound up if no payment within 3 weeks service at registered office or recorded delivery Advantages effective threat cheap and easy if not paid: public knowledge (petition to wind up is advertised) Disadvantages less scope for negotiations other people can come forward and rank higher as creditors if company does not have money- waste of time
Issue statutory demand against the individuals (bankruptcy proceedings) Procedure s. 268 IA 1986: unable to pay its debts if: undisputed debt >750/judgement debt 18 days to apply to set it aside because the debts is disputed/demand improperly served or errors prescribed form for immediate debt IR6 service IR6.3- personal service (“all that is reasonable” will sufficeincl. post) IR6.11 creditor can rely on any acknowledgement of receipts 3 weeks (not including date of service) to pay up (s. 270 exception if serious risk of depletion of assets) must show that it is unfair to rely on stat. demand to prove that unable to pay its debts (counterclaim/security for cots/demand ought to be set aside on other grounds) Advantages will serve solvent debtor into action (solvent debtor gets more time to pay) cheap to make demand if payment received individuals have more assets (on the facts) more public stigma attached other creditors may not have personal guarantees can stay proceedings by other creditors Disadvantages puts other creditors on notice (i.e. mortgage ranks higher) expensive if bankruptcy initiated only available for undisputed debt (here debtor’s position unknown) useless if insolvent
SUMMARY JUDGEMENT BY C OR D?
o Summary Judgment – CPR 24.2 The court may give summary judgment against a claimant or defendant on the whole of a claim…if (a) it considers thatI. the claimant has no real prospect of succeeding on the claim or issue; or II. that the defendant has no real prospect of successfully defending the claim or issue; and (b) there is no other compelling reason why the case… should be disposed of at trial” o Summary Judgment – procedure CPR 24.4(3) - Applicant must give at least 14 days notice of the hearing and file evidence in support CPR 24.5(1) – respondent may file evidence in reply at least 7 days before the hearing CPR 24.5(2) – the applicant may respond by filing evidence at least 3 days before the hearing
o Tactical use of summary judgment Debtor can only afford to pay some but not all debts Debtor cannot afford to pay any debts Debtor can afford to pay but is delaying to put off the date of payment Debtor has a genuine dispute about whether the debt is due
o Summary judgment – risks Another creditor starts insolvency proceedings before enforcement complete o o Proceedings stayed Execution void
Waste of costs Must have good information about likely solvency of debtor
Issue proceedings against the company Procedure - serve claim form + particulars of claim - wait for defence (28 days if acknowledgement of service) - apply for summary judgement (part 24.2) once defence filed/ if not default judgement Advantages - litigation is less public- so other creditors will be less likely to know of D’s difficulties - likely to win: quicker + cheaper - if successful, can then ask for charging order- becomes secured creditor Disadvantages - risk that other creditor gets ahead of them to wind up the company and therefore their proceedings will be stayed - even if they win: if the company does not have money: waste of money
Issue proceedings against the individual Procedure - letter of claim - claim for within 28 days + particulars of claim - defence (14 days after acknowledgement of service) - apply for summary judgement/default judgement Advantages - may persuade them to settle (likely to succeed) - may recover costs - if debtor can pay some of their debt but not all- ahead of other creditors - not public- other creditors not aware - can get charging order and become secured creditor Disadvantages - costly - time consuming - proceedings may be stayed if someone else starts bankruptcy proceedings - difficult to enforce - depends on personal interests
Applying for default judgment: If D takes no action (i.e. doesn’t file an acknowledgment of service or a defence) The form C uses depends on whether the claim is for a specified / unspecified amount (see FORMS N205A, N205B, N225, N227) Conditions of default judgment: (a) PoC have been served on D; (b) D has not acknowledged service / filed a defence and the relevant time period (14 / 28 / longer by agreement) has expired; (c) D has not satisfied the claim; 35
(d) D has not admitted liability for the full amount of the claim Interest – default judgment may include interest, in the claim for a specified amount, if: (a) the particulars of claim include the necessary details (b) any claim for statutory interest does not exceed 8% per annum (c) the request for judgment includes a calculation of the amount of interest from the date from which it was calculated in the claim form to the date of the request SETTING ASIDE A DEFAULT JUDGMENT (PART 13) TWO ways of setting aside: MANDATORY (r13.2) Court is obliged to set aside a default judgment that was wrongly entered before the defendant’s deadline for acknowledgment / defence expired. Court is also obliged to set aside a default judgment entered after the claim was paid in full. DISCRETIONARY r13.3(1) Court has power to set aside / vary default judgment where: (a) D has a real prospect of successfully defending the claim or; (b) It appears to the court that there is some other good reason whyi. the judgment should be set aside or varied; or ii. the defendant should be allowed to defend the claim ANALYSE FACTUAL ISSUES THAT MAY ARISE WHEN APPLYING TO SET ASIDE A DEFAULT JUDGMENT (see p113) C has a duty (if he knows D didn’t get the PoC) to set asise the default judgment himself or apply to the court for directions (rule13.5) INTERIM PAYMENT APPLICATION MADE BY THE CLAIMANT An advance payment on account of damages or a debt paid directly to applicant CPR 25.7 - The court may order an interim payment only if(a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant; (b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed; (c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment o Interim payments – procedure Make a written request for payment first in accordance with the overriding objective CPR 25.6(1) - Apply after the time for acknowledging service has expired CPR 25.6(3) – the application notice and evidence must be served at least 14 days before the hearing CPR 25.6(4) – the respondent may serve written evidence in response at least 7 days before the hearing CPR 25.6(5) – the applicant may respond by serving written evidence at least 3 days before the hearing
o How much can the court order?
CPR 25.7(4) A reasonable proportion – o Rule of thumb – 60% of lowest estimate of damages Obtain good evidence on quantum
o Interim payment – tactics Claimant will receive % of damages before trial It can be an alternative if the case not quite good enough for summary judgment Interest will stop running on the amount paid Claimant may have to repay money if they recover less BUT the defendant may have difficulties in recovering the money if they are successful Paid directly to applicant If case not good enough for summary judgement Can stop interest running for the respondent May already have been spent
SECURITY FOR COSTS – APPLICATION MADE BY THE D
Security for costs CPR 25.12 – 13 Grounds: (in witness statement) Part 25.13(1) remedy is discretionary - court must have regard to whether it is just and must look at all the circumstances as well as the conditions o o o o Strength of claim and defence Claimant's ability to provide security Cause of claimant’s impecuniosity Property within the jurisdiction
AND (another ground has to be satisfied):
Part 25.13(2)(a) the claimant is resident outside the jurisdiction + not in a Brussels convention state Part 25.13(2)(c) claimant is a company or other body and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so Part 25.13(2)(d) the claimant has changed address since the claim was commenced with a view to evading the consequences of the litigation Part 25.13(2)(e) the claimant failed to give his address in the claim form or gave an incorrect address in that form Part 25.13(2)(f) the claimant is acting as nominal claimant and there is reason to believe that he will be unable to pay the defendant’s costs if ordered to do so Part 25.13(2)(g) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him
o Security for costs – form of security Money to be paid into court BUT May be more commercial ways of providing security eg bank guarantee or bond Claim might be struck out if security not provided 37
Only if defendant us concerned about recovering his costs always ask the opponent first before making a formal application o Ask if assets in the jurisdiction o Enclose disclosure of costs Use appendix 16: does not have to take into account merits of the case R 3.1(5) court can order security for costs when fails to comply with CMC Joint bank a/c Pay into court Bank guarantee Solicitor holds money on stakeholder a/c Undertaking to the court Must write to claimant Set out reasons Detailed estimate of costs for which you want security If no satisfactory response: application notice (Part 23) + witness statement (Part 25.12.22) Witness statement: o Conditions o Heading of action o Set out application o Set out grounds for application o Relevant info about C o Details of costs incurred to date and future costs (exhibit) no automatic stay in the commercial court Give them more time o Unless order (+ after that strike out) o Problem: costs may not be recovered Ask for summary judgement- part 24 Ask for interim payment- part 25
What if claimant didn’t provide security?
SETTLEMENT /ENFORCEM ENT
Assets House jointly owned -
Enforcement charging order -
Further info required value kids Hire purchase? Value? Up to date valuation
Execution order + writ of fifa Charging order N/A execution
Shares Time share Furniture (antiques)
value identify which are the furniture in question
Rented apartment Joint a/c Savings
N/A N/A 3rd party debt order valuation
ADR Strategy and Tactics In view of this, the solicitor needs to keep numerous points in mind at the start of a case, including the following: • • • • • • • What is the appropriate method of dispute resolution to best achieve the client’s aims? Is the client’s priority a quick settlement – possibly to avoid incurring legal costs ‘unnecessarily’? Does the client want to preserve the business relationship with the other party? How will the dispute, and possibly the chosen method of resolution affect relationships with other customers or suppliers? Clients will not generally want to be seen as a ‘soft touch’. Will the knowledge that your client is willing to resort to litigation in order to enforce or preserve his rights deter others from attempting to infringe those rights? Is the other party involved in the dispute solvent? Does the client want the legally correct solution to the dispute, the cheapest solution or the quickest solution? The court has power to make an order for the parties to attempt ADR even if neither party wants to do so CCG 1.8 The court will stay proceedings to enable ADR to be attempted CCG1.7 A party who unreasonably refuses to attempt ADR may be penalised in costs. CCG1.10 Disadvantages it does not bind the parties to the procedure the awards are not so easily enforceable the facts may not be fully disclosed no appropriate for cases such as: client needs an injunction, there is no dispute, the client needs a ruling on a point of law
Advantages cheapness and speed (APPLY TO FACTS) flexibility preserving a business relationship commercial reality
INVOLVES: third party reaches a decision which is binding on the parties. Many business contracts contain an arbitration clause In the absence of such a clause, the parties in dispute may agree to arbitration once the dispute has arisen and may choose their own arbitrator with the relevant expertise. governed by statute, namely the Arbitration Act 1996
ADVANTAGES arbitration may be quicker than litigation; the procedures are less formal and occur in private; the solutions reached are often more practical than those a court has power to order; and at the same time those decisions are binding on the parties. Arbitration Act 1996, s.66: enforcement of judgments by the High Court quick because, if necessary, the parties can meet face to face to iron out their differences. A mediator may only disclose to the other party information provided by one party with that party's permission
DISADVANTAGES Certain remedies, such as injunctions, are not available depending on the procedures adopted, the dispute may not receive the depth of investigation it would have done in the courts. not always necessarily cheaper than litigation.
MEDIATION AND CONCILIATION
third party who has been selected as mediator will have written statements from both parties. mediator will discuss the case with them. They will tell him what they think about each party’s case on a without prejudice basis. mediator will not pass on to the other party information which is confidential, unless given permission parties agree to submit their dispute to mediation if this does not work, they will refer the matter to arbitration. Can use the person who has been acting as their mediator as their arbitrator
if party refuses mediation: The Court may order a stay of the litigation to enable mediation to take place. The Court may penalise that party in costs The Court may suggest that that party reconsider
mediator will have become privy to confidential information belonging to one of the parties.
The Overriding Objective
CPR 1998. Rule 1.1(1) states that: These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and r 1.1(2) states that: Dealing with a case justly includes, so far as is practicable— (a) ensuring that the parties are on an equal footing; (b) saving expense; (c) dealing with the case in ways which are proportionate— I. to the amount of money involved; II. to the importance of the case; III. to the complexity of the issues; and IV. to the financial position of each party; (d) ensuring that it is dealt with expeditiously and fairly; and (e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases. Rule 1.2 requires the court to give effect to the overriding objective and r 1.4(1) states that: The court must further the overriding objective by actively managing cases. Rule 1.4(2) indicates that this may involve: (a) encouraging the parties to co-operate with each other in the conduct of the proceedings;… (f) helping the parties to settle the whole or part of the case; 41
(g) fixing timetables or otherwise controlling the progress of the case; (h) considering whether the likely benefits of taking a particular step justify the cost of taking it. In addition, r 1.3 states that: The parties are expected to help the court to further the overriding objective. Solicitors are under a duty to ensure that clients are both aware of and comply with r 1.3 in the conduct of litigation. One important purpose of r 1.3 and CPR 1998 generally is to dissuade parties from deliberate delaying tactics in litigation in an attempt to force their opponent to settle the case on unfavourable terms due to concerns over escalating costs.