What is meant by a commercial dispute?

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
• And more-

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.

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 your case has good standing and you have contacted the relevant professionals, you can complete a claim form and send it to a relevant court for your jurisdiction. If this is a simple claim, you can use systems such as <a href=”https://www.moneyclaim.gov.uk/web/mcol/welcome”>Money Claim Online</a> without the need for a solicitor or significant resource expenditure.

Once a claim has been correctly tendered, the defendant has a maximum of 14 days to respond and deliver a response.

If your claim is weightier, the UK deploys a three-track system to resolve the issue. On meeting with your solicitor, they will work with you 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?

While the process may seem daunting to a layman, 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, you contact a solicitor to learn more about making a claim. If your 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 will be advised to pursue 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, your solicitor 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 your 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 to you.

Case Preparation

Once your claim is ready to start, your solicitor will work with you to assemble your form. This will capture the specifics of your case and – if required – address your defence or the potential position that the opposition could take. Once the response to your initial letter is provided, your solicitor will help with the drafting of a response and help carry out the vital task of correctly costing for your 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, your case will move to trial and a final ruling.

Enforcement

When your trial date is set, your solicitor will work with you to prepare you for the trial if your testimony is required and ensure that your 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, your 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 your case, the judgement can be enforced in a number of ways, including-

• Insolvency actions
• Placing charge orders
• Property seizure
• Redirection of debt orders

What should I be wary of?

Throughout this process, your solicitor will work with you to ensure that you do not run afoul of any common issues that can affect claims. These include:

Your Budget: Any litigation can be expensive and carry a number of hidden costs if additional complexities spin out of the case. If you are unsure about whether you are able to financially support a claim, it is worth thinking over whether it would be worth opening one. Thankfully, any solicitor will work with you to put in place a budget and ensure that it is adhered to. This Also expands to the time spent giving testimony, sourcing documents, or asking members of staff to testify.

Your Approach: Remember that litigation is intended to be a last resort and it is vital that you take every action possible to ensure that you have considered all alternatives before pursuing legal action. Doing so may not get the result you are looking for, but it can potentially avoid the expense and time expenditure that results from legal action.

Being Inflexible: While litigation is a formalised process, it is important that you and your support network remain reactive to changes in the case. New evidence may come to light that can strengthen or potentially weaken your argument – being able to accommodate this is vital to success when your case reaches trial.

What should I ask?

When it comes to carrying out a commercial dispute, it is worth remembering that your solicitor is a source of knowledge as well as practical support. Taking some time to talk through your case can help improve your understanding of the variables involved and help you make the best decision possible. Here are some key questions to ask:

What should I disclose? Document disclosure is a crucial part of the claim process and it is worth taking the time to walk through the process with your solicitor. Depending on the nature of your case you will likely be required to disclose personal information and a number of ‘relevant’ materials including personal correspondence, notes, and communications. These can often be less than flattering and it is worth discussing this with your solicitor to see how this can be kept at a minimum or how material received from the defendant can be used to your advantage.

Do I need interim measures? In many cases, special assistance may be required from the relevant court authorities to prevent defendants taking action that may affect the outcome of the trial. A common precaution is to deliver a freezing order to prevent a defendant moving their assets beyond the reach of the court and limit their capacity to pay out upon reaching a decision against them. This should also account for an entity’s capacity to pay and any limitation periods that are enforced by the case. Taking the time to review this correctly may not affect the ruling of the case but will ensure that an outcome in your favour will result in you getting what you deserve.

Is my case properly prepared? No matter your level of competency and confidence, finding the right legal professional will allow you to quickly resolve your case and ensure that all elements are fully accounted for. This can involve facilitating document discovery, investigations, and more – allowing your argument to go to trial in the best shape possible. Once the trial concludes, they can also provide follow on care and potentially help lodge and appeal or oversee the delivery of the assets.

For more details about all aspects of commercial litigation, please call 080 088 6004, or complete our online contact form, and we will be in touch as soon as possible.