03 November 2005

Jeremy Sharman

1. Overview

The court procedure in the UK is designed to encourage parties to settle their disputes at an early stage rather than to have the matter determined at trial. This is achieved through a variety of means including active case management by judges, tight procedural timetables, the use of costs orders and judicial support for alternative dispute resolution ("ADR") such as mediation. The ability of parties to use litigation as a tactical device to achieve commercial ends is more limited than it used to be.

2. Emergency Relief

Orders (called "injunctions") can be obtained at short notice requiring a party to do, or refrain from doing, some act either before proceedings are commenced or during the litigation. The most important types of injunction concern the freezing of assets and orders relating to the seizure and preservation of evidence. In appropriate cases, for example where fraud is suspected, the application can be made without notice to the defendant.

As a general rule, an injunction will not be granted if a suitable alternative remedy will suffice e.g. damages. Further, the party applying for the injunction will be required to undertake to compensate the other party for the losses it may suffer should it transpire that the injunction should not have been granted. The court may also require the applicant to put up security as a condition of making the order.

Emergency relief is understandably expensive both in terms of management time and legal costs. However, the ability to preserve evidence or assets pre-trial is an essential and invaluable tool for any claimant.

3. Process

  • Timing

Typically a case can take approximately 18 to 24 months before reaching trial, although procedures are available to bring the case to a much earlier conclusion, depending on the circumstances (see interim measures below). The court rules encourage the parties to disclose full details of their respective positions before commencing proceedings and once proceedings are started the court timetable is fairly tight.

  • Courts

A claimant commences an action in either the County Court or the High Court depending on the value and the complexity of the claim and there are specialist courts (for example, the Technology and Construction Court and the Commercial Court) with their own procedures for certain types of cases.

  • Interim measures

Parties can seek the assistance of the court on a whole variety of issues before any trial. The most important applications in practice include emergency relief (injunctions), disputing jurisdiction, obtaining security in respect of legal costs and obtaining early judgment.

  • Case Management

The courts in England and Wales have extensive case management powers which are designed to progress cases quickly and efficiently. The opportunities for a party to delay a case by ignoring the rules or making tactical applications are relatively limited.

  • Appeals

The scope for appealing a decision of the court is limited. As a general rule appeals require leave and are generally limited to issues of law rather than fact.

4. Disclosure

In English proceedings, subject to any arguments as to the proportionality of the search process, parties must disclose all relevant documents which are or have been in their possession or control. This obligation includes documents which could adversely affect their own cases. Failure to disclose or, worse still, destruction of relevant documents is dangerous and can lead to serious penalties. With the exception of privileged documents (see below) each party is entitled to inspect and take copies of the other party’s documents. Advice early on can ensure that relevant documents are retained and disclosed in the best way to protect a party’s position.

5. Privilege

In general, English public policy favours the open and frank conduct of legal proceedings. However, legal professional privilege is an important exception to this general rule.

There are two types of legal professional privilege. One relates to lawyer/client communications (whether litigation is contemplated or not) and the other to documents prepared with a view to litigation generally. A party cannot be required by his opponent to disclose privileged documents, even if they are relevant to the case. Documents not covered by such protection include internal communications prepared either before or in contemplation of legal proceedings. Again advice early on can help and can manage risks in this area.

In addition, parties are encouraged to try to settle their disputes. Accordingly, communications between parties which are "without prejudice" and which come into existence in the course of trying to settle a dispute are privileged and as such may not be put in evidence without both parties’ consent. As a result, offers made or compromises suggested by a party in a genuine but failed settlement attempt will not later be shown to the court to the possible detriment of its legal arguments.

6. Enforcement of Judgments

An English court judgment can be registered and enforced within EC and EEA countries as if it were a judgment of the courts of those countries. Equally, judgments from those countries can be registered and enforced with relative ease in the UK.

In addition, there are reciprocal arrangements between the UK and many Commonwealth and other jurisdictions which allow for the mutual recognition and enforcement of judgments.

7. Costs

Pursuing a claim through the High Court can be expensive, particularly if it goes to trial. Costs tend to be "front loaded" in the sense that the parties are required to gather evidence and undertake an evaluation of the merits at an early stage. An early evaluation does, however, have the advantage in that it puts pressure on the parties to focus on the merits at the outset and to consider alternative methods for resolving the dispute. As a result cases tend to settle earlier with an overall saving in management time and costs.

The courts have a wide discretion on the question of costs and will take into account such matters as the parties’ conduct before, as well as during the proceedings. The general rule is that a successful party will be able to recover its reasonable costs from the unsuccessful party although, in practice, such costs are often limited to approximately 60% - 70% of the actual costs incurred because of the way costs are assessed by the court.

The courts can impose costs penalties if a party has raised an issue or exaggerated a claim unreasonably, and most recently the courts have penalised in costs those parties who unreasonably refuse to consider ADR as a potential method of resolving disputes, notwithstanding the merits of their claim.

Finally, in certain circumstances, the courts can order that a party bringing a claim (or a defendant bringing a counter claim) gives "security for costs", to guarantee that the claimant will be able to meet any costs order which may eventually be made against it if the claim is unsuccessful. This is a very useful tool for defendants facing a protracted battle with an impecunious claimant.

8. Arbitration and ADR

The UK legal system encourages parties to resolve their disputes other than through the courts. Exceptions are where emergency relief is needed, a precedent is required, or publicity an advantage.


London is recognised internationally as a neutral venue for arbitrations and is home to the London Court of International Arbitration, one of the key Arbitration Institutions globally. The Arbitration Act 1996 provides a detailed framework governing the procedural aspects of domestic and international arbitrations seated in England and Wales. In particular, the English courts are given powers to support an arbitral tribunal including providing interim relief enforcing orders of the tribunal and requiring the attendance of witnesses.

Arbitration as a means of dispute resolution has advantages and disadvantages over litigation. However, for certain industry sectors such as construction, IT, shipping and insurance, arbitration remains a popular private form of dispute resolution.

ADR (Alternative Dispute Resolution)

ADR is generally a non-adjudicatory process by which the parties engage the help of a neutral third party to facilitate the resolution of their dispute by negotiated agreement. ADR, and its most popular form, mediation, is actively encouraged by the courts in England and Wales. Consequently, it is increasing in its usage and popularity.

The advantage of successful ADR is that it could often be more cost-effective than litigation or arbitration and the process has complete flexibility when it comes to trying to find a solution to the dispute. Its success depends, however, upon a mutual willingness to take part in the process and the quality and training of the third party neutral.

It is quite common for parties to agree in contracts to put their dispute to ADR first and, should it fail, to refer the dispute to arbitration or litigation. Proper advice at the contractual stage can ensure that such dispute resolution clauses are effective.

Apart from mediation, there are other forms of ADR such as expert determination and early neutral evaluation which include a degree of adjudication at some stage in the process.